L&H 2 Flashcards

1
Q

When should an agent obtain a statement of good health from the insured?

A

When the premium was paid upon policy delivery rather than at the time of application

Why: If the initial premium is not paid with the application, the agent will be required to collect the premium and a statement of continued good health from the insured upon policy delivery.

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2
Q

Conditions that increase the chance of a loss are known as what?

A

Hazards

Why: A hazard is any factor that increases the likelihood that a loss may occur.

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3
Q

What type of beneficiary can be changed at any point by the policyowner?

A

Revocable

Why: The policyowner may change a revocable designation at any time and without the consent of the beneficiary. Irrevocable beneficiaries, on the other hand, have a vested interest in the policy, so the policy owner may not be able to exercise certain rights without their consent.

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4
Q

Who is a field underwriter?

A

Agent / Producer

Why: An agent is the company’s field underwriter. The agent’s responsibility is to gather credible information from an applicant that would assist the company Underwriters in the risk selection process.

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5
Q

What information are the members of the Medical Information Bureau required to report?

A

Adverse medical information about the applicants or insureds

Why: The medical information Bureau (MIB) is a membership corporation owned by member insurance companies. The MIB allows insurers to share adverse medical information about insureds.

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6
Q

When can an irrevocable beneficiary be changed?

A

With the written consent of the beneficiary

Why: Once an irrevocable beneficiary is designated to the policy, the policyholder must obtain the permission of the beneficiary prior to making any changes in the policy.

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7
Q

What are the four elements of an insurance contract?

A

Agreement (offer and acceptance), consideration, competent parties and legal purpose

Why: For insurance contracts to be legally binding, they must have four essential elements: Agreement (offer and acceptance), consideration, competent parties and legal purpose.

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8
Q

In Insurance, when is the offer usually made on a contract?

A

When the insurance application is submitted

Why: The offer is usually made by the applicant in the form of the application for insurance. Acceptance takes place when the insurer approves the application and issues of policy.

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9
Q

What is a probationary period in group health insurance?

A

The period of time that must lapse before an employee is eligible for group health coverage

Why: The probationary period is the waiting period new employees must satisfy before becoming eligible for group health coverage.

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10
Q

What entities make up the Medical Information Bureau?

A

Insurers

Why: The MIB is a Membership Corporation owned by member insurance companies. The MIB allows insurers to share adverse medical information about insureds.

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