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 Write a summary of the main ideas. 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 be filed with the state Identify the type of financing (stock or bond) that best answers the question. The death benefit would be $250,000 $750,000 $375,000 $500,000, What does the word "level" in Level Term describe? c. income earned by Pat's spouse. D) only when determined by a judge, Xcel Chapter 3 Legal Concepts of the Insuranc, Chapter 3 Exam - Legal Concepts of the Insura, Chapter 4 Exam - Life Insurance - Types of Po, 4 - (Questions) Life Insurance Policies - Pro, Chapter 5: Life Insurance Premiums, Proceeds,, Chapter 4: Type of Insurance Policies Part 1, Chapter 4: Policy Provisions, Options and Rid, Calculus for Business, Economics, Life Sciences and Social Sciences, Karl E. Byleen, Michael R. Ziegler, Michae Ziegler, Raymond A. Barnett, Fundamentals of Engineering Economic Analysis, David Besanko, Mark Shanley, Scott Schaefer, The Cultural Landscape: An Introduction to Human Geography, AP Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Unit 7 AP Env. 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. discreet apparent implied express, Bob and Tom start a business. Which of the following is a TRUE statement? How soon can the benefit payments begin with a deferred annuity? Restoring an insured to the same condition as before a loss is an example of the principle of. D) A contract where only one party makes any kind of enforceable contract, Answer:A) A contract that requires certain conditions or acts by the insured individual. C) Implied Which of the following is a requirement to attain an Utah resident producer license? Both partners are still married at the time of Bob's death. 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? C) A contract where one party "adheres" to the terms of the contract there is the potential for an unequal exchange of value Advertisement. Premiums paid plus interest earned is returned to the beneficiary. 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. Term, whole, and universal life insurance. C.$2,113 It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. C) The insured and the insurer contribute equally to the contract. 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 Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. Which of these statements regarding the annuitant is CORRECT? Please check below to know the answer. What types of life insurance are normally used for key employee indemnification? 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. Q. What is created after policy proceeds are obtained in a lump sum and then immediately invested? Which of the following BEST describes a conditional insurance contract? Which of the following is the best descriptive word? A life insurance policy that is subject to a contract interest rate is referred to as. producer's apparent authority B) errors and omissions If the other agreement or condition is performed, then the conditional contract is . B) the insurer's obligations are dependent upon certain acts of the insured individual In this situation, who will receive Bob's policy proceeds? In the case of an insurance contract, the contracting parties are the claimant and the insurer. In this situation, who will receive Bob's policy proceeds? C) apparent authority 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) NAIC Which of the following best describes the MIB? Shirley has a $500,000 10-year-non-renewable level term life policy. Implied Which of the following BEST describes a conditional insurance contract? B) Law of adhesion An insurer exaggerating its dividends in a magazine advertisement. Use the binomial distribution to find P(x13)P(x \leq 13)P(x13) if the stain removal product's claim is correct. C) adhesion What is the purpose for having an accelerated death benefit on a life insurance policy? weegy. A contract that requires certain conditions or acts by the insured individual. Which of the following Best Describes a Conditional Insurance Contract Posted on April 19, 2022 by Ephori London To be enforceable, a contract must be concluded by the competent parties. Law of Agency C) fiduciary trust Sorry, you have Javascript Disabled! Sharing commissions with a producer licensed in the same line of business. AzAnswer team is here with the right answer to your question. Only the insured can change the provisions 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)? A) Sue the insured C) Legal purpose His insurance agent told him the policy would be paid up if he reached age 100. The gap between the total death benefit and the policys cash value. Your email address will not be published. The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement? performance is conditioned upon a future occurrence. B) implied authority Adjustable life policy Modified life policy Endowment policy Universal life policy, How are survivorship life insurance policies helpful in estate planning? D) conditions, The authority granted to a licensed producer is provided via the Which of the following products would allow him to accomplish this? D) Countersignature, 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 B) Contract of adhesion The above question Which of the following BEST describes a conditional insurance contract?, Was part of Insurance MCQs & Answers. D) Terminate the agent, Insurable interest does NOT occur in which of the following relationships? a) a conditional acceptance allows the parties to negotiate the definite terms of the contract upon the completion of the contract. Apparent D) imposed authority, What makes an insurance policy a unilateral contract? 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 contract that requires certain conditions or acts by the insured individual. $2,406 Which option was chosen? 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? 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? (B) Both parties adhere to the contract. Increasing Term Life policy Nonparticipating policy Modified Whole Life policy Universal Life policy, What is the automatic continuance of insurance coverage referred to as? B) producer aleatory Which of these features are held exclusively by variable universal life insurance? A) Tom's spouse Policyowner has the right to select the investment which will provide the greatest return. there must be legal reasons for entering into the contract A) fiduciary bond D) Tom, The deeds and actions of a producer indicate what kind of authority? With a life insurance contract, the insurer binds itself to pay a certain sum upon the death of the insured. B) A contract that has the potential for the unequal exchange of consideration for both parties Term Straight Life Endowment Variable Life, A life insurance policy that has premiums fully paid up within a stated time period is called stated payment insurance limited universal insurance stated modified insurance limited payment insurance, Reggie purchased a life insurance policy with a face amount of $500,000. An insurance applicant with a below-average likelihood of loss is typically considered to be a. A) Sister and brother 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. The authority granted to a licensed producer is provided via the Variable life insurance and Universal life insurance are very similar. Which of the following best describe the term definition. This legal agreement requires prior performance of another agreement or clause in order to be enforceable. It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. 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? What Benefit Does The Payor Clause On A Juvenile Life Policy Provide? A) offer 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? The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? C) Contract must have a legal purpose The policies continue in force with no change. What is a corridor in relation to a Universal Life insurance policy? B) Bob's estate The period of coverage The face amount The premium payments The cash value, at a predetermined date or age, regardless of the insured's health, A Renewable Term Life insurance policy can be renewed at a predetermined date or age, regardless of the insured's health only if the insured provides evidence of insurability anytime at the policyowner's request typically with no change in premium, Pre-death distributions will become taxable, Under a Modified Endowment Contract, what are the likely tax consequences? 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 The most appropriate description ascribed to the meaning of definition from the options given is ; A precise statement of the qualities of an idea, object or process. C) Only the insurer is legally bound A paid premium A) offer and acceptance Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? fichoh. 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? Zucchini is the best descriptive word. In which form of corporate financing is the investor also an owner? In most cases, the insured is. B) conditional 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? What does the Group Life underwriting risk selection process help protect insurance companies from? 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) Parties involved must be competent A) definitions In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. Expert answered| selymi |Points 23307|. Describe the structure. Of the following dividend options, which of these is taxable? 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? Because of this, an insurance contract is considered A contract that requires certain conditions or acts by the insured individual Which of these is considered to be a Living Benefit option in a life insurance policy? A) warranty A) there is an element of chance and potential for unequal exchange of value or consideration for both parties 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. Which of the following would be an act of Unfair Discrimination by an insurer? Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? Accelerated death benefit rider Waiver of premium rider Extended term option Decreasing term insurance. insurer For a trip to the hospital, Evan Appleton paid $1,656 in hospital charges, a$750 insurance deductible, and a $457 co-payment. Eventually, they retire and dissolve the business. be signed and witnessed by an attorney underwriter, Life Insurance Policies - Provisions, Options, Fundamentals of Financial Management, Concise Edition, Micro Oneliners: Urinary Tract Infections (UT. the terms must be accepted or rejected in full Conditional, Under a contract of adhesion, A) insured D) collateral, Express power given to an agent in an agency agreement is Consideration 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 Conditional Insurance Contract 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 When the term insurance expires. D) Principal Capacity, A unilateral contract is one in which 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. Dorian exercises a nonforfeiture option by using his life policys cash value to purchase an extended term insurance option. A) Authority given in writing to an agent in the agency agreement C) A contract where one party "adheres" to the terms of the contract. Which of these legislation Acts is designed to protect consumers with guidelines regarding credit reporting and distribution? Which of these statements is true? the contract must be a contract of adhesion, there must be legal reasons for entering into the contract, What makes an insurance policy a unilateral contract? C) Insurable interest Competent parties Offer and acceptance Consideration Legal purpose, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? Which Of The Following Best Describes A Conditional Insurance Contract, 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) A contract where only one party makes any kind of enforceable contract. legal reserve, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? Risk reduction Risk transference Risk avoidance Risk retention, The cause of a loss is referred to as a(n) hazard adversity peril risk, How do insurers predict the increase of individual risks? ______ is NOT an element of a valid contract. Death benefits Cash value Loading costs Separate account investments, Which policy feature makes a universal life policy different from a whole life policy? Events are those which cannot be controlled by either . If the consumer price index had gone up 4%, how much may Ron increase the face value of the policy? B) the unwritten authority that the agent is assumed to have D) Business owner and business client, Under a contract of adhesion, 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. An applicants character and personal habits can be obtained for underwriting purposes from which source? Typically, bilateral contracts involve an equal obligation or. conditions, Legal purpose is a term used in contract law meaning Orissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of the following statements correctly describes a contract of indemnity? Loans obtained by a policyowner against the cash value of a life insurance policy. This rider is called a(n). B) acceptance be in writing Anheuser-Busch InBev is trying to reduce its water usage. How many days is a temporary producers license valid? Authority given in writing to an agent in the agency agreement representation 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 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. 2003-2023 Chegg Inc. All rights reserved. B) only an offer C) Apparent authority 2. Adjustable life insurance Decreasing term insurance Increasing term insurance Modified life insurance, A spouse and child can be added to the primary insured's coverage as what kind of rider? Which of the following BEST describes a conditional insurance contract. offer Because you're already amazing. 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 does the word level in Level Term describe? D) both the policyowner and the insurer must know all material facts and relevant information, B) only one party (the insurer) makes any kind of legally enforceable promise, Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) D) unilateral, Who is responsible for assembling the policy forms for insureds? both parties consent to the contract. A) express authority Bob and Tom start a business. Waiver of premium Juvenile waiver Guaranteed insurability Payor benefit, Which of the following is a reinstatement condition? Lisa has recently bought a fixed annuity. 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) Unilateral contract C) A contract where one party adheres to the terms of the contract D) Offer and acceptance must be involved, B) Equal consideration is required between the involved parties, A contract requires imposed authority, In an insurance contract, the element that shows each party is giving something of value is called A) Unilateral Peril Hazard Loss factor Liability, Which of these techniques will remove the risk of losing money in the stock market by never purchasing stocks? What would happen if a life insurance applicant is given a conditional receipt? Which contract element is insurable interest a component of? The present cash value of the policy equals $250,000. When handling premiums for an insured, an agent is acting in which capacity? a. medical expenses covered under Pat's employer-sponsored group health insurance. A unilateral contract is one in which only one party makes a legally binding guarantee. Which of these statements is true? It is a government agency that collects medical information on the insured from the insurance companies C. It is a member organization that protects against insolvent insurers D. A) estoppel Which of these is considered to be a Living Benefit option in a life insurance policy? renewal reinstatement resumption renovation, the MEC tends to be an investment vehicle, Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because the MEC has tax deductible premiums the MEC is considered an illegal product the MEC tends to be an investment vehicle the MEC does not accumulate cash value, The face amount and premium will remain constant over the 10-year period, Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. 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 B) Indemnity How could a company manager use a process cost summary to determine if the program to reduce water usage is successful? 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. The terms of the policy typically outline these conditions . Bob dies 12 months later. Question and answer. A) there is the potential for an unequal exchange of value B) written contract Provide an opinion. Contestability clause, In order for a contract to be valid, it must 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? Which of the following BEST describes a conditional insurance contract? issuance of the policy Consideration clause Period of time after the initial premium is paid and before the policy is issued Period of time it takes for a policy's underwriting to complete Period of time after a policy is issued and before it is delivered to policyowner Period of time after the premium is due but the policy remains in force, Life insurance policies will normally pay for losses arising from commercial aviation war suicide hazardous jobs, A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? Pay owns a 20-pay life policy with a paid-up dividend option. 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? Legal Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies? Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on Ken? Within how many days must a licensee notify the Commissioner of a change in address? The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed in Ken? The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. c) a contract must be in writing. Which type of multiple protection policy pays on the death of the last person? 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? d) an agreement requires a definite offer and an indefinite acceptance. Policy loans are disallowed The premium payments will be tax deductible Pre-death distributions are typically taxable Withdrawals will be prohibited, When a whole life policy is surrendered, income taxes may be owed, All of these statements concerning whole life insurance are false EXCEPT Policyowner can take out a policy loan up to the face amount When a whole life policy is surrendered, income taxes may be owed Coverage is normally temporary The death benefit is not affected by outstanding loans, A life insurance policy which contains cash values that vary according to its investment performance of stocks is called Increasing Term Life Modified Whole Life Variable Whole Life Adjustable Whole Life, Which of these riders will pay a death benefit if the insured's spouse dies? Offering payment of approved claims within 30 days after affirming liability. definitions D) misrepresentation, Which of the following is NOT required in the content of a policy? 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? 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? 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 This is also known as a non-negotiable insurance contract, or an automatic contract. 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