Colorado Life Exam Q&A

Which of these describe a participating life insurance policy? - Answer- Policy owners are entitle to receive dividends The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to it's policyholders is called: - Answer- Reserves Which of the following requires insurers to disclose when an applicants consumer or credit history is being investigated: - Answer- 1970 - Fair Credit Reporting Act What year was the McCarran-Ferguson Act enacted? - Answer- 1945 A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of it's members is known as: - Answer- A fraternal benefit society Which of these is considered a statement that is assured to be true in every respect? - Answer- Warranty Life and health insurance policies are: - Answer- Unilateral contracts Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called: - Answer- Representations Which of the following consists of an offer, acceptance, and consideration? - Answer- Contract Who makes the legally enforceable promises in a unilateral insurance policy? - Answer- Insurance Company What is the consideration given by an insurer in the Consideration clause of a life policy? - Answer- Promise to pay a death benefit to a named beneficiary At what point does an informal contract become binding? - Answer- When one party makes an offer and the other party accepts that offer When must insurable interest be present in order for a life insurance policy to be valid? - Answer- When the application is made Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? - Answer- Legal Purpose (Insurable Interest) All of the following are considered to be typical characteristics describing the nature of an insurance contract: - Answer- Unilateral, Aleatory, and Adhesion