Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Ins > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Insurance is the transfer of

Risk
Loss
hazard
Peril

A

Risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Which is not an essential element of ins contract

Agreement
Legal purpose
Counteroffer
Consideration

A

Counteroffer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Ins contract must contain all except

Beneficiary’s consent
Offer and acceptance
Consideration
Competent parties

A

Beneficiary’s consent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What do indi9viduals use to transfer risk of loss to larger group

Exposure
Indemnity
Ins
Ins interest

A

Insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Which is not the consideration in a policy

Something of value exchanged
Premium amount paid at time of app
Promise to pay covered losses
App given to prospective insured

A

App given to prospective insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

In forming ins contract when does acceptance usually occur

When insurer recs app
When insured submits app
When insurer’s underwriter approves coverage
When an insurer delivers policy

A

When insurer’s underwriter approves coverage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Which best describes aleatory nature of insurance contract

Exchange of unequal values
Only one of the parties being legally bound by contract
Ambiguities are interpreted in favor of insured
Polices are submitted to insurer on take it or leave it basis

A

Exchange of unequal values

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Insurer neglects to pay legit claim that’s covered under terms of policy. Which insurance principle has insurer violated

Good faith
Representation
Adhesion
Consideration

A

Consideration

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Ins policies are not drawn up through negotiations and an insured has little to say about its provisions. What contract characteristic does this describe

Adhesion
Unilateral
Conditional
Personal

A

Adhesion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Pays 100 premium every month for his ins coverage, yet the insurer promises to pay 10000 for a covered loss. What characteristic of ins contract does this describe

Conditional
aleatory
Good health

A

Aleatory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Life ins policy has a legal purpose if both of which of following elements exist

Insurable interest and consent
Underwriting and reciprocity
Offer and counteroffer

A

Insurable interest and consent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Which best describes concept of paying large amount of risk on part of ins company insured pay small amount of premium

Aleatory
Adhesion
Subrogation

A

Aleatory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Which of the following would qualify as competent party in ins contract

Applicant has prior felony conviction
Applicant is intoxicated at time of app
Applicant is 12
Applicant is under influence of mind impairing meds

A

Felony conviction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Def of unilateral contract

One sided only one party makes an enforceable promise
Two or more go into contract knowing may be unequal exchange of value
One author: company wrote contract insured must accept as written
If one party makes condition other party can counteroffer

A

One sided only one party makes enforceable promise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Insured not legally bound to any particular action in ins contract but insurer is legally obligated to pay losses covered by policy

Aleatory
Conditional
Unilateral

A

Unilateral

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

If only one party to ins contract made enforceable promise

Adhesion
Conditional
Legal but unethical
Unilateral

A

Unilateral

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Ins contract requires both parties meet certain conditions in order for contract to be enforceable

Unilateral
Conditional
Contingent
Aleatory

A

Conditional

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Untrue statements on app unintentionally made by insureds that would alter decision of ins company

Warranties
Common errors
Material misrepresentations
Fraudulent statements

A

Material misrepresentations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

All info about app is identified in general info section of life ins app except

Age
Gender
Occupation
Education

A

Education

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Basic source in selection

App
Agents report
Warranty

A

Application

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Contains info regarding cause of death of applicant’s deceased relatives

A

Medical information part 2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Guaranteed to be true or breach ins contract

Warranty
Concealment
Indemnity

A

Warranty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Not included in general information section of app for ins

Medical background
Gender
Occupation

A

Medical background

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Wild underwriter not responsible for

Solicit business that will fall within insurer’s underwriting guidelines
Obtain appropriate signatures on app for ins
Issue policy that is requested
Help prevent adverse selection

A

Issue policy that is requested

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Part two of app for life ins provides questions regarding all except

Recent surgeries
Other ins coverages
Family health history
Alcohol and tobacco consumption

A

Other ins coverages

26
Q

Agent fails to obtain applicant’s signature on app

Send app to insurer with note explaining absence of signature
Return app to applicant for signature
Sign application for applicant
Sign application stating it was by agent

A

Return for signature

27
Q

As field underwriter producer responsible for all except

Issue policy
Obtain signatures on app for ins
Help prevent adverse selection

A

Issue policy requested

28
Q

When agent collects initial premium from applicant agent should issue

Statement of good health
Warranty
Premium receipt

A

Premium receipt

29
Q

Earliest policy may go into effect

First premium is paid
Insurer approves app
App is signed and check given to agent

A

App signed and check given to agent

30
Q

Applied for policy and paid initial premium
Insurer issued a conditional receipt
Five days later applicant had to submit to medical exam
What is effective date

Date of issue
Date of application
Date of medical exam
Date of policy delivery

A

Date of medical exam

31
Q

Receives conditional receipt but dies before policy is issued, insurer will

Not pay policy under any circ
Automatically pay proceeds
Pay policy only if it would have issued the policy

A

Pay policy only if it would have issued the policy

32
Q

Applied for ins and paid initial premium on aug 14
Issued a conditional rec
During underwriting process ins company found no reason to reject risk or classify it other than as standard
Killed in accident 22nd before issued

Issue policy anyway and pay face value
Negotiate reduced settlement
Keep premium to y’s estate since has no obligation to pay

A

Issue policy anyway and pay face value to beneficiary

33
Q

Purpose of conditional rec

Guarantees policy issued in amount applied for
Serves as proof that app has been determined insurable
Given to apps who fully prepay the premium
Intended to provide coverage on date prior to policy issue

A

Intended to provide coverage on date prior to policy issue

34
Q

Agent known as field underwriter bc of info agent gathers for insurer to

Reduce number of staff underwriters
Comply with state law
Pre select applicants that would present lowest risk of loss for insurer

A

Preselect applicants that would present the lowest risk of loss for insurer

35
Q

When must insurable interest exist in life ins policy

Time of app
At time of policy delivery
When change of beneficiary
Time of loss

A

Time of application

36
Q

Which is not example of valid insurable interest

Debit in life of creditor
Business partners in each other’s lives
Employer in key employees life
Child in parents lives

A

Debtor in life of creditor

37
Q

Insurer receives a report regarding a potential insured that includes insured’s financial status hobbies habits

Medical info bureau report
Agent report
Underwriter’s report
Inspection report

A

Inspection report

38
Q

Who is responsible for final risk selection

Underwriters
Executive officers
Accountants
Producers agents

A

Underwriters

39
Q

Under fair credit reporting act if consumer challenges accuracy of info contained in consumer or investigative report reporting agency must

Change report
Sean actually copy of entire report to consumer
Respond to consumer’s complaint
Defend report if agency feels it is accurate

A

Respond to consumer’s complaint

40
Q

Which of following reports will provide the underwriter with info about ins applicant’s credit

Consumer report
Inspection report
Agent’s report
Any federal report

A

Consumer report

41
Q

If consumer challenges the accuracy of info contained in consumer or investigative report reporting agency must

Change report
Send certified copy of report to consumer
Respond to consumers complaint

A

Respond to consumer’s complaint

42
Q

Federal fair credit reporting act

Protects customer privacy
Regulates telemarketing
Regulates consumer reports

A

Regulates consumer reports

43
Q

Ho makes up medical information bureau

Insurers
Hospitals
Former insured

A

Insurers

44
Q

Maximum penalty for habitual willful noncompliance with fair credit reporting act

2500
1000
Revocation of license

A

2500

45
Q

How long does insurer have to notify consumer that consumer report will be obtained

3 days
4 days
5 days

A

Three days

46
Q

Applicant who receives preferred risk classification qualifies for

Higher premiums than one with standard risk
Lower premiums than one with standard risk
Dividends payable for lack of claims
Higher premiums than one with substandard risk

A

Lower premiums than person who receives a standard risk

47
Q

Describes standard risk classification in same age group with similar lifestyles

Standard risk is representative of majority of ppl
Standard risk pays higher premium
Standard risk requires extra rating

A

Standard risk is representative of majority of people

48
Q

Results in highest premium

Substandard risk
Standard risk
Preferred risk
All risks pay equal premiums

A

Substandard risk

49
Q

Stranger originated life ins policies are in direct opposition to principal of

Good faith
Insurable interest
Indemnity
Law of large numbers

A

Insurable interest

50
Q

In classifying a risk home office underwriting department will look at all except

Past medical history
Present physical condition
Present occupation
Past income

A

Past income

51
Q

Best details underwriting process for life ins

Issuance of policies
Reporting and rejection of risks
Selection classification and rating of risks

A

Selection classification and rating of risks

52
Q

Investor buys life policy on elderly person in order to sell it for a life settlement

Visit cal settlement
Third party ownership
STOLI policy
Prearranged funeral plan

A

STOLI stranger originated life insurance

53
Q

Another name for substandard risk classification is

Controlled
Declinedelevated
Rated

A

Rated

54
Q

Specific info about policy

Policy summary
Illustrations
Buyers guide

A

Policy summary

55
Q

Agent and applicant for policy fill out and sign app. Applicant does not wish to give initial premium and no conditional rec is issued. When is coverage

On app date
When agent submits app to company and when company issues a conditional receipt
When agent delivers policy collects initial premium and applicant completes an acceptable statement of good health

A

When the agent delivers the policy collects the initial premium and applicant completes an acceptable statement of good health

56
Q

Explains life ins in general terms in order to assist applicant in process

Buyers guide
Insurance index
Policy summary

A

Buyers guide

57
Q

Included in policy summary

Primary and secondary beneficiary designations
Copies of illustrations and app
Premiums amounts and surrender values

A

Premium amounts and surrender values

58
Q

High documents delivered to policyowner includes info about premium accts cash values surrender values and death benefits for specific policy years

Buyers guide
Policy summary
Notice regarding replacement
Privacy notice

A

Policy summary

59
Q

One frame for filing relevant suspicious activity reports

30 days of initial discovery
30 days of suspicious transaction
90 days of initial discovery

A

30 days of initial discovery

60
Q

If policy includes a free look period of at least 10 days the buyers guide may be delivered to applicant no later than

Within 30 days after first premium payment was collected
Prior to filling out an app for insurance
With the policy

A

With the policy

Ins (77 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions