WebCE Quizzes: General Insurance & Life Insurance complete questions and correct detailed answers assured pass

WebCE Quizzes: General Insurance & Life Insurance questions and correct detailed answers assured pass The federal Risk Retention Act of 1986 contains guidelines for which of the following entities? reinsurance companies surplus lines insurance companies Fraternal insurance companies risk retention groups risk retention groups Which of the following best describes an agent's responsibilities? An agent has no fiduciary duty toward insurers, applicants, or insureds. An agent has to act in the best interests of insureds, applicants, and insurers. An agent only has to act in the best interests of the insured or applicant, but not the insurer. An agent only has to act in the best interests of the insurer he or she represents. An agent has to act in the best interests of insureds, applicants, and insurers. 7/20/25, 12:25 PM WebCE Quizzes: General Insurance & Life Insurance / 2/231 An insurance producer tells a life insurance applicant that he has the authority to waive the medical exam that is normally required by the insurer with every application. The insurer may be required to accept the application without a medical exam due to the producer's: implied authority express authority apparent authority imputed authority apparent authority All of the following are part of a producer's responsibilities to an applicant EXCEPT: avoiding replacing an insurance policy unless doing so will clearly benefit the applicant research other insurance companies' insurance products if requested by the applicant disclose all important information about a proposed policy recommend insurance products that are suitable for the customer's needs research other insurance companies' insurance products if requested by the applicant 7/20/25, 12:25 PM WebCE Quizzes: General Insurance & Life Insurance / 3/231 The purpose for the Policy Summary, which must be given to every insurance applicant before an application is signed, is to: explain the step-by-step process involved in purchasing the recommended product explain the general features, benefits, and conditions of the type of insurance being considered disclose all the hidden costs associated with the policy being applied for provide buyers with details of the specific insurance contract they are considering for purchase provide buyers with details of the specific insurance contract they are considering for purchase If an applicant for an insurance policy submits an application without the first premium, which of the following is correct? The insurer may not make a counteroffer to the applicant. The applicant has invited the insurer to make an offer. The insurer has made an offer to the applicant. The applicant has made an offer to the insurer. The applicant has invited the insurer to make an offer. How long from when an insurance contract is issued does an insurance company have to void a life insurance policy on the basis of fraud? 12 months 24 months 7/20/25, 12:25 PM WebCE Quizzes: General Insurance & Life Insurance / 4/231 24 months 18 months 6 months Statements made on a life insurance application are considered: conditional promises representation s warranties unconditional promises representations An applicant for a $500,000 whole life insurance policy pays the initial premium along with his application. In this case, what has the applicant done? accepted an offer from the insurer accepted a counteroffer from the insurer made a counteroffer to the insurer made an offer to the insurer made an offer to the insurer 7/20/25, 12:25 PM WebCE Quizzes: General Insurance & Life Insurance / 5/231 All the following statements regarding perils and hazards are correct EXCEPT: A hazard is a condition that raises the chance of a peril occurring. Smoking cigarettes is an example of a peril. A peril is the immediate cause of a loss and is the event that insurance protects against. Indifference to loss is an example of a hazard. Smoking cigarettes is an example of a peril. The tendency of a person diagnosed with a serious illness to try to buy life or health insurance is known as: adverse selection concealment risk avoidance exposure reduction adverse selection All of the following are elements of an insurable risk EXCEPT: Any losses resulting from the insured peril must be definable as to time, cause, and location. The loss must be measurable. The insured peril must be outside of the insured's control. Losses resulting from the insured peril must be potentially catastrophic. Losses resulting from the insured peril must be potentially catastrophic. 7/20/25, 12:25 PM WebCE Quizzes: General Insurance & Life Insurance / 6/231 From an insurance perspective, the term "loss exposure" means: the extent to which an insurer discloses its marketing practices the extent to which insurers are required to open their financial books for public inspection the extent to which an insurer is subject to a possible loss the extent to which an insurer discloses the components making up its policy premium rates the extent to which an insurer is subject to a possible loss A not-for-profit insurance provider operated by an organization that has a representative form of leadership, operates on a lodge system, and exists solely for the benefit of its members and their beneficiaries is called a: mutual insurance company home service insurance company risk retention group fraternal insurance company fraternal insurance company 7/20/25, 12:25 PM WebCE Quizzes: General Insurance & Life Insurance / 7/231 Which of the following is an example of an unauthorized insurance company in Illinois? Company C, a Florida-based company that does not hold a certificate of authority Illinois but whose products are approved by the Illinois insurance department Company A, an Illinois-based company that holds a certificate of authority in Illinois and 32 other states Company B, an Iowa-based company that does not hold a certificate of authority in Illinois and sells products that are not approved by the Illinois insurance department Company D, a Canadian company that holds a certificate of authority in Illinois Company B, an Iowa-based company that does not hold a certificate of authority in Illinois and sells products that are not approved by the Illinois insurance department The Excalibur Insurance Company, domiciled in Iowa, transacts business legally in Nebraska. In Nebraska, Excalibur is a(n): non-admitted insurance company alien insurance company foreign insurance company domestic insurance company foreign insurance company 7/20/25, 12:25 PM WebCE Quizzes: General Insurance & Life Insurance / 8/231 The Royale Insurance Company, domiciled in Toronto, Canada, transacts business legally in New York. In New York, Royale is classified as a(n): unauthorized insurance company domestic insurance company alien insurance company foreign insurance company alien insurance company The contract between the producer and insurer, setting forth certain acts and duties the producer is specifically authorized to perform, describes the producer's: express authority implied authority agency authority apparent authority express authority The main purpose for errors and omissions insurance (E&O) is to: cover damages that arise due to services a producer non willfully failed to render allow the producer to be less diligent in complying with insurance sales disclosure requirements provide legal protection to the producer who is charged with cover damages that arise due to services a producer non-willfully failed to render 7/20/25, 12:25 PM WebCE Quizzes: General Insurance & Life Insurance / 9/231 willfully engaging in an unfair trade practice pay for an insurance company executive to meet with a policyowner to correct an error made by the producer during the sales process With respect to the field of insurance, who are the two parties bound by the law of agency? the producer and the policyowner the insurance company and the producer the insurer and the insured the state insurance department and the insurer the insurance company and the producer Buying life or health insurance is an example of which risk management technique? risk avoidance risk reduction risk retention risk transfer risk transfer