Life Angent pt 2

Question 1

Insurance is defined as the transfer of ___

Answer 1

risk

Question 2

transfer of PURE risk to the insurance company in consideration for a premium.

Answer 2

Insurance

Question 3

What kind of risk is the chance of loss without any chance of gain

Answer 3

Pure

Question 4

What kind of risk is the possibility for gain or loss and is not insurable.

Answer 4

Speculative

Question 5

the chance of loss

Answer 5

Risk

Question 6

A condition that could result in a loss

Answer 6

Exposure

Question 7

Leaving matches within reach of a child is a ______

Answer 7

hazard

Question 8

something that increases the

chance of loss

Answer 8

Hazard

Question 9

a cause of loss, such as fire.

Answer 9

Peril

Question 10

Losses must be ______ to be insurable

Answer 10

calculable

Question 11

The _________ allows insurers to predict claims more accurately.

Answer 11

law of large numbers

Question 12

The _________ applies to groups of people, not to individuals. The more people in the
group, the more accurate the predictions are.

Answer 12

law of large numbers

Question 13

What makes the law of large numbers more accurate in the predictions?

Answer 13

more people in a group

Question 14

Why do most insurers buy reinsurance?

Answer 14

to protect themselves in the event of a catastrophic loss

Question 15

True/False: Insurance laws are not required to be uniform from one state to another

Answer 15

True

Question 16

True/False: Insurance laws are required to be uniform from one state to another

Answer 16

False

Question 17

Can a minor enforce the contract against the insurer?

Answer 17

Yes

Question 18

Can insurers enforce a contract that they enter into with a minor?

Answer 18

No

Question 19

Is it guaranteeed if a stock insurer may pay dividends to its shareholders (stockholders)?

Answer 19

No

Question 20

The government does not offer insurance for the purpose of preventing ______.

Answer 20

fraud

Question 21

The government offers insurance primarily based upon what needs?

Answer 21

social needs, such as flood insurance and workers compensation

Question 22

What company has their home office in another state?

Answer 22

Foreign

Question 23

What company is an insurer based in Canada who sells in the U.S.?

Answer 23

Alien

Question 24

_________ represent the insurance company, not the insured

Answer 24

Agent/Producer

Question 25

Who may personally liable when violating the producer’s contract?

Answer 25

Agent/Producer

Question 26

What types of authority does the producer have?

Answer 26

express, implied and apparent authority

Question 27

The authority a producer has that is written in his or her contract

Answer 27

Espress authority

Question 28

The authority in the producer’s contract with the insurer the producer represents.

Answer 28

Binding/Apparent authority

Question 29

The authority not expressly (written) granted, but is actual authority the producer has to transact normal business activities

Answer 29

Implied authority

Question 30

The elements of a legal contract

Answer 30

C-O-A-L (consideration, offer, acceptance, legal purpose and legal capacity).

Question 31

A requirement for a valid contract is

Answer 31

offer and acceptance, or mutual agreement

Question 32

A specific and definite proposal to enter into a contract is

Answer 32

Offer

Question 33

Does the consideration on a policy need to be equal?

Answer 33

No

Question 34

True/False: A policy may not be voided due to unequal consideration

Answer 34

True

Question 35

True/False: A policy will be voided due to unequal consideration

Answer 35

False

Question 36

Under what clause must something of value must be exchanged?

Answer 36

Consideration

Question 37

Under what contract must the outcome depend upon chance?

Answer 37

Aleatory

Question 38

The doctrine of _______ states that policy ambiguities always favor the insured

Answer 38

adhesion

Question 39

Another word for Insurance policies

Answer 39

unilateral contracts

Question 40

A contract where one party makes an enforceable promise the insurer

Answer 40

unilateral contracts

Question 41

the purpose of insurance is to restore the insured to the same position as before the loss occurred

Answer 41

indemnity

Question 42

The doctrine of ________ states that all parties to an insurance transaction are honest

Answer 42

utmost good faith

Question 43

the truth to the best of one’s knowledge

Answer 43

Representation

Question 44

a sworn statement of truth, guaranteed to be true.

Answer 44

Warranty

Question 45

the failure to disclose a material fact.

Answer 45

Concealment

Question 46

When an insurer voluntarily gives up the right to obtain information that they are entitled to

Answer 46

Waiver

Question 47

_______ must exist at the time of application, but not necessarily at the time of a claim

Answer 47

Insurable interest

Question 48

_______ may be based on economics or family relationships

Answer 48

Insurable interest

Question 49

What exists if someone would benefit if another person continues to live?

Answer 49

Insurable interest

Question 50

Buying a life insurance policy creates ______ _______

Answer 50

immediate estate

Question 51

When life insurance is used to pay estate taxes

Answer 51

estate conservation

Question 52

What kind of contract is between the life insurance policyowner and a third party?

Answer 52

Life settlement

Question 53

A person who seeks to sell his or her life insurance policy in a viatical settlement

Answer 53

Viator

Question 54

created to establish what a family would lose in income upon the death of the sole or chief income provider

Answer 54

human life value approach

Question 55

The ______ approach to life insurance does not consider future earnings

Answer 55

needs