The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. All of the following are examples of pure risk EXCEPT. Net death benefit will be reduced if the loan is not repaid No interest will be charged on loan balance Term life policies are the only type of insurance that allows policy loans A loan can be taken out for up to the face amount of the policy, Ownership of a life insurance policy may be temporarily transferred with a(n) collateral assignment absolute assignment transferable assignment beneficiary assignment, provide evidence of insurability to the insurer, In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST remit all past-due premiums within the grace period provide evidence of insurability to the insurer resubmit a new life insurance application provide a valid reason for the lapse, Which of the following is considered to be an alternative to a life settlement? All of the following are considered appropriate uses if life insurance for business purposes EXCEPT, Protecting the business by covering entry level employees with life insurance, Level premium permanent insurance accumulates a reserve that will eventually. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. Intentional withholding of material facts that would affect an insurance policy's validity is called a(n). Because of this, an insurance contract is considered In exchange, the policyowner pays premiums. Your email address will not be published. The provision that allows this is called Partial Surrender Subrogation Automatic Premium Loan Accelerated Death Benefit, All of these are characteristics of a universal life insurance policy EXCEPT Flexible death benefit Fixed surrender value Flexible premiums Builds cash value, Which of the following policies does NOT build cash value? Which of the following best describes a symbol Events are those which cannot be controlled by either . An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. Insurance contracts are unilateral contracts. 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 Which of the following best describe the term definition. Chapter3. Legal Concepts of the Insurance Contract C) Legal purpose Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested? Law of large numbers U.S. Census Average mortality incidents Experience of morbidity, Insurance represents the process of risk selection avoidance transference assumption, Doctors pooling their money to cover malpractice exposures, An example of risk sharing would be Adding more security to a high-risk building Choosing not to invest in the stock market Doctors pooling their money to cover malpractice exposures Buying an insurance policy to cover potential liabilities, All of the following are examples of pure risk EXCEPT Losing money at a casino Injured while playing football Falling at a casino and breaking a hip Jewelry stolen during a home robbery, the terms must be accepted or rejected in full, Under a contract of adhesion, there is the potential for an unequal exchange of value the insurer's obligations are dependent upon certain acts of the insured individual the terms must be accepted or rejected in full only one party makes any kind of enforceable promise, According to life insurance contract law, insurable interest exists when any business relationship exists at the time of application at the time of death only when determined by a judge, In an insurance contract, the insurer is the only party legally obligated to perform. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period? Flashcards - Connecticut Insurance Test 2021 - FreezingBlue Principal Capacity, All of the following are elements of an insurance policy EXCEPT implied If she dies 15 years after the policys inception date, how much will her beneficiary receive? Which Of The Following Best Describes A Conditional Insurance Contract The insured, on the other hand, makes few, if any, legally binding promises to the insurer. there is the potential for an unequal exchange of value $0 $5,000 $10,000 $15,000, Determine financial strength of an insurance company, What is the primary purpose of a rating service company such as A.M Best? A) voidable Rob recently died at age 60. Which Of The Following Best Describes A Conditional Insurance Contract. It is the means by which one or more parties bind themselves to certain promises. What does the word level in Level Term describe? A double indemnity benefit will be payable to Matts beneficiary is Matt, All of the following riders can increase the death benefit amount EXCEPT, All of these are valid policy dividend options for a life insurance policyowner EXCEPT, The premium for a Modified whole life policy is, Lower than the typical whole life policy during the first few years and then higher than typical for the remainder, A nonparticipating company is sometimes called a(n), Intentional withholding of material facts that would affect an insurance policys validity is called a(n), Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT. A(n) ________ investigates, negotiates, and settles claims for a few on behalf of an insurance company. B. C) the terms must be accepted or rejected in full be filed with the state Which scenario would most life insurance policies exclude coverage for? Declarations Entire contract Waivers Conditions, A whole life policy option where extended term insurance is selected is called a(n) dividend option settlement option nonforfeiture option interest-only option, Which of these would limit a company's liability to provide insurance coverage? Which Of The Following Best Describes A Conditional Insurance Contract The Fair Credit Reporting Acts main purpose is to, Protect consumers with guidelines regarding credit reporting and distribution, A whole life insurance policy accumulated cash value that becomes, The policy loan value which the insured may borrow against. Use the binomial distribution to find P(x13)P(x \leq 13)P(x13) if the stain removal product's claim is correct. A) Make whole Offering payment of approved claims within 30 days after affirming liability. B) only one party (the insurer) makes any kind of legally enforceable promise A minimum of 12 months after date of purchase, Insurance premium is determined by each of the following factors EXCEPT. nonparticipating life insurance policy participating life insurance policy divisible surplus life insurance policy straight life insurance policy, Which of the following is considered to be an event or condition that increases the probability of an insured's loss? Consideration clause Chapter 3 Legal Concepts of the Insurance Contract - Quizlet 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? b) a contract is an agreement enforceable at law. Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium". Which military service exclusion clause would pay upon his death? Which of the following best defines diction? A. simile B - Weegy C) negotiation between the involved parties Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. Which contract element is insurable interest a component of? The terms of the policy typically outline these conditions . 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? C) at the time of death How could a company manager use a process cost summary to determine if the program to reduce water usage is successful? A. Insurer's promise to pay benefits A paid premium Legal purpose Intent, 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, What is implied authority defined as? aleatory Advertisement. Which of the following BEST describes a conditional insurance contract. Which of the following is a reinstatement condition? B) Apparent Bob and Tom start a business. The insurers obligation to pay a death benefit upon an approved death claim. How does life insurance create an immediate estate? If the consumer price index had gone up 4%, how much may Ron increase the face value of the policy? To see this page as it is meant to appear, please enable your Javascript! A unilateral contract is one in which only one party makes a legally binding guarantee. What is the advantage of adding this rider? C) Insurance carriers One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. Who prosecutes crimes that involve the violation of insurance laws that fall under US Code 1033? Cash surrender Extended term insurance Reduced paid-up insurance Life income annuity, Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? In the case of an insurance contract, the contracting parties are the claimant and the insurer. Science Study Guide Questions. C) Authority given to handle claims and process payments Reduction of premium dividend option Extended term option Paid-up option Cash dividend option, Net death benefit will be reduced if the loan is not repaid, Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. Policy Summary Buyer's Guide Entire Contract Entire Policy, It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill, What is the purpose for having an accelerated death benefit on a life insurance policy? A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? Interest on policy loans is tax deductible Premium payments are tax deductible Pre-death distributions will become taxable Cash value cannot be surrendered early, seeks temporary protection and lower premiums, Term insurance is appropriate for someone who seeks living benefits for themselves seeks a policy that builds cash value seeks temporary protection and lower premiums seeks permanent protection and higher premiums, Shirley has a $500,000 10-year non-renewable level term life policy. Of the following dividend options, which of these is taxable? Contestability clause, In order for a contract to be valid, it must D) Principal Capacity, A unilateral contract is one in which Authority given to handle claims and process payments discreet Vegetable B. Ken is a producer who has obtained Consumer Informations Reports under false pretenses. Only the insurance company has legal obligations. Field underwriting performed by the producer involves, Completing the application and collecting initial premium, An employee under a group insurance policy has the right to name a beneficiary and the right to, Convert to an individual policy in the event of employment termination. A) Express authority A fixed cash value A flexible premium schedule A fixed death benefit The ability to take out a policy loan, The least expensive option to pay off a 30-year mortgage balance would be convertible term life decreasing term life adjustable term life increasing term life, Pre-death distributions are typically taxable, Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test? Accelerated death benefit An example of an unfair claims practice would be 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. B) Law of adhesion Post thoughts, events, experiences, and milestones, as you travel along the path that is uniquely yours. if the insured lives beyond the 5 years, no benefits are payable. Which of these features are held exclusively by variable universal life insurance? LIFE INSURANCE LICENSING EXAM Flashcards | Chegg.com Bob dies 12 months later. The policies continue in force with no change. 30 seconds. B) Implied authority Juvenile insurance Family income insurance Spouse insurance Term rider, A life insurance policy written on one contract for two people in which it is payable upon the first death is called Split Shared Joint Survivorship, Level premium permanent insurance accumulates a reserve that will eventually equal the face amount of the policy pay a dividend to the policyowner require the policyowner to make periodic withdrawals become larger than the face amount, A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a(n) adjustable policy limited pay policy level term policy variable universal policy, term, whole, and universal life insurance, What types of life insurance are normally used for key employee indemnification? 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. Barry offers Chris his mountain cabin for the weekend to secure his order for his insurance business. d) an agreement requires a definite offer and an indefinite acceptance. In this situation, who will receive Bob's policy proceeds? What would happen if a life insurance applicant is given a conditional receipt? 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.