Life Angent pt 2 Flashcards

1
Q

Insurance is defined as the transfer of ___

A

risk

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2
Q

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

A

Insurance

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3
Q

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

A

Pure

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4
Q

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

A

Speculative

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5
Q

the chance of loss

A

Risk

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6
Q

A condition that could result in a loss

A

Exposure

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7
Q

Leaving matches within reach of a child is a ______

A

hazard

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8
Q

something that increases the

chance of loss

A

Hazard

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9
Q

a cause of loss, such as fire.

A

Peril

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10
Q

Losses must be ______ to be insurable

A

calculable

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11
Q

The _________ allows insurers to predict claims more accurately.

A

law of large numbers

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12
Q

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

A

law of large numbers

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13
Q

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

A

more people in a group

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14
Q

Why do most insurers buy reinsurance?

A

to protect themselves in the event of a catastrophic loss

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15
Q

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

A

True

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16
Q

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

A

False

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17
Q

Can a minor enforce the contract against the insurer?

A

Yes

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18
Q

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

A

No

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19
Q

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

A

No

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20
Q

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

A

fraud

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21
Q

The government offers insurance primarily based upon what needs?

A

social needs, such as flood insurance and workers compensation

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22
Q

What company has their home office in another state?

A

Foreign

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23
Q

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

A

Alien

24
Q

_________ represent the insurance company, not the insured

A

Agent/Producer

25
Q

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

A

Agent/Producer

26
Q

What types of authority does the producer have?

A

express, implied and apparent authority

27
Q

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

A

Espress authority

28
Q

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

A

Binding/Apparent authority

29
Q

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

A

Implied authority

30
Q

The elements of a legal contract

A

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

31
Q

A requirement for a valid contract is

A

offer and acceptance, or mutual agreement

32
Q

A specific and definite proposal to enter into a contract is

A

Offer

33
Q

Does the consideration on a policy need to be equal?

A

No

34
Q

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

A

True

35
Q

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

A

False

36
Q

Under what clause must something of value must be exchanged?

A

Consideration

37
Q

Under what contract must the outcome depend upon chance?

A

Aleatory

38
Q

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

A

adhesion

39
Q

Another word for Insurance policies

A

unilateral contracts

40
Q

A contract where one party makes an enforceable promise the insurer

A

unilateral contracts

41
Q

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

A

indemnity

42
Q

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

A

utmost good faith

43
Q

the truth to the best of one’s knowledge

A

Representation

44
Q

a sworn statement of truth, guaranteed to be true.

A

Warranty

45
Q

the failure to disclose a material fact.

A

Concealment

46
Q

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

A

Waiver

47
Q

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

A

Insurable interest

48
Q

_______ may be based on economics or family relationships

A

Insurable interest

49
Q

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

A

Insurable interest

50
Q

Buying a life insurance policy creates ______ _______

A

immediate estate

51
Q

When life insurance is used to pay estate taxes

A

estate conservation

52
Q

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

A

Life settlement

53
Q

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

A

Viator

54
Q

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

A

human life value approach

55
Q

The ______ approach to life insurance does not consider future earnings

A

needs