WEBCE Life And Health Insurance (280 Study Questions)
With 100% Correct Verified Answers
1. Representations and Warranties
: Representations are statements the applicant makes on an application
that are deemed to be true to the applicant's best knowl- edge.
Warranties are statements the insurer makes in the contract.
2. Underwriting vs. Actuarial Departments
: Two related insurance company func- tions. Through the process of ,
applications are assessed for insurability and to assign premium rates.
The department analyzes data to
help estimate future losses and to produce rate tables.
3. Managerial System vs. General Agency System
: Two variations of the career agency system in which producers
represent a single company. One is headed by a company employee
called a general manager (GM), the other by an independent contractor
called a general agent (GA).
4. Fraternal Insurance Company
: A non-profit form of insurance provider spon- sored by an
organization of people who share a common ethnic, religious, or
,vocational affiliation.
5. Peril and Hazard
: Two related general insurance terms:
Peril is the immediate cause of a loss (and the event that is
insured against). Hazard is any condition that increases the risk of
incurring a loss.
6. Contract of adhesion
: A type of contract in which one party (the offeror) drafts the terms
that must be accepted as-is by the offeree. Insurance policies are this
type.
7. Mutual Insurance Company
: A form of insurance company that is owned by policyowners. May
distribute policy dividends (non-taxable) through participating
policies.
8. Independent Agency System
: An insurance distribution system in which the manager and
producers are fully independent and not affiliated with any single
insurer.
9. Buyer's Guide and Policy Summary
: Two related disclosure documents that are required by most states to
,be presented to life and health insurance applicants at some point
during the buying process.
10.Risk
: A basic insurance term referring to the possibility of incurring a loss
11.Law of Large Numbers
: A mathematical principle that is the basis for predicting the odds of a
loss occurring in a certain population in any given year.
12.Social Security (OASDI)
: A federal insurance program that provides disability, death, and
retirement benefits to covered workers and their qualifying
beneficiaries.
13.Agents vs. Brokers
: Two basic types of insurance producer: an
repre- sents a single insurer and a sells
policies from multiple insurers.
14.Reinsurance
: The process through which insurance companies spread large risks
among other insurers.
, 15.Domestic, Foreign, and Alien Insurers
: Insurers can be categorized by their state of domicile. There are three
categories, known as , , and
.
16.Stock Insurance Company
: A form of insurance company that is owned by stockholders who may
or may not also be policyowners. May distribute stock divi- dends
(taxable).
17.Admitted Insurer
: An insurer that has a certificate of authority in a given state is said to
be an insurer in that state.
18.Express, Implied, and Apparent Authority
: Express authority—The right to sign an application as an agent for
the insurer.
Implied authority—Using a computer program to identify insurance
needs and to recommend solutions.
Apparent authority—Advising the applicant to not disclose on the
application any important health facts that might reduce his or her
insurability.
19.Indemnity vs. Valued Contract
: Two forms of insurance contract. An indemnity contract bases policy
With 100% Correct Verified Answers
1. Representations and Warranties
: Representations are statements the applicant makes on an application
that are deemed to be true to the applicant's best knowl- edge.
Warranties are statements the insurer makes in the contract.
2. Underwriting vs. Actuarial Departments
: Two related insurance company func- tions. Through the process of ,
applications are assessed for insurability and to assign premium rates.
The department analyzes data to
help estimate future losses and to produce rate tables.
3. Managerial System vs. General Agency System
: Two variations of the career agency system in which producers
represent a single company. One is headed by a company employee
called a general manager (GM), the other by an independent contractor
called a general agent (GA).
4. Fraternal Insurance Company
: A non-profit form of insurance provider spon- sored by an
organization of people who share a common ethnic, religious, or
,vocational affiliation.
5. Peril and Hazard
: Two related general insurance terms:
Peril is the immediate cause of a loss (and the event that is
insured against). Hazard is any condition that increases the risk of
incurring a loss.
6. Contract of adhesion
: A type of contract in which one party (the offeror) drafts the terms
that must be accepted as-is by the offeree. Insurance policies are this
type.
7. Mutual Insurance Company
: A form of insurance company that is owned by policyowners. May
distribute policy dividends (non-taxable) through participating
policies.
8. Independent Agency System
: An insurance distribution system in which the manager and
producers are fully independent and not affiliated with any single
insurer.
9. Buyer's Guide and Policy Summary
: Two related disclosure documents that are required by most states to
,be presented to life and health insurance applicants at some point
during the buying process.
10.Risk
: A basic insurance term referring to the possibility of incurring a loss
11.Law of Large Numbers
: A mathematical principle that is the basis for predicting the odds of a
loss occurring in a certain population in any given year.
12.Social Security (OASDI)
: A federal insurance program that provides disability, death, and
retirement benefits to covered workers and their qualifying
beneficiaries.
13.Agents vs. Brokers
: Two basic types of insurance producer: an
repre- sents a single insurer and a sells
policies from multiple insurers.
14.Reinsurance
: The process through which insurance companies spread large risks
among other insurers.
, 15.Domestic, Foreign, and Alien Insurers
: Insurers can be categorized by their state of domicile. There are three
categories, known as , , and
.
16.Stock Insurance Company
: A form of insurance company that is owned by stockholders who may
or may not also be policyowners. May distribute stock divi- dends
(taxable).
17.Admitted Insurer
: An insurer that has a certificate of authority in a given state is said to
be an insurer in that state.
18.Express, Implied, and Apparent Authority
: Express authority—The right to sign an application as an agent for
the insurer.
Implied authority—Using a computer program to identify insurance
needs and to recommend solutions.
Apparent authority—Advising the applicant to not disclose on the
application any important health facts that might reduce his or her
insurability.
19.Indemnity vs. Valued Contract
: Two forms of insurance contract. An indemnity contract bases policy
