WV State Life Insurance Exam Practice Questions and correct Answers

A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a: Risk retention group Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated? 1970-Fair Credit Reporting Act Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? Aleatory The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called: Reserves All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: Bilateral What year was the McCarran-Ferguson Act enacted? 1945 Which of the following consists of an offer, acceptance, and consideration? Contract Who elects the governing body of a mutual insurance company? Policyholders Insurance policies are considered aleatory contracts because: Performance is conditioned upon a future occurrence Who makes the legally enforceable promises in a unilateral contract? Insurance company Insurance contracts are known as _____ because certain future conditions or acts must occur before any claims can be paid. Conditional A life insurance arrangement which circumvents insurable interest statutes is called: Investor-Originated Life Insurance In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this? Unilateral When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: Insurable interest in the proposed insured Which of these arrangements allows one to bypass insurable interest laws? Investor-Originated Life Insurance