2026 MN LIFE AND HEALTH UPDATED
QUESTIONS AND ANSWERS SURE A+
✔✔Methods of Managing risk - ✔✔Avoidance: avoiding a particular activity that could
turn into a loss
Reduction: taking action to reduce the possibility of a loss
Retention: the insured accepts possibility of loss and assumes part of risk, (a deductible
is a form of retention)
Transfer: Shifting financial burden to one another
Sharing: chance of loss is shared among individuals (Pooling)
✔✔Indemnity - ✔✔-restoring the insured to approx. the same position before there was
a loss
- actual cash value= replacement-depreciation
- common exceptions
replacement cost: reimburses insured for damaged or destroyed property w/o
subtraction depreciation
valued policy: pays face amount of total loss regardless of actual cash value
pro -rata-bility: insurer will pay proportional share of loss
✔✔Primary & excess indemnity - ✔✔primary insurer pays first, then once exhausted,
the excess insurer pays too
, ✔✔Coordination of benefits - ✔✔provisions apply when more than one group health
insurance policy covers the same loss
✔✔Insurable interest - ✔✔property casualty: at time of loss
life & health: at time of application
✔✔Subrogation - ✔✔gives insurer the right to collect from a negligent 3rd party after
taking a loss payment to insurer (prevents from collecting twice )
✔✔Utmost Good faith - ✔✔representation:
statements made on application that are entirely true
misrepresentation:
incorrect statements in application that don't affect insurability
material misrepresentation:
incorrect statements in application that involve info used to make underwriting
decisions (usually void coverage)
concealment:
intentionally hiding info (fraud)
Warranty:
statements that must be true at time of loss, not obligated to pay claim if breached
✔✔Consideration (legal contract) - ✔✔an exchange of value between the parties to the
contract (payment of prem)
insurer: promise to provide indemnity in event of loss
insured's: pay prems & have truthful representations
✔✔Unique features of contract - ✔✔- unilateral: only 1 party makes a legally
enforceabble promise
- contract of adhesion: insured must accept contract as is.
- aleatory contract: an unequal value is exchanged between the parties (prem vs
coverage)
- conditional contract: contract may be voided if policy conditions aren't met
✔✔Declarations - ✔✔Property & casulty
-period of coverage
-policy limits
- premium
life & health insurance
- parties to contract
- policy limit
- age of insured at issued date
✔✔Insuring agreement - ✔✔-Named peril: policies only cover losses from perils that are
specifically listed in policy
- open peril: policies cover all losses except those listed in the policy
QUESTIONS AND ANSWERS SURE A+
✔✔Methods of Managing risk - ✔✔Avoidance: avoiding a particular activity that could
turn into a loss
Reduction: taking action to reduce the possibility of a loss
Retention: the insured accepts possibility of loss and assumes part of risk, (a deductible
is a form of retention)
Transfer: Shifting financial burden to one another
Sharing: chance of loss is shared among individuals (Pooling)
✔✔Indemnity - ✔✔-restoring the insured to approx. the same position before there was
a loss
- actual cash value= replacement-depreciation
- common exceptions
replacement cost: reimburses insured for damaged or destroyed property w/o
subtraction depreciation
valued policy: pays face amount of total loss regardless of actual cash value
pro -rata-bility: insurer will pay proportional share of loss
✔✔Primary & excess indemnity - ✔✔primary insurer pays first, then once exhausted,
the excess insurer pays too
, ✔✔Coordination of benefits - ✔✔provisions apply when more than one group health
insurance policy covers the same loss
✔✔Insurable interest - ✔✔property casualty: at time of loss
life & health: at time of application
✔✔Subrogation - ✔✔gives insurer the right to collect from a negligent 3rd party after
taking a loss payment to insurer (prevents from collecting twice )
✔✔Utmost Good faith - ✔✔representation:
statements made on application that are entirely true
misrepresentation:
incorrect statements in application that don't affect insurability
material misrepresentation:
incorrect statements in application that involve info used to make underwriting
decisions (usually void coverage)
concealment:
intentionally hiding info (fraud)
Warranty:
statements that must be true at time of loss, not obligated to pay claim if breached
✔✔Consideration (legal contract) - ✔✔an exchange of value between the parties to the
contract (payment of prem)
insurer: promise to provide indemnity in event of loss
insured's: pay prems & have truthful representations
✔✔Unique features of contract - ✔✔- unilateral: only 1 party makes a legally
enforceabble promise
- contract of adhesion: insured must accept contract as is.
- aleatory contract: an unequal value is exchanged between the parties (prem vs
coverage)
- conditional contract: contract may be voided if policy conditions aren't met
✔✔Declarations - ✔✔Property & casulty
-period of coverage
-policy limits
- premium
life & health insurance
- parties to contract
- policy limit
- age of insured at issued date
✔✔Insuring agreement - ✔✔-Named peril: policies only cover losses from perils that are
specifically listed in policy
- open peril: policies cover all losses except those listed in the policy
