Insurance - Chapter 1 Exam Questions With 100% Correct Answers 2024

Insurance - Chapter 1 Exam Questions With 100% Correct Answers 2024 Which of the following is NOT a goal of risk retention? A: to minimize the insured's level of liability in the event of a loss B: to reduce expenses and improve cash flow C: to increase control of claim reserving and claims settlements D: To fund losses that cannot be insured - answerA. Retention results from three basic elements. To reduce expenses and improve cash flow, to increase control of claim reserving settlements, to fund losses that cannot be insured. When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention he also had severe chest pains. This is an example of A: Misrepresentation B: Fraud C: Warranty D: Concealment - answerD. Concealment is when the applicant withholds information that can effect a decision. In insurance, this is withholding information that can effect underwriting process. Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? A: Implied B: Apparent C: Assumed D: Express - answerA. Implied authority is not written in the agent's contract, but is required in order for the agent to conduct business. Implied authority exists because not every single detail of an agent's authority can be written into a contract Which of the following best describes the aleatory nature of an insurance contract? A: Only one of the parties is legally bound by the contract B: Ambiguities are in favor of the insured/ C: Policies are submitted to the insurer on a take it