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The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? the policy provides a straight, level $100,000 of coverage for 5 years. Proof of insurabiilty Changes in the insuring clause Premium increase Premium decrease, What is the name of the provision which states that a copy of the application must be attached to the policy when issued? C) the authority to represent the insurer Barry offers Chris his mountain cabin for the weekend to secure his order for his insurance business. If threats or force is used to affect an insurance transaction, the unfair trade practice of __________ has been committed. In which form of corporate financing is the investor also an owner? Science Study Guide Questions. C) Competent parties Policy Application Riders Certificate of Authority, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) guaranteed term rider guaranteed insurability rider accelerated benefit rider cost of living rider, The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid minus indebtedness and with interest during the last 12 months minus indebtedness and without interest during the last 6 months, A life insurance policyowner does NOT have the right to change a beneficiary select a beneficiary take out a policy loan revoke an absolute assignment, A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT fare-paying passenger pilot of personal airplane suicide war, The insurer's obligation to pay a death benefit upon an approved death claim, Under a life insurance policy, what does the insuring clause state? Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium". C) consideration Which of the following statements about aleatory contracts is NOT true? Plot this function and determine if she is ready to attempt the Bluenose Marathon. A) Sue the insured To see this page as it is meant to appear, please enable your Javascript! collateral, What is implied authority defined as? Returning a portion of a premium as inducement to purchase insurance, An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of, Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out. C) fiduciary trust D. $2,863. All of these are typically sources of underwriting information for life or health insurance EXCEPT. Insurance interest does NOT occur in which of the following relationships? When the principal gives the agent authority in writing, its referred to as, The terms must be accepted or rejected in full. Restoring an insured to the same condition as before a loss is an example of the principle of. be in writing If she dies 15 years after the policy's inception date, how much will her beneficiary receive? The policy may be paid up early by using accumulated cash values The policy may be paid up early by using policy dividends The policy's premiums will increase after 20 years The policy's cash values steadily decrease after 20 years, the policy would be payable, minus the premium amount, If an insured dies during the grace period with no premiums paid the policy would be payable, minus the premium amount the policy would be payable only after the beneficiary makes past due premium payment all past premiums will be refunded with interest the claim would be denied, In what part of an insurance policy are policy benefits found? What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period? In exchange, the policyowner pays premiums. The type of annuity she is seeking is called. Adjustable life insurance Decreasing term insurance Increasing term insurance Modified life insurance, A spouse and child can be added to the primary insured's coverage as what kind of rider? A Modified Endowment Contract (MEC) is best described as, A life insurance contract which accumulated cash values higher than the IRS will allow, Doctors pooling their money to cover malpractice exposures, The free-look provision gives the policyowner, The right to return the policy for a full refund within a specified number of days. The Fair Credit Reporting Acts main purpose is to, Protect consumers with guidelines regarding credit reporting and distribution, A whole life insurance policy accumulated cash value that becomes, The policy loan value which the insured may borrow against. This rider is called a(n). representation Tom's spouse Bob's estate Bob's spouse Tom, Which contract element is insurable interest a component of? The policies continue in force with no change. Child term rider Payor rider Family maintenance rider Family income rider, What happens to the coverage under a children's term rider when that child reaches a certain specified age? Insurance contracts are unilateral contracts. Identify the type of financing (stock or bond) that best answers the question. A) Insurer's promise to pay benefits Law of Agency c) a contract must be in writing. What is the advantage of adding this rider? B) implied authority Competent parties Offer and acceptance Consideration Legal purpose, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? Which Of The Following Best Describes A Conditional Insurance Contract, A) A contract that requires certain conditions or acts by the insured individual, B) A contract that has the potential for the unequal exchange of consideration for both parties, C) A contract where one party adheres to the terms of the contract, D) A contract where only one party makes any kind of enforceable contract. The gap between the total death benefit and the policys cash value. 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. Who is responsible for assembling the policy forms for insureds? A contract that requires certain conditions or acts by the insured individual. What does the Group Life underwriting risk selection process help protect insurance companies from? Pay owns a 20-pay life policy with a paid-up dividend option. Which type of multiple protection policy pays on the death of the last person? A double indemnity benefit will be payable to Matts beneficiary is Matt, All of the following riders can increase the death benefit amount EXCEPT, All of these are valid policy dividend options for a life insurance policyowner EXCEPT, The premium for a Modified whole life policy is, Lower than the typical whole life policy during the first few years and then higher than typical for the remainder, A nonparticipating company is sometimes called a(n), Intentional withholding of material facts that would affect an insurance policys validity is called a(n), Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT. A) implied authority The insured does not meet established underwriting requirements, The type of multiple protection coverage that pays on the death of the last person is called a(n). a. medical expenses covered under Pat's employer-sponsored group health insurance. Q. Which of the following statements is true? When the term insurance expires. 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. Sharon is the policyowner of a $500,000 life insurance policy. A) Insurable interest Which of the following best describe the term definition. Sister and brother Parent and children Business partners Business owner and business client, The deeds and actions of a producer indicate what kind of authority? Which type of life insurance policy is this? This is called risk retention preexisting conditions law of large numbers adverse selection, What is known as the immediate specific event causing loss and giving rise to risk? D) A contract where only one party makes any kind of enforceable contract, Answer:A) A contract that requires certain conditions or acts by the insured individual. A) One party is restored to the same financial position the party was in before the loss occurred. Adhesion clause A life insurance policy that is subject to a contract interest rate is referred to as. D) Insurance producers, If a material warranty violation on the part of the insured is found, what recourse does an insurer have? B) Parent and children An individual who has a hobby racing cars once a month. $2,406 The policies continue in force with no change. The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. The death benefit paid will be what the premium would have purchased at the correct age, Converting a group plan to permanent life insurance requires, The conversion being applied for within 31 days of termination. Which of the following products would allow him to accomplish this? How does life insurance create an immediate estate? A) Tom's spouse the terms must be accepted or rejected in full D) A contract where only one party makes any kind of enforceable contract, A) A contract that requires certain conditions or acts by the insured individual, All of the following are elements of an insurance policy EXCEPT A) when any business relationship exists What kind of policy is this? B) Apparent be signed and witnessed by an attorney D) Offer and acceptance must be involved, B) Equal consideration is required between the involved parties, A contract requires A contract that requires certain conditions or acts by the insured individual. Notify me of follow-up comments by email. Which of these statements regarding the annuitant is CORRECT? B) Law of adhesion The death benefit would be $250,000 $750,000 $375,000 $500,000, What does the word "level" in Level Term describe? Only the insured pays the premium What is the meaning of par value of stock with respect to the corporate form of organization? the contract is voidable upon proof of fraud. If the annuitant dies before the annuity start date, The premiums paid plus interest earned will be given to the beneficiary, Anyone who makes a fraudulent statement on an insurance application in order to obtain benefits from an insurance company. C) Bob's spouse Which of the following statements correctly describes a contract of indemnity? Both partners are still married at the time of Bob's death. B. B) conditional (D) Only one party is legally bound to the contract. A fixed cash value A flexible premium schedule A fixed death benefit The ability to take out a policy loan, The least expensive option to pay off a 30-year mortgage balance would be convertible term life decreasing term life adjustable term life increasing term life, Pre-death distributions are typically taxable, Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test? B) Equal consideration is required between the involved parties Which of these is considered to be a Living Benefit option in a life insurance policy? Which of these statements is true? B) Indemnity Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies? Insurer's promise to pay benefits She would like to borrow $15,000 against the cash value. Which of the following best describes how you analyze a fiction text? During periods of inflation, annuitants will experience a decrease in purchasing power of their payments. A non-contributory health insurance plan helps the insurer avoid. B) A paid premium The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement? A policy containing exclusions or limits that are not clearly disclosed to the policyholder, or a premium that is significantly higher than the risk covered, could be considered unfair or one-sided. An insurance contract usually involves an exchange of consideration between both parties: the insurer agrees to provide coverage and pay claims in the event of a loss, and the policyholder agrees to pay premiums in return. B) Period to which the coverage exists Connect the text to your own experiences. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. Administrative actions taken against a producer must be reported to the Commissioner within ____ days. B) acceptance D) Consideration, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. Which scenario would most life insurance policies exclude coverage for? Active Status Results Leave, A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n) automatic premium loan nonforfeiture option collateral assignment irrevocable assignment, Period of time after the premium is due but the policy remains in force, What is an insurance policy's grace period? In this situation, who will receive Bob's policy proceeds? Bob dies 12 months later. Aleatory Contract: A contract type in which the parties involved do not have to perform a particular action until a specific event occurs. Coverage decreases automatically Coverage increases automatically Coverage remains as long as proof of insurability is provided Coverage is eliminated, Joe has a life insurance policy that has a face amount of $300,000. C) adhesion Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? D) unilateral, Who is responsible for assembling the policy forms for insureds? What would happen if a life insurance applicant is given a conditional receipt? What is a corridor in relation to a Universal Life insurance policy? A) A contract that requires certain conditions or acts by the insured individual d. a deductible stated in the policy's provision. 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. Typically, bilateral contracts involve an equal obligation or. Which of the following is true of the law of contracts? Within how many days must a licensee notify the Commissioner of a change in address? What is this called? D) Principal Capacity, A unilateral contract is one in which D) Risk insured against, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called Principal Capacity, All of the following are elements of an insurance policy EXCEPT What Benefit Does The Payor Clause On A Juvenile Life Policy Provide? 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? B) issuance of the policy B) errors and omissions How could a company manager use a process cost summary to determine if the program to reduce water usage is successful? fichoh. Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium". A life insurance policyowner does NOT have the right to, Fixed annuities provide each of the following EXCEPT. A paid premium This is an example of: An example of unfair discrimination would be, When an insurer charges a higher rate for insurance based on an insureds race, religion, or national origin, Fixed period settlement options are considered to be a form of a(n). A) Only the insured pays the premium C) Implied C) Only the insurer is legally bound What types of life insurance are normally used for key employee indemnification? Loan against the cash value Policy withdrawal Policy dividend Death benefit, A business will typically use which type of life insurance to cover their employees? A) Parties involved must be competent His insurance agent told him the policy would be paid up if he reached age 100. nonparticipating life insurance policy participating life insurance policy divisible surplus life insurance policy straight life insurance policy, Which of the following is considered to be an event or condition that increases the probability of an insured's loss? When handling premiums for an insured, an agent is acting in which capacity? In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. Insurable interest Insurance exchanges Law of large numbers and risk pooling Population table data, People with higher loss exposure have the tendency to purchase insurance more often than those at average risk. B) Only the insured can change the provisions 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? Insurable interest can be based on the love and affection of individuals related by blood or law An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? A) Authority given in writing to an agent in the agency agreement Which of the following is an annuity that is linked to a market-related index? 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. implied Have a great time ahead. Which of these statements is true? Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value, Which type of policy combines the flexibility of a universal life policy with investment choices? The face amount and policy premium are not affected by the payment Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal illness There may be a dollar limit on the maximum benefit The benefit can be offered as a rider at a specific extra cost or may be at no cost, Which of the following is NOT part of an insurance contract? D) underwriter, Reasonably necessary acts that an agent must perform for carrying out his/her expressly authorized duties are covered by an agent's Post thoughts, events, experiences, and milestones, as you travel along the path that is uniquely yours. Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. C) A contract where one party "adheres" to the terms of the contract. However, corporations also can raise money by selling bonds or issuing additional shares of stock. consideration y=f(x)=10x5x+1535if0x3if3