The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? Premium clause Consideration clause Adhesion clause Contestability clause, When the principal gives the agent authority in writing, it's referred to as express authority implied authority apparent authority imposed authority, Ambiguities in an insurance policy are always resolved in favor of the insured producer insurer underwriter, ______ is NOT an element of a valid contract. The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? Zucchini is the best descriptive word. What kind of policy is this? A policyowner can receive a percentage payment of the death benefits prior to death by using what kind of contract? Provide death benefits Provide money for retirement Provide living benefits Provide money for college, The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT charities political organizations insurance sales calls surveys, protect consumers with guidelines regarding credit reporting and distribution, The Fair Credit and Reporting Act's main purpose is to assist in the underwriting of insurance policies protect insurers from an applicant's misrepresentation protect consumers with guidelines regarding credit reporting and distribution assist an insurer in determining an applicant's creditworthiness, What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus? Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed in Ken? Which of the following Best Describes a Conditional Insurance Contract Which of the following does a life insurance policy summary normally include? Policy Application Riders Certificate of Authority, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) guaranteed term rider guaranteed insurability rider accelerated benefit rider cost of living rider, The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid minus indebtedness and with interest during the last 12 months minus indebtedness and without interest during the last 6 months, A life insurance policyowner does NOT have the right to change a beneficiary select a beneficiary take out a policy loan revoke an absolute assignment, A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT fare-paying passenger pilot of personal airplane suicide war, The insurer's obligation to pay a death benefit upon an approved death claim, Under a life insurance policy, what does the insuring clause state? A) A contract that requires certain conditions or acts by the insured individual. term, whole, and universal life insurance increasing term insurance joint, credit, and group life insurance adjustable, permanent, and limited-pay life insurance, Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. When the term insurance expires. C) the authority to represent the insurer C) Charge more premium In this situation, who will receive Bob's policy proceeds? performance is conditioned upon a future occurrence. D) Only the insured is legally bound, Bob and Tom start a business. Both partners are still married at the time of Bob's death. Bilateral Contract: Definition, How It Works, and Example - Investopedia Write a summary of the main ideas. Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident? A) when any business relationship exists D) Utmost good faith, What does the insurance term "indemnity" refer to? If the other agreement or condition is performed, then the conditional contract is . Expert answered|Malekith22|Points 0| Log in for more information. LIFE INSURANCE LICENSING EXAM Flashcards | Chegg.com The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. An insurer exaggerating its dividends in a magazine advertisement. Post thoughts, events, experiences, and milestones, as you travel along the path that is uniquely yours. 2 See answers D) Offer and acceptance must be involved, B) Equal consideration is required between the involved parties, A contract requires Child term rider Payor rider Family maintenance rider Family income rider, What happens to the coverage under a children's term rider when that child reaches a certain specified age? A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n). Intent, The deeds and actions of a producer indicate what kind of authority? which of the following best describes a conditional insurance contract? 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? Insurance Cram Ch. 6 Flashcards | Chegg.com underwriting Which of the following are the premium payments for a universal life policy NOT used for? The face amount and premium will remain constant over the 10-year period. B) the unwritten authority that the agent is assumed to have WINDOWPANE is the live-streaming app for sharing your life as it happens, without filters, editing, or anything fake. The present cash value of the policy equals $250,000. C) The insured and the insurer contribute equally to the contract. Barry offers Chris his mountain cabin for the weekend to secure his order for his insurance business. What is the purpose for having an accelerated death benefit on a life insurance policy? A) Legal Which of the following best describes a symbol Completing all applications and collecting initial premiums. representation A rating from a rating service company, such as A.M. Best An illustration A sales presentation Direct mailing from an agency, Fraternal Benefit Society has each of the following characteristics EXCEPT Incorporated Without capital stock Exist For profit Exist for the benefit of its members, A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called A self-derived plan A multiple-employer plan A blanket plan A self-funded plan, An insurer's ability to make unpredictable payouts to policyowners is called investment values liquidity assets capital, Ken is a producer who has obtained Consumer Information Reports under false pretenses. What are conditions in an insurance policy? Contestability clause, In order for a contract to be valid, it must 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". Death benefits Cash value Loading costs Separate account investments, Which policy feature makes a universal life policy different from a whole life policy? The agent's obligation to provide the proper amount of coverage The insurer's obligation to return all premiums upon an approved death claim The insurer's obligation to pay a death benefit upon an approved death claim The agent's obligation to pay a death benefit upon an approved death claim, Of the following dividend options, which of these is taxable? consideration When initial premium is collected and policy is issued. b. benefits paid under workers compensation. 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. Under the McCarran-Ferguson Act, what is the minimum penalty for this? For a trip to the hospital, Evan Appleton paid $1,656 in hospital charges, a$750 insurance deductible, and a $457 co-payment. D) Conditional, Which of the following is NOT a requirement of a contract? C) A contract where one party "adheres" to the terms of the contract Adjustable whole life Universal life Decreasing term life Limited whole life, Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? Term, whole, and universal life insurance. Insurance contracts are unilateral contracts. What guarantees that the statements supplied by an insurance applicant are true? underwriter, Life Insurance Policies - Provisions, Options, Fundamentals of Financial Management, Concise Edition, Micro Oneliners: Urinary Tract Infections (UT. A life insurance policyowner does NOT have the right to, Fixed annuities provide each of the following EXCEPT. Asked 10/6/2017 7:04:21 AM. This legal agreement requires prior performance of another agreement or clause in order to be enforceable. D) the contract must be a contract of adhesion, C) there must be legal reasons for entering into the contract, Ambiguities in an insurance policy are always resolved in favor of the Julie has a $100,000 30-year mortgage on her new home. State Insurance Departments NAIC Insurance carriers Insurance producers, Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) estoppel concealment adhesion misrepresentation, The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? Which of the following best describe the term definition. B) only one party (the insurer) makes any kind of legally enforceable promise be filed with the state 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? 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. if the insured lives beyond the 5 years, no benefits are payable. All of the following are examples of pure risk EXCEPT. Which of these features are held exclusively by variable universal life insurance? How many days is a temporary producers license valid? 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. D) an offer and acceptance of the contract terms, D) an offer and acceptance of the contract terms, In an insurance contract, the applicant's "consideration" is the The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement? offer What does the word level in Level Term describe? (D) Only one party is legally bound to the contract. Bob dies 12 months later. Andy the annuitant dies before the annuity start date. D) Insurance producers, If a material warranty violation on the part of the insured is found, what recourse does an insurer have? Group policy Adjustable life policy Whole life policy Endowment policy, A renewable Term Life insurance policy allows the policyowner the right to renew the policy at anytime the policyowner chooses as many times as the policyowner chooses paying the same premium as before the renewal without producing proof of insurability, When a decreasing term policy is purchased, it contains a decreasing death benefit and increasing premiums level premiums decreasing premiums variable premiums, Julie has a $100,000 30-year mortgage on her new home. A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification? discreet apparent implied express, Bob and Tom start a business. express authority B) concealment Before using an assumed name in Utah, a producer MUST, Maria would like an annuity that provides a guaranteed accumulation or payout. The gap between the total death benefit and the policys cash value. Modified Endowment Contract Current assumptive whole life Credit life insurance Equity index whole life, What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death? After being properly appointed by the insurer. D) Personal contract, The importance of a representation is demonstrated in what rule? 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? Chapter 3 Legal Concepts of the Insurance Contract - Quizlet C) the contract has been prepared by one party (the insurance company) with no negotiation between the applicant and the insurer Which of the following BEST describes a conditional insurance contract? they are "take it or leave it" contracts. 2003-2023 Chegg Inc. All rights reserved. If she dies 15 years after the policy's inception date, how much will her beneficiary receive? Business owner and business client, The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? A) Authority given in writing to an agent in the agency agreement If threats or force is used to affect an insurance transaction, the unfair trade practice of __________ has been committed. D) Legal Purpose, Which of the following is present when an applicant stands to lose value if the insured dies? Sorry, you have Javascript Disabled! A non-contributory health insurance plan helps the insurer avoid. 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. B) producer 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". Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. Which of these features are held exclusively by variable universal life insurance? Insurance interest does NOT occur in which of the following relationships? guarantee Insurer's promise to pay benefits D) Authority given to an agent to act outside the scope of the agency agreement, B) 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, Legal purpose is a term used in contract law meaning 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. C) Law of large numbers Which of the following does a producer NOT have a fiduciary responsibility to? 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. the contract must be aleatory Only the insured pays the premium A provision that allows a policyowner to withdraw a policys cash value interest free is a(n), The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT, All of these are valid options for an Adjustable Life Policy EXCEPT, The policys premium can be increased or decreased, An insurers claim settlement practices are regulated by the. C) fiduciary trust An insurance applicant with a below-average likelihood of loss is typically considered to be a. Only the insured is legally bound, 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 Coverage decreases automatically Coverage increases automatically Coverage remains as long as proof of insurability is provided Coverage is eliminated, Joe has a life insurance policy that has a face amount of $300,000. Which of the following statements is TRUE? A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? A) there is the potential for an unequal exchange of value Which of the following best describes the MIB? A) Express How do insurers predict the increase of individual risks? How could a company manager use a process cost summary to determine if the program to reduce water usage is successful?
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