When the principal gives the agent authority in writing, its referred to as, The terms must be accepted or rejected in full. 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? Principal Capacity, All of the following are elements of an insurance policy EXCEPT Which of these is considered to be a Living Benefit option in a life insurance policy? Barry offers Chris his mountain cabin for the weekend to secure his order for his insurance business. Of the following dividend options, which of these is taxable? the insurer's obligations are dependent upon certain acts of the insured individual B) errors and omissions A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification? C) insurer C) at the time of death Which of the following BEST describes a conditional insurance contract? B) Law of adhesion A(n) ________ investigates, negotiates, and settles claims for a few on behalf of an insurance company. An insurance contract usually involves an exchange of consideration between both parties: the insurer agrees to provide coverage and pay claims in the event of a loss, and the policyholder agrees to pay premiums in return. It allows for a spouse to be added as a rider to a life insurance policy It allows for policy loans to be advanced to the insured in the event of unemployment It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill It allows for a third party to purchase a life insurance policy at a discounted rate and immediately advance a portion of the death benefit, All of these are standard exclusions found in a life insurance policy EXCEPT hazardous occupations aviation disability war, Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue? Which of the following is the best descriptive word? warranty guarantee representation collateral, there must be legal reasons for entering into the contract, Legal purpose is a term used in contract law meaning there must be an offer and acceptance the contract must be aleatory there must be legal reasons for entering into the contract the contract must be a contract of adhesion, In an insurance contract, the element that shows each party is giving something of value is called offer acceptance consideration purpose, What makes an insurance policy a unilateral contract? D) Principal Capacity, A unilateral contract is one in which Are you looking for the correct answer to the question Which of the following BEST describes a conditional insurance contract?? Legal 3. 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. the terms must be accepted or rejected in full D) Intent, Which contract element is insurable interest a component of? A) underwriting A) Unilateral contract Connect with others, with spontaneous photos and videos, and random live-streaming. Insurable interest can be based on the love and affection of individuals related by blood or law An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of All of the following are examples of pure risk EXCEPT. D) Insurance producers, If a material warranty violation on the part of the insured is found, what recourse does an insurer have? A) Sue the insured B) only one party (the insurer) makes any kind of legally enforceable promise Sharing commissions with a producer licensed in the same line of business. definitions An example of an unfair claims settlement practice is, Turning down a claim without providing the basis of denial. Both partners are still married at the time of Bob's death. B) issuance of the policy B) Indemnity Q. A) producer's apparent authority producer's apparent authority A) Insurable interest Preferred risk policies with reduced premiums are issued by insurance companies because the insured has, Better than average mortality or morbidity experience. In this situation, who will receive Bob's policy proceeds? Log in for more information. Guaranteed Insurability rider Family term insurance rider Family whole insurance rider Payor benefit rider, A partial surrender is allowed in which of the following life policies? A new stain removal product claims to completely remove the stains on 909090 percent of all stained garments. B) A contract that has the potential for the unequal exchange of consideration for both parties It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. GENERAL LAW OF CONTRACTS A contract is an agreement enforceable by law. What was his total bill? Bob dies 12 months later. Authority given to handle claims and process payments Sister and brother Parent and children Business partners Business owner and business client, The deeds and actions of a producer indicate what kind of authority? B) Only the insured can change the provisions What is the purpose for having an accelerated death benefit on a life insurance policy? A) there is an element of chance and potential for unequal exchange of value or consideration for both parties In most insurance policies, the insurer is the only one who makes a legally binding promise to pay insured claims. A) Contract may be accepted or rejected by the insured, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as. Only the insured pays the premium Which of the following is an annuity that is linked to a market-related index? Bob and Tom start a business. 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 D. $2,863. She would like to borrow $15,000 against the cash value. Which of the following BEST describes a conditional insurance contract? Provide funds to help fund retirement Provide funds to help pay taxes Provide funds for funeral expenses Provide tax deductions for premium payments, lower than the typical whole life policy during the first few years and then higher than typical for the remainder, The premium for a Modified whole life policy is higher than the typical whole life policy during the first few years and then lower than typical for the remainder lower than the typical whole life policy during the first few years and then higher than typical for the remainder normally graded over a period of 20 years level for the first 5 years then decreases for the remainder of the policy, The type of policy which pays on the death of the last person is called joint life survivorship life dual life shared life, A life insurance policy that is subject to a contract interest rate is referred to as adjustable life group life term life universal life, a policy that is paid up after only one payment, A single premium cash value policy can be described as a policy that is paid up after only one payment a policy that only requires an annual payment a policy that is guaranteed issue a policy that covers two or more lives, A limited payment whole life policy provides protection for 20 years lifetime protection protection for more than one person discounted premiums, A policyowner may change two policy features on what type of life insurance? the contract must be aleatory D) A contract where only one party makes any kind of enforceable contract, A) A contract that requires certain conditions or acts by the insured individual, All of the following are elements of an insurance policy EXCEPT A) Make whole Reduction of premium One year term Paid-up additions Accumulation at interest, All of these are valid policy dividend options for a life insurance policyowner EXCEPT cash outlay to the policyowner accumulate without interest reduction in policy premium buy additional insurance coverage, Kurt is an active duty serviceman who was recently killed in an accident while home on leave. B) the insurer's obligations are dependent upon certain acts of the insured individual Accumulation at Interest Option Cash Dividend Option Paid-Up Additions Option One-Year Term Dividend Option, The policy may be paid up early by using policy dividends, Pat owns a 20-pay life policy with a paid-up dividend option. It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill. James is the insured on a life insurance policy where his age was misstated on the application. 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? An individual who removes the risk of losing money in the stock market by never purchasing stocks is said to be engaging in. Bob dies 12 months later. An insurance contract usually involves an exchange of consideration between both parties: the insurer agrees to provide coverage and pay claims in the event of a loss, and the policyholder agrees to pay premiums in return. It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. D) misrepresentation, Which of the following is NOT required in the content of a policy? Variable life insurance and Universal life insurance are very similar. Tom's spouse Bob's estate Bob's spouse Tom, Which contract element is insurable interest a component of? C) apparent authority 30 seconds. Term, whole, and universal life insurance. Plot this function and determine if she is ready to attempt the Bluenose Marathon. What guarantees that the statements supplied by an insurance applicant are true? Which military service exclusion clause would pay upon his death? 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? Which of the following would be considered an underwriting duty of an agent? D) Conditional, Which of the following is NOT a requirement of a contract? A) Sister and brother An applicants character and personal habits can be obtained for underwriting purposes from which source? Which of the following best describes the MIB? A paid premium Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. Who assumes the investment risk with a fixed annuity contract? What types of life insurance are normally used for key employee indemnification? Typically, bilateral contracts involve an equal obligation or. Which of the following best describes a symbol. d. a deductible stated in the policy's provision. 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 C) negotiation between the involved parties 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. 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. C.$2,113 C) the authority to represent the insurer If thats the case, you dont have to worry anymore. Sorry, you have Javascript Disabled! B) A contract that has the potential for the unequal exchange of consideration for both parties A life insurance policyowner does NOT have the right to, Fixed annuities provide each of the following EXCEPT. Both partners are still married at the time of Bob's death. C) Bob's spouse they are "take it or leave it" contracts. B) the unwritten authority that the agent is assumed to have Assume that the product will be tested on 202020 randomly selected stained garments, and let xxx denote the number of these garments from which the stains will be completely removed. b. benefits paid under workers compensation. Modified Whole Life Decreasing Term Life Adjustable Life Whole Life, Decreasing term life insurance is often used to provide retirement funds provide coverage for a home mortgage accumulate cash value provide coverage for estate taxes, Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)? Insurance producer Jerry offers a $350 shopping card if they purchase an insurance product through him. Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? Sharon is the policyowner of a $500,000 life insurance policy. offer Pay owns a 20-pay life policy with a paid-up dividend option. Which of the following would be an act of Unfair Discrimination by an insurer? 2003-2023 Chegg Inc. All rights reserved. Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed in Ken? D) legal reserve, In an insurance contract, the element that shows each party is giving something of value is called The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? C) Competent parties Eventually, they retire and dissolve the business. D) errors and oversights, In an insurance contract, the insurer is the only party legally obligated to perform. A life insurance contract guarantees to the beneficiary not only a death benefit, but a payment of a sum of money in perpetuity, called a death benefit for that purpose of insurance coverage. Joint life policy Survivorship life policy Dual life policy Multiple life policy, A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called whole life group life credit life universal life, Can be converted to permanent coverage without evidence of insurability, Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider? What is this called? C) Insurance carriers It is the means by which one or more parties bind themselves to certain promises. c) a contract must be in writing. It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. A Modified Endowment Contract (MEC) is best described as A life insurance contract which accumulates cash values higher than the IRS will allow An annuity contract which was converted from a life insurance contract A modified life contract which enjoys all the tax advantages of whole life insurance A life insurance contract where all withdrawals How do insurers predict the increase of individual risks? 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. 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? D) purpose, Which principle is accurately described with the statement "Insureds are entitled to recover an amount NOT greater than the amount of their loss"? In this situation, who will receive Bob's policy proceeds? D) Tom, The deeds and actions of a producer indicate what kind of authority? Nothing $100,000 $250,000 $500,000, Which type of life insurance is normally associated with a Payor Benefit rider? weegy. The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement? A (D) Only one party is legally bound to the contract. The gap between the total death benefit and the policys cash value. B) Equal consideration is required between the involved parties C) Implied Which of the following would be a valid reason why a policy premium would be higher than the standard premium? Elizabeth is the beneficiary of a life insurance policy. Which of the following policies does NOT build cash value? C) A contract where one party adheres to the terms of the contract A) there is the potential for an unequal exchange of value Which of the following is NOT considered rebating? At what point may a producer sell insurance for an insurer? Which of the following statements about aleatory contracts is NOT true? Incontestable period Probation period Reinstatement period Grace period, The benefit can be offered as a rider at a specific extra cost or may be at no cost, Which of these is NOT a characteristic of the Accelerated Death Benefit option? A) Insurer's promise to pay benefits A) A contract that requires certain conditions or acts by the insured individual When does a life insurance policy typically become effective? 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. A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? discreet apparent implied express, Bob and Tom start a business. In this situation, who will receive Bob's policy proceeds? B) conditional B) Parent and children Conditional insurance contracts are insurance policies that require the insured person to satisfy certain conditions in order to become effective and/or to be paid out by the insurer. Use the binomial distribution to find P(x13)P(x \leq 13)P(x13) if the stain removal product's claim is correct. Notify me of follow-up comments by email. Corporations, like all firms, can raise money by borrowing from banks and other lending institutions. A) Express Which market index is normally associated with an indexed annuitys rate of return? How does life insurance create an immediate estate? What is this an example of? Eventually, they retire and dissolve the business. Insurable interest Insurance exchanges Law of large numbers and risk pooling Population table data, People with higher loss exposure have the tendency to purchase insurance more often than those at average risk. 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"? B) other insurance All of the following statements about Carl's coverage are correct. What does the word level in Level Term describe? Which of the following products would allow him to accomplish this? Express In a life or health insurance contract, "consideration" would be the, statements made in the application and the premium, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called. Zucchini is the best descriptive word. underwriter, Life Insurance Policies - Provisions, Options, Fundamentals of Financial Management, Concise Edition, Micro Oneliners: Urinary Tract Infections (UT. What is a corridor in relation to a Universal Life insurance policy? Which of these statements regarding the annuitant is CORRECT? C) Probability of loss The policy may be paid up early by using accumulated cash values The policy may be paid up early by using policy dividends The policy's premiums will increase after 20 years The policy's cash values steadily decrease after 20 years, the policy would be payable, minus the premium amount, If an insured dies during the grace period with no premiums paid the policy would be payable, minus the premium amount the policy would be payable only after the beneficiary makes past due premium payment all past premiums will be refunded with interest the claim would be denied, In what part of an insurance policy are policy benefits found?

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