A) when any business relationship exists underwriter, Life Insurance Policies - Provisions, Options, Fundamentals of Financial Management, Concise Edition, Micro Oneliners: Urinary Tract Infections (UT. Implied definitions Which of the following is CORRECT regarding the death benefit amount? The present cash value of the policy equals $250,000. Have a great time ahead. In a life or health insurance contract, "consideration" would be the, statements made in the application and the premium, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called. A) offer and acceptance A contract that requires certain conditions or acts by the insured individual. Pay owns a 20-pay life policy with a paid-up dividend option. A minimum of 12 months after date of purchase, Insurance premium is determined by each of the following factors EXCEPT. Only the insurer is legally bound Which scenario would most life insurance policies exclude coverage for? A) A contract that requires certain conditions or acts by the insured individual. c. income earned by Pat's spouse. a. medical expenses covered under Pat's employer-sponsored group health insurance. A life insurance contract guarantees to the beneficiary not only a death benefit, but a payment of a sum of money in perpetuity, called a death benefit for that purpose of insurance coverage. An individual who has a hobby racing cars once a month. D) Utmost good faith, What does the insurance term "indemnity" refer to? Completing all applications and collecting initial premiums. C) Consideration When the principal gives the agent authority in writing, its referred to as, The terms must be accepted or rejected in full. The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. Answer Explanation: A contract that requires certain conditions or acts by the insured individual. The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. D) Consideration, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? Declarations Entire contract Waivers Conditions, A whole life policy option where extended term insurance is selected is called a(n) dividend option settlement option nonforfeiture option interest-only option, Which of these would limit a company's liability to provide insurance coverage? Insurers must maintain files of all documents used for solicitation for ____ year(s) after the last authorizes date of use. unilateral, Ambiguities in an insurance policy are always resolved in favor of the State Insurance Departments NAIC Insurance carriers Insurance producers, Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) estoppel concealment adhesion misrepresentation, The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? A conditional contract, also called a hypothetical contract, is a contract agreement that only requires performance once the delineated conditions are met. This rider is called a(n). D) only when determined by a judge, Xcel Chapter 3 Legal Concepts of the Insuranc, Chapter 3 Exam - Legal Concepts of the Insura, Chapter 4 Exam - Life Insurance - Types of Po, 4 - (Questions) Life Insurance Policies - Pro, Chapter 5: Life Insurance Premiums, Proceeds,, Chapter 4: Type of Insurance Policies Part 1, Chapter 4: Policy Provisions, Options and Rid, Calculus for Business, Economics, Life Sciences and Social Sciences, Karl E. Byleen, Michael R. Ziegler, Michae Ziegler, Raymond A. Barnett, Fundamentals of Engineering Economic Analysis, David Besanko, Mark Shanley, Scott Schaefer, The Cultural Landscape: An Introduction to Human Geography, AP Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Unit 7 AP Env. 30 seconds. It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. Which contract element is insurable interest a component of? At what point may a producer sell insurance for an insurer? Authority given in writing to an agent in the agency agreement Policyowner has the right to select the investment which will provide the greatest return. both parties consent to the contract. What kind of policy is this? Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Barry offers Chris his mountain cabin for the weekend to secure his order for his insurance business. purpose, Insurable interest does NOT occur in which of the following relationships? Net death benefit will be reduced if the loan is not repaid No interest will be charged on loan balance Term life policies are the only type of insurance that allows policy loans A loan can be taken out for up to the face amount of the policy, Ownership of a life insurance policy may be temporarily transferred with a(n) collateral assignment absolute assignment transferable assignment beneficiary assignment, provide evidence of insurability to the insurer, In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST remit all past-due premiums within the grace period provide evidence of insurability to the insurer resubmit a new life insurance application provide a valid reason for the lapse, Which of the following is considered to be an alternative to a life settlement? Joint life policy Survivorship life policy Dual life policy Multiple life policy, A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called whole life group life credit life universal life, Can be converted to permanent coverage without evidence of insurability, Donald is the primary insured of a life insurance policy and adds a children's term rider. other insurance Law of large numbers U.S. Census Average mortality incidents Experience of morbidity, Insurance represents the process of risk selection avoidance transference assumption, Doctors pooling their money to cover malpractice exposures, An example of risk sharing would be Adding more security to a high-risk building Choosing not to invest in the stock market Doctors pooling their money to cover malpractice exposures Buying an insurance policy to cover potential liabilities, All of the following are examples of pure risk EXCEPT Losing money at a casino Injured while playing football Falling at a casino and breaking a hip Jewelry stolen during a home robbery, the terms must be accepted or rejected in full, Under a contract of adhesion, there is the potential for an unequal exchange of value the insurer's obligations are dependent upon certain acts of the insured individual the terms must be accepted or rejected in full only one party makes any kind of enforceable promise, According to life insurance contract law, insurable interest exists when any business relationship exists at the time of application at the time of death only when determined by a judge, In an insurance contract, the insurer is the only party legally obligated to perform. $1,000 $3,000 $5,000 $7,000, A nonparticipating company is sometimes called a(n) alien insurer mutual insurer reinsurer stock insurer, Because dividends are considered to be a return of premium, Why are dividends from a mutual insurer not subject to taxation? Adhesion clause What was his total bill? Because of this, an insurance contract is considered In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. implied Authority given to handle claims and process payments For a trip to the hospital, Evan Appleton paid $1,656 in hospital charges, a$750 insurance deductible, and a $457 co-payment. What is this an example of? B) Only the insured can change the provisions Connect the text to your own experiences. Dependent term Guaranteed insurability Primary term Family term, Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested? Which of the following BEST describes a conditional insurance contract? C) promises made Adjustable whole life Universal life Decreasing term life Limited whole life, Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? What is the purpose for having an accelerated death benefit on a life insurance policy? An unintentional violation of Utah insurance law could lead a producer to a fine of up to _____ per violation. Variable life insurance and Universal life insurance are very similar. The insurers obligation to pay a death benefit upon an approved death claim. C) Legal purpose Which of the following is NOT considered rebating? Which of the following statements is true? C) apparent authority term, whole, and universal life insurance increasing term insurance joint, credit, and group life insurance adjustable, permanent, and limited-pay life insurance, Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. D) Terminate the agent, Insurable interest does NOT occur in which of the following relationships? An example of an unfair claims settlement practice is, Turning down a claim without providing the basis of denial. Policyowner may increase or decrease the premium payments Policyowner may increase or decrease the face amount Policyowner can contribute large sums of money Policyowner has the right to select the investment which will provide the greatest return, All of the following riders can increase the death benefit amount EXCEPT Cost of Living Waiver of Premium Accidental Death Rider Guaranteed Insurability, Which of these is NOT considered to be a common life insurance nonforfeiture option? An insurer's claim settlement practices are regulated by the Securities and Exchange Commission (SEC) National Association of Claims Adjusters (NACA) National Association of Insurance Commissioners (NAIC) State insurance departments, A life insurance company has transferred some of its risk to another insurer. C) Materiality of concealment Which of the following is the best descriptive word? Sharon is the policyowner of a $500,000 life insurance policy. Because insurance premiums are tax-deductible Because dividends are already subject to capital gains Because dividends are payable directly to the policyholder Because dividends are considered to be a return of premium, A type of insurer that is owned by its policyowners is called domestic mutual stock in-house, What is considered to be the primary reason for buying life insurance? D) Insurance producers, If a material warranty violation on the part of the insured is found, what recourse does an insurer have? Which of the following BEST describes a conditional insurance contract. A) definitions A bilateral contract is an agreement between two parties in which each side agrees to fulfill their side of the bargain. With a life insurance contract, the insurer binds itself to pay a certain sum upon the death of the insured. D) Tom, The deeds and actions of a producer indicate what kind of authority? Premium clause B) Offer and acceptance Question. Nothing $100,000 $250,000 $500,000, Which type of life insurance is normally associated with a Payor Benefit rider? Tom's spouse Bob's estate Bob's spouse Tom, Which contract element is insurable interest a component of? _______ is the authority given to a producer to transact business on behalf of the insurer. the policy provides a straight, level $100,000 of coverage for 5 years. be filed with the state B) producer How could a company manager use a process cost summary to determine if the program to reduce water usage is successful? Accelerated death benefit An example of an unfair claims practice would be A contract that requires certain conditions or acts by the insured individual A contract that has the potential for the unequal exchange of consideration for both parties A contract where one party "adheres" to the terms of the contract A contract where only one party makes any kind of enforceable contract, statements made in the application and the premium, In a life or health insurance contract, "consideration" would be the offer and acceptance premium only statements made in the application and the premium statements made in the application only, According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's underwriting issuance of the policy promises made legal reserve, All of the following are elements of an insurance policy EXCEPT definitions other insurance claim forms conditions, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as Apparent Estoppel Aleatory Unilateral, Which of the following is an example of the insured's consideration? D) the contract must be a contract of adhesion, C) there must be legal reasons for entering into the contract, Ambiguities in an insurance policy are always resolved in favor of the
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