life insurance basics and legal concepts
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| A unilateral contract is: | show 🗑
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| An individual medical plan is usually a: | show 🗑
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| define contract of adhesion | show 🗑
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| A one-sided agreement whereby you promise to do (or refrain from doing) something in return for a performance (not a promise) is what type of contract | show 🗑
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| Kathy is filling out an insurance application. Her broker has explained to her that the statements made in the application are held to a principle of _______________, which means they are not guaranteed to be true. | show 🗑
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| show | subrogation
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| show | a consideration and an offer to buy
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| Ben is making application for a health insurance policy. He has been treated for heart problems in the past, but he answers no to" Have you ever had heart problems". Ben is guilty of | show 🗑
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| In an insurance contract, which concept refers to the fact that the value given by the two parties is unequal | show 🗑
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| Which of the following concepts refers to the option that one party can set aside a contract: -Aleatory -Unilateral -Voidable -Both Unilateral and Voidable | show 🗑
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| show | competent parties
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| Sometimes the values given by two parties are unequal. This is called: | show 🗑
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| What happens when you combine the principles of waiver and estoppel | show 🗑
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| Insurance policies are legal contracts. How do life and/or health insurance contracts differ from other insurance contracts | show 🗑
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| Because insurance policies are legal contracts, they are subject to the general law of contracts. What element is not necessary for the formation of a valid contract under the law? | show 🗑
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| show | conditions
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| When looking at insurance contract characteristics, it is important to know that an exchange of a promise for a promise is called | show 🗑
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| Because she gets paid on the 15th, Julia routinely pays her insurance premium (due on the 5th) late. Her policy was cancelled for nonpayment of premium. Does Julia have a legal leg to stand on to contest the decision by the insurer to cancel her policy | show 🗑
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| show | false
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| show | a personal contract
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| show | false pretenses
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| If an insurance matter goes to court for interpretation, health insurance contracts are held to the principle of indemnity. This means | show 🗑
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| Which of the following could result in an insurance contract being voided? -Concealment -Fraud -Recission -All of the above | show 🗑
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| t or f Parol (oral) Evidence Rule limits the impact of waiver and estoppel by disallowing oral evidence made before the contract was created and oral evidence is not admissible in court to change or contradict an existing contract | show 🗑
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| true or false: Contractual rights are the basis for private insurance, statues/laws are the basis for government insurance. | show 🗑
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| true or false Private insurance is focused on coverage for private buyers, government insurance strives to provide benefits for all people. | show 🗑
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| true or false Government insurance provides benefits and coverage for individuals that private insurers cannot cover - for financial reasons usually. | show 🗑
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| Many different types of people are involved in the process of selling insurance. Which of the following is not involved in the selling of insurance? -Insurance commissioner -Insurance producer -Insurance solicitor -Insurance agent, broker | show 🗑
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| show | A legal purpose
An agreement
consideration
competent parties
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| show | a contract clearly in favor of one party
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| show | Provides a benefit for a fortuitous event in return for a cash payment
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| show | ambiguous contract
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| show | true
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| A conditional contract depends on | show 🗑
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| Harvey has a major medical plan. Harvey requires a liver transplant, but the insurance company refuses to pay the claim. The policy does not specifically exclude this operation, but they don' include it either. What is the court likely to do in this case? | show 🗑
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| show | how much money the survivor needs
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| human life value approach considers all of the following EXCEPT: Illness and funeral costs Annual salary of the insured Number of years until retirement Future value of current dollars | show 🗑
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| show | 3
mortality/morbidity, expense, interest
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| Illstrtns are sub to all rules EXCEPT: -must include the insurer's name and producer's name -must clearly define any dividend options or non-guaranteed elements -must state the insured's marital status -must contain the insured's name, age and sex | show 🗑
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| show | Obtain a written statement only if a replacement is involved
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| Shelly filled out an application, paid the first premium and handed it to her agent on July 10th. The agent then submitted the application to the insurer on July 12th. The insurer issued the policy on July 15th. what is the effective date of the policy | show 🗑
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| The underwriters utilize a variety of resources to aid the evaluation process. All of the following are used for underwriting EXCEPT: -Health history -Overall physical appearance -Smoking status -Family origins | show 🗑
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| show | substandard
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| When an agent is field underwriting they should know: -That the application contains 3 main parts -That he should correct any errors on the app in the presence of the applicant -That he/she should collect the first premium -All of the above. | show 🗑
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| show | a binding receipt
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| show | state insurance commissioner
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| show | revoke, and a 7,000 fine
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| define needs based approach | show 🗑
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| true or false | show 🗑
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| When a company or another person seeks to take out an insurance policy on a person, they must prove insurable interest exists at what time | show 🗑
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| ________ authority gives an agent the right to operate in a normal business manner doing typical business practices | show 🗑
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| The estimation of the amount of life insurance needed as a dollar valuation by discounting net future earnings of the insured at a reasonable rate of interest is known as: | show 🗑
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| show | buy-sell agreement
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| show | twisting
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| Which of the following is true regarding life insurance and health insurance? -Health insurance is considered a valued contract, life is reimbursement -Life insurance is considered a valued contract, health a reimbursement contract | show 🗑
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| The Mayflower Insurance Company is a stock insurance company. What is its operating objective | show 🗑
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| show | yes
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| show | no
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| Which of the following would be a common use of the proceeds from a life insurance policy? Creation of an estate when the insured dies Funds for funeral expenses Income for survivors of the insured All of the above | show 🗑
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| show | future liabilities
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| show | lower
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| Austin is covered by his employer under a key employee insurance policy. Who is usually the beneficiary on this type of policy | show 🗑
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| Which life insurance approaches states that the value is determined by discounting estimated future income | show 🗑
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| show | morbidity
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| Statistics have proven that our greatest need for income is which of the following | show 🗑
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| What is the major difference between a participating policy and a comparable nonparticipating policy | show 🗑
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| show | Formal authority to change the policy if it benefits the insured
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| When a company opts to self-insure, this is an example of risk ___________. | show 🗑
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| In order to take out a life policy on another person, you must demonstrate that you have an insurable interest. Which of the following could have an insurable interest in another person? Spouse and Employer Neighbor Only Spouse Friend | show 🗑
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| show | the loss must be catastrophic
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| Which of the following is NOT a factor used in determining both life and health premiums? Age Morbidity Expense factor Interest factor | show 🗑
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| show | 20
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| show | future income
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| show | human life value and needs approach
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| John has opted to purchase a participating life insurance policy. What would be higher than if John had chosen a comparable nonparticipating life policy? | show 🗑
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| show | risk reduction
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| show | apparent
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| show | reasonably predictable and definite loss
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| What is the basic difference between what a general agent does as compared to a PPGA | show 🗑
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| Jeff's employer is domiciled (has its home office) in another state. When the company is authorized to do business in this state, it is called a(n) ________ company | show 🗑
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| Which of the following are uses of life insurance? Investment management and Estate Creation Survivor Protection Charitable contributions All of the Above | show 🗑
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| show | entity plan
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| show | acting as a fiduciary
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| ___________ occurs when an agent converts the premium he collects for his personal use? | show 🗑
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| An attitude or state of mind that causes indifference to a hazard resulting in a loss is called which of the following | show 🗑
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| show | Career general agents primarily recruit and train, while PPGA's primarily sell.
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| show | The total premiums paid - less loans received, dividends and premiums paid for supplementary benefits
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| show | risk retention
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| t or f An insurable interest must exist between the policy owner and the insured at the time of the claim | show 🗑
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| show | true
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| Risk involves the chance of loss. Only _________ is insurable. | show 🗑
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| show | Lloyds of London is not an insurance company
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| show | valued
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| An applicant's addiction to drugs is considered what kind of hazard | show 🗑
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| show | half
If the agent is selling in a "controlled" environment, at least half of the agent's business must be from other sources
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| The insurance company can accommodate substandard life insurance risks with a provision that is made for the expected higher death rate. What does this provision entail? | show 🗑
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| show | the owner
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| show | foreign
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| Which of the following are considered in the needs approach? Monthly income Disability income Final expense fund All of the above | show 🗑
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