(D) Only one party is legally bound to the contract. Sharon is the policyowner of a $500,000 life insurance policy. Plot this function and determine if she is ready to attempt the Bluenose Marathon. 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? Insurance contracts are unilateral contracts. B) the unwritten authority that the agent is assumed to have Which of these would NOT be an unfair claims practice? 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? If she dies 15 years after the policys inception date, how much will her beneficiary receive? D) Competent parties, Which of the following BEST describes a conditional insurance contract? After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. The face amount and premium will remain constant over the 10-year period. Which of these statements regarding the annuitant is CORRECT? Offering payment of approved claims within 30 days after affirming liability. Intent, The deeds and actions of a producer indicate what kind of authority? If the insured dies at any time during the 5 years, his beneficiary will receive the policy's face value. 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? An example of an unfair claims settlement practice is, Turning down a claim without providing the basis of denial. 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 insurer assuming the risk is called the mutual insurer reinsurer reciprocal insurer participating insurer, Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. producer D) Business owner and business client, Under a contract of adhesion, 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. conditional Which of the following would be a valid reason why a policy premium would be higher than the standard premium? Lisa has recently bought a fixed annuity. B) Apparent It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. voidable C) A contract where one party "adheres" to the terms of the contract. The amount of his disability income payments for an on-the-job injury may be reduced by. 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. D) conditions, The authority granted to a licensed producer is provided via the the contract must be aleatory D) Utmost good faith, What does the insurance term "indemnity" refer to? 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 express, ______ is NOT an element of a valid contract. C) Aleatory Which of these statements is true? 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. $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? 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? the contract is voidable upon proof of fraud. This is also known as a non-negotiable insurance contract, or an automatic contract. What does a life insurance policy guarantee to the stated beneficiary upon the death of the insured? In most insurance policies, the insurer is the only one who makes a legally binding promise to pay insured claims. a) a conditional acceptance allows the parties to negotiate the definite terms of the contract upon the completion of the contract. c) a contract must be in writing. a. medical expenses covered under Pat's employer-sponsored group health insurance. An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. Multiple-choice. 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. What is the difference between insurance condition and warranty? It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. C) statements made in the application and the premium GENERAL LAW OF CONTRACTS A contract is an agreement enforceable by law. C) claim forms 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? Policyowner may increase or decrease the premium payments Policyowner may increase or decrease the face amount Policyowner can contribute large sums of money Policyowner has the right to select the investment which will provide the greatest return, All of the following riders can increase the death benefit amount EXCEPT Cost of Living Waiver of Premium Accidental Death Rider Guaranteed Insurability, Which of these is NOT considered to be a common life insurance nonforfeiture option? 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 contract where only one party makes any kind of enforceable contract, statements made in the application and the premium, In a life or health insurance contract, "consideration" would be the offer and acceptance premium only statements made in the application and the premium statements made in the application only, 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 underwriting issuance of the policy promises made legal reserve, All of the following are elements of an insurance policy EXCEPT definitions other insurance claim forms conditions, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as Apparent Estoppel Aleatory Unilateral, Which of the following is an example of the insured's consideration? b. benefits paid under workers compensation. Updated 10/6/2017 9:10:03 AM. 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? Which of these factors is NOT taken into account when determining an applicants life insurance needs? The annuitants life expectancy determines the annuity payments, No one may be denied coverage by an insurance company due to, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n). be signed and witnessed by an attorney Insurer's promise to pay benefits ______ is NOT an element of a valid contract. Before using an assumed name in Utah, a producer MUST, Maria would like an annuity that provides a guaranteed accumulation or payout. 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. Which type of life insurance policy is this? Which statement is CORRECT when describing a contract of adhesion? 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. A) Express authority Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them? The present cash value of the policy equals $250,000. Contestability clause, In order for a contract to be valid, it must Under the McCarran-Ferguson Act, what is the minimum penalty for this? 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. The policies continue in force with no change. Science Study Guide Questions. Because of this, an insurance contract is considered voidable conditional aleatory unilateral, Who is responsible for assembling the policy forms for insureds? A) A contract that requires certain conditions or acts by the insured individual. Legal C) Bob's spouse The terms of the policy typically outline these conditions . A marathon is 42.2 kilometers. A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? C) at the time of death Express Apparent Implied Conditional, The type of multiple protection coverage that pays on the death of the last person is called a(n) joint life policy survivorship life policy annuity joint policy dual life policy, A nonforfeiture option can be used to increase the death benefit, All of these are valid options for an Adjustable Life Policy EXCEPT The policy's premium can be increased or decreased The policy's death benefit can be increased or decreased A nonforfeiture option can be used to increase the death benefit The policy's protection period can be modified, A life insurance contract which accumulates cash values higher than the IRS will allow, 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 prior to age 65 are subject to a 10% penalty, An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. 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. Use the binomial distribution to find P(x13)P(x \leq 13)P(x13) if the stain removal product's claim is correct. C) Only the insurer is legally bound C.$2,113 Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident? D) Insurance producers, If a material warranty violation on the part of the insured is found, what recourse does an insurer have? When handling premiums for an insured, an agent is acting in which capacity? I hope you got the correct answer to your question. Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value, Which type of policy combines the flexibility of a universal life policy with investment choices? The policies continue in force with no change. 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? Accelerated death benefit An example of an unfair claims practice would be His insurance agent told him the policy would be paid up if he reached age 100. C) Contract must have a legal purpose The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? If the annuitant dies before the annuity start date, The premiums paid plus interest earned will be given to the beneficiary, Anyone who makes a fraudulent statement on an insurance application in order to obtain benefits from an insurance company. Determine which insurer offers the best rates Determine which insurer offers the best policies Determine financial strength of an insurance company Determine which agent to use locally, A nonparticipating policy will provide a return of premium provide tax advantages not pay dividends give policyowners special privileges, A rating from a rating service company, such as A.M. Best, Which of the following is NOT considered advertising? Definition refers to a description which is given to a word, idea or phenomenon . Law of Agency In this situation, who will receive Bob's policy proceeds? Which of the following BEST describes a conditional insurance contract? The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? Eventually, they retire and dissolve the business. In exchange, the policyowner pays premiums. A) Parties involved must be competent Consideration 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? Advertisement. 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) Insurers must maintain files of all documents used for solicitation for ____ year(s) after the last authorizes date of use.