You got This! Flashcards
A group owned insurance company that is for MeD to assume and spread. The liability. Risks of its members is known as.
 risk retention group
Which of these describe a participating insurance policy
Policy owners are entitled to receive dividends
An insurance applicant must be informed of an investigation regarding his, or her reputation and character, according to the
Fair credit reporting act
What is the name of the law that requires to disclose information gathering practices and where the information was obtained?
Fair credit reporting act
Dividends payable to the policy owner are
Declared by the insurance company
When third-party ownership is involved, applicants, who also happen to be the stated, primary beneficiary are required to have
Insurable interest in proposed insured
At what point does an informal agreement become a binding contract?
When consideration is provided by one of the parties to the contract
Insurance policies are considered aleatory contracts, because
Performance is conditioned upon a future occurrence
A life insurance arrangement, which circumvent insurable interest statute is called
Investor originated life insurance
Which of the following arrangements allow one to bypass insurable
Investor originated life insurance
Stranger originated, life insurance (STOLI) has been found to be in violation of which of the following contractual elements?
Legal purpose (insurable interest)
Which of these is not a type of agent authority?
Principle
Which of the following best describes a warranty?
Statement guaranteed to be true
In regards to representations or warranties, which of these statements is true
If material to the risk, false representations will void the policy
Insurance policies are offered on a take it, or leave it basis, which makes them
Contracts of adhesion
A policy can only be modified by
The insurance company
Which of these is a statement that is assured to be true in every respect?
Warranty
If a contract of adhesion contains complicated language, to whom with the interpretation be in favor of?
Insured
Statements made on an insurance application that are believed to be true to the best of the applicants knowledge are called
Representations
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q suddenly dies and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?
Aleatory
The consideration clause of an insurance contract includes
The schedule amount of premium payment
When must insurable interest be present in order for a life insurance contract to be valid?
When the application is made
Life and health insurance policies are
Unilateral contracts
A life insurance policy would be considered a wagering contract without
Insurable interest
All of the following are considered to be typical characteristics, describing the nature of an insurance contract, except
Bilateral
A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of
Adhesion
What is the consideration given by an insurer and the consideration clause of a life insurance policy?
Promise to pay a death benefit to a named beneficiary
