C) The insured and the insurer contribute equally to the contract. It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. A) Express authority B) Equal consideration is required between the involved parties A) Competent parties The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. A) Parties involved must be competent D) collateral, Express power given to an agent in an agency agreement is An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them? 0 Answers/Comments. Which of the following is a TRUE statement? D) Principal Capacity, A unilateral contract is one in which 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? ______ is NOT an element of a valid contract. D) Legal Purpose, Which of the following is present when an applicant stands to lose value if the insured dies? How often must the Commissioner examine each domestic insurance company? Nothing $100,000 $250,000 $500,000, Which type of life insurance is normally associated with a Payor Benefit rider? Which of these statements regarding the annuitant is CORRECT? D) Terminate the agent, Insurable interest does NOT occur in which of the following relationships? C) Law of Agency 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? After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. She would like to borrow $15,000 against the cash value. The death benefit would be. How could a company manager use a process cost summary to determine if the program to reduce water usage is successful? What is the advantage of adding this rider? voidable A conditional contract, also called a hypothetical contract, is a contract agreement that only requires performance once the delineated conditions are met. promises made Under the McCarran-Ferguson Act, what is the minimum penalty for this? A) the appearance of authority an insurer gives to its agent D. $2,863. Who assumes the investment risk with a fixed annuity contract? 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. Which of the following is NOT considered rebating? Business partners 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"? This legal agreement requires prior performance of another agreement or clause in order to be enforceable. 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 The present cash value of the policy equals $250,000. If xxx actually turns out to be 131313, what do you think of the claim? 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. One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. Shirley has a $500,000 10-year-non-renewable level term life policy. Under a life insurance policy, what does the insuring clause state? A) there is an element of chance and potential for unequal exchange of value or consideration for both parties Whole life policy that pays out its cash value over a 20 year period Whole life policy with premiums paid up after 20 years Term life policy that returns cash value after 20 years Term life policy with premiums paid up after 20 years, Which type of multiple protection policy pays on the death of the last person? C) consideration Because of this, an insurance contract is considered Which of the following is the best descriptive word? (C) Both parties exchange goods of equal value. C) A contract where one party "adheres" to the terms of the contract A non-contributory health insurance plan helps the insurer avoid. contain an offer and acceptance, In an insurance contract, the insurer is the only party legally obligated to perform. 2003-2023 Chegg Inc. All rights reserved. Describe the structure. The policies continue in force with no change. Offering payment of approved claims within 30 days after affirming liability. A) offer and acceptance 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. Corporations, like all firms, can raise money by borrowing from banks and other lending institutions. 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 these statements is true? If the other agreement or condition is performed, then the conditional contract is . Sister and brother underwriter, Life Insurance Policies - Provisions, Options, Fundamentals of Financial Management, Concise Edition, Micro Oneliners: Urinary Tract Infections (UT. Food C. Plant D. Zucchini. Which statement is CORRECT when describing a contract of adhesion? The present cash value of the policy equals $250,000. C) the authority to represent the insurer C) there must be legal reasons for entering into the contract B) only one party (the insurer) makes any kind of legally enforceable promise How soon can the benefit payments begin with a deferred annuity? 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? ______ is NOT an element of a valid contract. Which of the following is true of the law of contracts? What is the meaning of par value of stock with respect to the corporate form of organization? What does the Group Life underwriting risk selection process help protect insurance companies from? Expert answered| selymi |Points 23307|. The terms of the policy typically outline these conditions . 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? Waiver of premium Juvenile waiver Guaranteed insurability Payor benefit, Which of the following is a reinstatement condition? Authority given in writing to an agent in 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 Authority given to handle claims and process payments Authority given to an agent to act outside the scope of the agency agreement, The authority granted to a licensed producer is provided via the producer's apparent authority written contract Law of Agency Principal Capacity, Insurable interest does NOT occur in which of the following relationships? 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. An unintentional violation of Utah insurance law could lead a producer to a fine of up to _____ per violation. 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. B) Unequal consideration Which of the following does a producer NOT have a fiduciary responsibility to? What guarantees that the statements supplied by an insurance applicant are true? B. D) Offer and acceptance must be involved, B) Equal consideration is required between the involved parties, A contract requires The face amount and policy premium are not affected by the payment Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal illness There may be a dollar limit on the maximum benefit The benefit can be offered as a rider at a specific extra cost or may be at no cost, Which of the following is NOT part of an insurance contract? C) Authority given to handle claims and process payments express, ______ is NOT an element of a valid contract. What does the word level in Level Term describe? Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? Who prosecutes crimes that involve the violation of insurance laws that fall under US Code 1033? Bob dies 12 months later. 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 implied authority 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. For a trip to the hospital, Evan Appleton paid $1,656 in hospital charges, a$750 insurance deductible, and a $457 co-payment. Increasing Term Life policy Nonparticipating policy Modified Whole Life policy Universal Life policy, What is the automatic continuance of insurance coverage referred to as? C) statements made in the application and the premium 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"? 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. Consideration The policy automatically converts to whole life after the 10-year period The face amount will remain constant and the premium will increase over the 10-year period The premium will remain constant and the face amount will increase over the 10-year period The face amount and premium will remain constant over the 10-year period, will no longer provide insurance protection, Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. C) Indemnity contract Which of these features are held exclusively by variable universal life insurance? there must be an offer and acceptance Adjustable universal life policy Flexible universal life policy Variable universal life policy Modified universal life policy, Jonas is a whole life insurance policyowner and would like to add coverage for his two children. B) Contract of adhesion 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. collateral, What is implied authority defined as? An example of an unfair claims settlement practice is, Turning down a claim without providing the basis of denial. issuance of the policy C) Insurable interest B) A contract that has the potential for the unequal exchange of consideration for both parties. C) Bob's spouse Which of the following would be a valid reason why a policy premium would be higher than the standard premium? Sharing commissions with a producer licensed in the same line of business. How do marketers use insights regarding the self-concept? guarantee A) voidable If thats the case, you dont have to worry anymore. C) Competent parties With a life insurance contract, the insurer binds itself to pay a certain sum upon the death of the insured. 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. A) insured Insurers must maintain files of all documents used for solicitation for ____ year(s) after the last authorizes date of use. C) Charge more premium At what point may a producer sell insurance for an insurer? C.$2,113 Only the insurer is legally bound 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. What are an applicants statements concerning occupation, hobbies, and personal health history regarded as? Which option was chosen? Competent parties 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. If the consumer price index had gone up 4%, how much may Ron increase the face value of the policy? All of the following are examples of a Business Continuation Plan EXCEPT. Rob recently died at age 60. 2 See answers 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? C) Apparent authority legal reserve, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? When does a life insurance policy typically become effective? C) the contract has been prepared by one party (the insurance company) with no negotiation between the applicant and the insurer D) legal reserve, In an insurance contract, the element that shows each party is giving something of value is called Because you're already amazing. In this situation, who will receive Bob's policy proceeds? The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. A) there is the potential for an unequal exchange of value The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? aleatory B) errors and omissions implied 3. Which of the following statements is true? C) fiduciary trust When the term insurance expires. 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? The authority granted to a licensed producer is provided via the Question and answer. 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? How often must an insurance producers license in Utah be renewed? Q. What is the name of the provision which states that a copy of the application must be attached to the policy when issued? This is also known as a non-negotiable insurance contract, or an automatic contract. I hope you got the correct answer to your question. Identify the type of financing (stock or bond) that best answers the question. B) Implied authority The two major actions required for a policyowner to comply with the Reinstatement Clause are, Provide evidence of insurability, pay past due premiums, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as. Which Of The Following Statements About Personal Selling Is Correct? warranty Rob recently died at age 60. Because of this, an insurance contract is considered written contract C) apparent authority 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 Only the insured can change the provisions Please check below to know the answer.