Page | 1
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Alabama Life and Health Insurance
Questions with Detailed Verified Answers
(100% Correct Answers) /Already Graded
A+
Insurance is a method risk is transferred to an insurer for consideration up to
Ans: a predetermined limit.
Which of the following would be considered proper establishment of insurable
interest in the life insurance area?
Ans: 1. spouses in each other
2. parents in their children
3. creditors in their debtors
Which of the following statements about the average number of people who die
each year is true?
Ans: It is called the mortality rate
An insurance contract is an aleatory contract. This means:
Ans: Equal value is not necessarily given by both parties to the contract
A life insurance policy is a unilateral contract because:
Ans: Only the insurance company is bound to live up to its side of the agreement
All of the following are elements of a contract
Ans: 1. Legal purpose
2. Offer and acceptance
3. Consideration
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A company that has not received permission from an Insurance Commissioner to
do business in his or her state is called a/an:
Ans: Unauthorized company
Misrepresentation is:
Ans: A written or oral statement which is false
The chance that a person who anticipates a loss will purchase insurance is:
Ans: Adverse Selection
Assuming a deductible with your insurance policy is which type of risk
management technique?
Ans: Assumption of risk
In the Health-Disability area we use what type data to produce rates?
Ans: Morbidity tables
A company that is licensed to sell insurance in a particular state is:
Ans: An authorized company
he most effective way to ensure that the applicant will accept the policy when it
is issued is:
Ans: To have the applicant pay the initial premium at the time of application
Which is the proper term for a company owned by its policy owner?
Ans: A mutual insurance company
The punishment for fraud or making false statements may include:
Ans: Fines, imprisonment or both
A producer who is acting as an agent is representing:
Ans: Always the insurer
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The premium paid and the statements on the application to the insurance
company is called
Ans: consideration
In life insurance the insurable interest requirements is generally satisfied if:
Ans: the policy owner must expect to suffer a loss if the insured dies.
Each of the following would be an element in the definition of fraud
Ans: 1. Statements relied upon by a second party who then suffers a loss
2. Intent to gain advantage
3. An intentional misrepresentation made by the applicant
Risk may be defined as:
Ans: The uncertainty of loss
A father did not reveal that his daughter suffers from asthma on the application
for a health policy. In order to avoid paying a claim the insurer must
Ans: prove this was both intentional and material
In order to be valid, a contract must be between individuals considered legally
able to enter into an agreement. This principle is known as:
Ans: competent parties
When signing the application form, the proposed insured is:
Ans: Making a formal request to the company for an insurance policy.
What constitutes an entire insurance contract?
Ans: The policy, its endorsements, and any attached papers
T/F Misrepresentations on the part of an applicant as to the health or other
conditions of the applicant must be deliberate and material for an insurer to
avoid coverage.
Ans: True
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T/F Misrepresentation is a deliberate false representation on the part of the
agent or insurer as to the terms and conditions of the policy its terms and
benefits.
Ans: True
T/F Warranties are not used in the life-health-disability area.
Ans: True
A pure risk
Ans: generally presents no possibility of financial gain.
Which of the following would be considered a speculative risk?
Ans: The possibility the painting you bought might be a long lost masterpiece
To what does the statement spreading the result of financial loss created by an
individual's death among many persons, so the cost for each individual is small
refer?
Ans: The principle of life insurance
Select the correct statement.
Ans: A producer is never permitted to make a change in policy wording
The policy conditions represent the obligations of:
Ans: Both the insured and the insurer
Mortality figures are normally developed by studying and interpreting statistics:
Ans: Developed from the deaths of millions of persons over long periods of time.
To be able to start operations, a mutual company must have all of the following
Ans: 1. The advanced premium payment for each application
2. Minimum number of applications for insurance
3. A surplus as specified by the state
Lloyd's of London is involved
Click here for more: Preppass - Stuvia
Alabama Life and Health Insurance
Questions with Detailed Verified Answers
(100% Correct Answers) /Already Graded
A+
Insurance is a method risk is transferred to an insurer for consideration up to
Ans: a predetermined limit.
Which of the following would be considered proper establishment of insurable
interest in the life insurance area?
Ans: 1. spouses in each other
2. parents in their children
3. creditors in their debtors
Which of the following statements about the average number of people who die
each year is true?
Ans: It is called the mortality rate
An insurance contract is an aleatory contract. This means:
Ans: Equal value is not necessarily given by both parties to the contract
A life insurance policy is a unilateral contract because:
Ans: Only the insurance company is bound to live up to its side of the agreement
All of the following are elements of a contract
Ans: 1. Legal purpose
2. Offer and acceptance
3. Consideration
,Page | 2
Click here for more: Preppass - Stuvia
A company that has not received permission from an Insurance Commissioner to
do business in his or her state is called a/an:
Ans: Unauthorized company
Misrepresentation is:
Ans: A written or oral statement which is false
The chance that a person who anticipates a loss will purchase insurance is:
Ans: Adverse Selection
Assuming a deductible with your insurance policy is which type of risk
management technique?
Ans: Assumption of risk
In the Health-Disability area we use what type data to produce rates?
Ans: Morbidity tables
A company that is licensed to sell insurance in a particular state is:
Ans: An authorized company
he most effective way to ensure that the applicant will accept the policy when it
is issued is:
Ans: To have the applicant pay the initial premium at the time of application
Which is the proper term for a company owned by its policy owner?
Ans: A mutual insurance company
The punishment for fraud or making false statements may include:
Ans: Fines, imprisonment or both
A producer who is acting as an agent is representing:
Ans: Always the insurer
,Page | 3
Click here for more: Preppass - Stuvia
The premium paid and the statements on the application to the insurance
company is called
Ans: consideration
In life insurance the insurable interest requirements is generally satisfied if:
Ans: the policy owner must expect to suffer a loss if the insured dies.
Each of the following would be an element in the definition of fraud
Ans: 1. Statements relied upon by a second party who then suffers a loss
2. Intent to gain advantage
3. An intentional misrepresentation made by the applicant
Risk may be defined as:
Ans: The uncertainty of loss
A father did not reveal that his daughter suffers from asthma on the application
for a health policy. In order to avoid paying a claim the insurer must
Ans: prove this was both intentional and material
In order to be valid, a contract must be between individuals considered legally
able to enter into an agreement. This principle is known as:
Ans: competent parties
When signing the application form, the proposed insured is:
Ans: Making a formal request to the company for an insurance policy.
What constitutes an entire insurance contract?
Ans: The policy, its endorsements, and any attached papers
T/F Misrepresentations on the part of an applicant as to the health or other
conditions of the applicant must be deliberate and material for an insurer to
avoid coverage.
Ans: True
, Page | 4
Click here for more: Preppass - Stuvia
T/F Misrepresentation is a deliberate false representation on the part of the
agent or insurer as to the terms and conditions of the policy its terms and
benefits.
Ans: True
T/F Warranties are not used in the life-health-disability area.
Ans: True
A pure risk
Ans: generally presents no possibility of financial gain.
Which of the following would be considered a speculative risk?
Ans: The possibility the painting you bought might be a long lost masterpiece
To what does the statement spreading the result of financial loss created by an
individual's death among many persons, so the cost for each individual is small
refer?
Ans: The principle of life insurance
Select the correct statement.
Ans: A producer is never permitted to make a change in policy wording
The policy conditions represent the obligations of:
Ans: Both the insured and the insurer
Mortality figures are normally developed by studying and interpreting statistics:
Ans: Developed from the deaths of millions of persons over long periods of time.
To be able to start operations, a mutual company must have all of the following
Ans: 1. The advanced premium payment for each application
2. Minimum number of applications for insurance
3. A surplus as specified by the state
Lloyd's of London is involved
