(D) Only one party is legally bound to the contract. What would happen if a life insurance applicant is given a conditional receipt? other insurance Parent and children An individual who has a hobby racing cars once a month. C) statements made in the application and the premium Active Status Results Leave, A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n) automatic premium loan nonforfeiture option collateral assignment irrevocable assignment, Period of time after the premium is due but the policy remains in force, What is an insurance policy's grace period? Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Which of the following BEST describes a conditional insurance contract? a) a conditional acceptance allows the parties to negotiate the definite terms of the contract upon the completion of the contract. Because insurance premiums are tax-deductible Because dividends are already subject to capital gains Because dividends are payable directly to the policyholder Because dividends are considered to be a return of premium, A type of insurer that is owned by its policyowners is called domestic mutual stock in-house, What is considered to be the primary reason for buying life insurance? 2 See answers Policyowner has the right to select the investment which will provide the greatest return. guarantee D) the authority to add provisions to a contract, C) the authority to represent the insurer, Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. 2003-2023 Chegg Inc. All rights reserved. Sorry, you have Javascript Disabled! C) Indemnity contract Which military service exclusion clause would pay upon his death? A) definitions An individual who removes the risk of losing money in the stock market by never purchasing stocks is said to be engaging in. Aleatory Contract: A contract type in which the parties involved do not have to perform a particular action until a specific event occurs. A contract that requires certain conditions or acts by the insured individual This means that the insurer's promise to pay benefits depends on the occurrence of an event covered by the contract. In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. A) producer's apparent authority If Mike dies first, the policy proceeds will no longer provide insurance protection will go to Mike's estate will be divided by probate will not be paid until the last brother dies, The gap between the total death benefit and the policy's cash value, What is a corridor in relation to a Universal Life insurance policy? Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed in Ken? aleatory Which of the following BEST describes a conditional insurance contract? Variable life insurance and Universal life insurance are very similar. B) Implied authority Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties Bob dies 12 months later. Identify the type of financing (stock or bond) that best answers the question. Which of the following products would allow him to accomplish this? D) imposed authority, What makes an insurance policy a unilateral contract? A) Express A contract that requires certain conditions or acts by the insured individual. A) offer unilateral, Ambiguities in an insurance policy are always resolved in favor of the This is an example of: An example of unfair discrimination would be, When an insurer charges a higher rate for insurance based on an insureds race, religion, or national origin, Fixed period settlement options are considered to be a form of a(n). be in writing C) fiduciary trust ______ is NOT an element of a valid contract. Required fields are marked *. Which Of The Following Statements About Personal Selling Is Correct? Authority given to an agent to act outside the scope of the agency agreement, Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties, When the principal gives the agent authority in writing, it's referred to as A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification? It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. which of the following best describes a conditional insurance contract? A policy containing exclusions or limits that are not clearly disclosed to the policyholder, or a premium that is significantly higher than the risk covered, could be considered unfair or one-sided. D) Consideration clause, When the principal gives the agent authority in writing, it's referred to as This is called risk retention preexisting conditions law of large numbers adverse selection, What is known as the immediate specific event causing loss and giving rise to risk? If the insured dies at any time during the 5 years, his beneficiary will receive the policy's face value. C) the terms must be accepted or rejected in full D) Intent, Which contract element is insurable interest a component of? C) consideration Are you looking for the correct answer to the question Which of the following BEST describes a conditional insurance contract?? When the principal gives the agent authority in writing, its referred to as, The terms must be accepted or rejected in full. Accelerated death benefit rider Waiver of premium rider Extended term option Decreasing term insurance. Under a life insurance policy, what does the insuring clause state? 1 pt. Notify me of follow-up comments by email. ______ is NOT an element of a valid contract. A minimum of 12 months after date of purchase, Insurance premium is determined by each of the following factors EXCEPT. The annuitants life expectancy determines the annuity payments, No one may be denied coverage by an insurance company due to, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n). She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. What is the difference between insurance condition and warranty? The above question Which of the following BEST describes a conditional insurance contract?, Was part of Insurance MCQs & Answers. Dorian exercises a nonforfeiture option by using his life policys cash value to purchase an extended term insurance option. Corporations, like all firms, can raise money by borrowing from banks and other lending institutions. B) Offer and acceptance Andy the annuitant dies before the annuity start date. Which of these is considered to be a disadvantage of owning this type of annuity? Bob and Tom start a business. Which of the following is CORRECT regarding the death benefit amount? B) acceptance C) apparent authority C) Insurance carriers A contract that requires certain conditions or acts by the insured individual. the insurer's obligations are dependent upon certain acts of the insured individual D) only one party makes any kind of enforceable promise, C) the terms must be accepted or rejected in full, What is implied authority defined as? Which of the following is true of the law of contracts? express, ______ is NOT an element of a valid contract. Shirley has a $500,000 10-year-non-renewable level term life policy. if the insured lives beyond the 5 years, no benefits are payable. Competent parties Offer and acceptance Consideration Legal purpose, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? Adjustable life policy Variable universal policy Universal policy Modified whole life policy, A securities license is required for a life insurance producer to sell modified life insurance Modified Endowment Contracts (MEC) variable life insurance universal life insurance, The shorter the payment period, the higher the premium, The statement which best describes the relationship between the premiums of a whole life policy and the premium payment period is The shorter the payment period, the lower the premium The longer the payment period, the higher the premium The shorter the payment period, the higher the premium The payment period has no affect on the premium payment, Policyowner has the right to select the investment which will provide the greatest return, Variable life insurance and Universal life insurance are very similar. B) only an offer discreet apparent implied express, Bob and Tom start a business. The automatic premium loan provision authorized an insurer to withdraw from a policys cash value the amount of, Past due premiums that have not been paid by the end of the grace period. When does a life insurance policy typically become effective? a. medical expenses covered under Pat's employer-sponsored group health insurance. Waiver Exclusion Rider Provision, The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n) sickness suicide accident war, An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? C) at the time of death A marathon is 42.2 kilometers. An insurer's claim settlement practices are regulated by the Securities and Exchange Commission (SEC) National Association of Claims Adjusters (NACA) National Association of Insurance Commissioners (NAIC) State insurance departments, A life insurance company has transferred some of its risk to another insurer. A) One party is restored to the same financial position the party was in before the loss occurred B) The unequal exchange of value or consideration for both parties C) One party (the insurance company) prepares the contract with no negotiation between the applicant and insurer D) Only one party (the insurer) makes any kind of enforceable promise they are "take it or leave it" contracts. Key elements of Organizational Behavior - People, Structure ,Technology & External Environment | Organizational Behavior, Penology - Meaning, Types, Importance, Scope and Example | Sociology, Karmachari Sanchaya Kosh - | Employees Provident Fund Nepal, Perceptual Errors -Types of Perceptual Error | Fundamentals of Organizational Behaviour, Difference between Manufacturing and Service Operations | Operation Management. Which of the following does a producer NOT have a fiduciary responsibility to? What is a corridor in relation to a Universal Life insurance policy? A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n). The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. Which of these features are held exclusively by variable universal life insurance? Rob recently died at age 60. The policies continue in force with no change. A policy containing exclusions or limits that are not clearly disclosed to the policyholder, or a premium that is significantly higher than the risk covered, could be considered unfair or one-sided. All of the following are examples of a Business Continuation Plan EXCEPT. Policyowner may increase or decrease the premium payments Policyowner may increase or decrease the face amount Policyowner can contribute large sums of money Policyowner has the right to select the investment which will provide the greatest return, All of the following riders can increase the death benefit amount EXCEPT Cost of Living Waiver of Premium Accidental Death Rider Guaranteed Insurability, Which of these is NOT considered to be a common life insurance nonforfeiture option? Peril Hazard Loss factor Liability, Which of these techniques will remove the risk of losing money in the stock market by never purchasing stocks? The gap between the total death benefit and the policy's cash value The gap between when a claim is filed and when the death benefit is received The amount of interest that has accumulated in the policy's cash value The point in time when the policy's cash value reaches $0, Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. Only the insured pays the premium Options A) A contract that requires certain conditions or acts by the insured individual B) A contract that has the potential for the unequal exchange of consideration for both parties C) A contract where one party "adheres" to the terms of the contract consideration The death benefit paid will be what the premium would have purchased at the correct age, Converting a group plan to permanent life insurance requires, The conversion being applied for within 31 days of termination. Definition refers to a description which is given to a word, idea or phenomenon . the contract is voidable upon proof of fraud. D) Personal contract, The importance of a representation is demonstrated in what rule? A life insurance policy that is subject to a contract interest rate is referred to as. C.$2,113 C) Law of Agency B. Vegetable B. Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value, Which type of policy combines the flexibility of a universal life policy with investment choices? voidable D) Utmost good faith, What does the insurance term "indemnity" refer to? Dependent term Guaranteed insurability Primary term Family term, Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested? When handling premiums for an insured, an agent is acting in which capacity? 2. implied Which of the following statements is true? What is the purpose for having an accelerated death benefit on a life insurance policy? producer All of the following statements about Carl's coverage are correct. Which type of multiple protection policy pays on the death of the last person? B) Contract of adhesion A) Tom's spouse Legal Consideration Competent parties Countersignature, A contract that requires certain conditions or acts by the insured individual, Which of the following BEST describes a conditional insurance contract? Which of these riders will pay a death benefit if the insureds spouse dies? B) NAIC representation Sister and brother B) issuance of the policy purpose, Insurable interest does NOT occur in which of the following relationships? C) representation C) Bob's spouse What is the advantage of adding this rider? A Modified Endowment Contract (MEC) is best described as, A life insurance contract which accumulated cash values higher than the IRS will allow, Doctors pooling their money to cover malpractice exposures, The free-look provision gives the policyowner, The right to return the policy for a full refund within a specified number of days. A contract that requires certain conditions or acts by the insured individual A contract that has the potential for the unequal exchange of consideration for both parties A contract where one party "adheres" to the terms of the contract A contract where only one party makes any kind of enforceable contract, statements made in the application and the premium, In a life or health insurance contract, "consideration" would be the offer and acceptance premium only statements made in the application and the premium statements made in the application only, According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's underwriting issuance of the policy promises made legal reserve, All of the following are elements of an insurance policy EXCEPT definitions other insurance claim forms conditions, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as Apparent Estoppel Aleatory Unilateral, Which of the following is an example of the insured's consideration? Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested? A new stain removal product claims to completely remove the stains on 909090 percent of all stained garments. issuance of the policy Anheuser-Busch InBev is trying to reduce its water usage. there is the potential for an unequal exchange of value C) adhesion The present cash value of the policy equals $250,000. After being properly appointed by the insurer. C) Consideration C) The insured and the insurer contribute equally to the contract. underwriter, Life Insurance Policies - Provisions, Options, Fundamentals of Financial Management, Concise Edition, Micro Oneliners: Urinary Tract Infections (UT. y=f(x)=10x5x+1535if0x3if3
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