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Life and Health Insurance exam Questions
with Detailed Verified Answers (100%
Correct Answers) /Already Graded A+
What year was the McCarren-Ferguson Act enacted?
Ans: 1945
Which of the following requires insurers to disclose when an applicant's consumer
or credit history is being investigated?
Ans: 1070 Fair Credit Reporting Act
A nonprofit incorporated society that does not have capital stock and operates
for the sole benefit of its members is known as:
Ans: fraternal benefit society
What type of reinsurance contract involves two companies automatically sharing
their risk exposure?
Ans: treaty
Who elects the governing body of a mutual insurance company?
Ans: policy holders
At what point must a life insurance applicant be informed of their rights that fall
under the Fair Credit Reporting Act?
Ans: Upon completion of the application
What is the name of the law that requires insurers to disclose information
gathering practices and where the information was obtained
Ans: Fair Credit Report
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A group-owned insurance company that is formed to assume and spread the
liability risks of its members is known as a
Ans: risk retention group
Which of these describes a participating life insurance policy?
Ans: Policyowners are entitled to receive dividends
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the
Ans: Fair Credit Reporting Act
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
Ans: reserves
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?
Ans: Aleatory
In an insurance contract the insurer is the only party who makes a legally
enforceable promise. What kind of contract is this?
Ans: Unilateral
Insurance contracts are known as ____ because certain future conditions or acts
must occur before any claims can be paid.
Ans: Conditional
Because certain future conditions or acts must
occur before any claims can be paid, insurance contracts
are known as conditional.
Stranger Originated Life Insurance has been found to be in violation of which if
the following contractual elements?
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Ans: Legal Purpose
A policy of adhesion can only be modified by whom?
Ans: The insurance company.
(A policy of adhesion is best described as a policy which only the insurance company can
modify.)
At what point does an informal contract begin binding?
Ans: When one party makes an offer and the other party except that offer
When third-party ownership is involved applicants who also happen to be the
stated primary beneficiary are required to have
Ans: insurable interest in the proposed insured
A life insurance arrangement which circumvents insurable interest statutes is
called
Ans: Investor-Originated Life Insurance
Statements made on an insurance application that are believed to be true to the
best of an applicants knowledge are called
Ans: Representations
Which of these require an offer, acceptance, and consideration?
Ans: Contract
The part of a life insurance policy guaranteed to be true is called a
Ans: Warranty
Warranties are statements that are considered literally true. A warranty that is not literally
true in every detail, even if made in error, is sufficient to render a policy void.
What is the consideration given by an insurer in the consideration clause of a life
policy?
Ans: Promise to pay a death benefit to a named beneficiary
Click here for more: Preppass - Stuvia
Life and Health Insurance exam Questions
with Detailed Verified Answers (100%
Correct Answers) /Already Graded A+
What year was the McCarren-Ferguson Act enacted?
Ans: 1945
Which of the following requires insurers to disclose when an applicant's consumer
or credit history is being investigated?
Ans: 1070 Fair Credit Reporting Act
A nonprofit incorporated society that does not have capital stock and operates
for the sole benefit of its members is known as:
Ans: fraternal benefit society
What type of reinsurance contract involves two companies automatically sharing
their risk exposure?
Ans: treaty
Who elects the governing body of a mutual insurance company?
Ans: policy holders
At what point must a life insurance applicant be informed of their rights that fall
under the Fair Credit Reporting Act?
Ans: Upon completion of the application
What is the name of the law that requires insurers to disclose information
gathering practices and where the information was obtained
Ans: Fair Credit Report
,Page | 2
Click here for more: Preppass - Stuvia
A group-owned insurance company that is formed to assume and spread the
liability risks of its members is known as a
Ans: risk retention group
Which of these describes a participating life insurance policy?
Ans: Policyowners are entitled to receive dividends
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the
Ans: Fair Credit Reporting Act
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
Ans: reserves
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?
Ans: Aleatory
In an insurance contract the insurer is the only party who makes a legally
enforceable promise. What kind of contract is this?
Ans: Unilateral
Insurance contracts are known as ____ because certain future conditions or acts
must occur before any claims can be paid.
Ans: Conditional
Because certain future conditions or acts must
occur before any claims can be paid, insurance contracts
are known as conditional.
Stranger Originated Life Insurance has been found to be in violation of which if
the following contractual elements?
, Page | 3
Click here for more: Preppass - Stuvia
Ans: Legal Purpose
A policy of adhesion can only be modified by whom?
Ans: The insurance company.
(A policy of adhesion is best described as a policy which only the insurance company can
modify.)
At what point does an informal contract begin binding?
Ans: When one party makes an offer and the other party except that offer
When third-party ownership is involved applicants who also happen to be the
stated primary beneficiary are required to have
Ans: insurable interest in the proposed insured
A life insurance arrangement which circumvents insurable interest statutes is
called
Ans: Investor-Originated Life Insurance
Statements made on an insurance application that are believed to be true to the
best of an applicants knowledge are called
Ans: Representations
Which of these require an offer, acceptance, and consideration?
Ans: Contract
The part of a life insurance policy guaranteed to be true is called a
Ans: Warranty
Warranties are statements that are considered literally true. A warranty that is not literally
true in every detail, even if made in error, is sufficient to render a policy void.
What is the consideration given by an insurer in the consideration clause of a life
policy?
Ans: Promise to pay a death benefit to a named beneficiary
