correct answers
What is the name of the law that requires insurers to disclose information gathering
practices and where the information is obtained - ANSWERS Fair Credit Reporting Act
Which of these describe a participating insurance policy - ANSWERS Policy owners
are entitled to receive dividends
Who elects the governing body of a mutual insurance company - ANSWERS
Policyholders
Which of the following requires insurer to disclose when an applicant's consumer credit
history is being investigated - ANSWERS Fair Credit Reporting Act
A group owned insurance company that is formed to assume and spread the liability
risk of it's members is know as a - ANSWERS risk retention group
Which of the following requires insurers to disclose when an applicant consumer or
Credit history is being investigated? - ANSWERS 1970 Fair Credit Reporting Act
When a policy pays dividends to it policyholders, it is said to be - ANSWERS
participating
An Insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the: - ANSWERS Fair Credit Reporting Act
What type of risk is the only insurable risk - ANSWERS Pure Risk
Prue Risk - ANSWERS Is a situation that can only result in a loss, there is no
opportunity for financial gain
What year was the McCarran-Ferguson Act enacted - ANSWERS 1945
The McCarran-Ferguson Act was enacted in 1945 and made it clear that continued
regulation of insurance by the states was in the public's best interest
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANSWERS Treaty
A nonprofit incorporated society that does not have capital stock and operates for the
sole benefits of its members is known as - ANSWERS A fraternal benefit society
, At what point must a life insurance applicant be informed of their rights that fall under
the Fair Credit Reporting Act - ANSWERS Upon completion of the application.
A contract where one party either accepts or rejects the terms of a contract written by
another is called a contract of - ANSWERS adhesion
insurance policies are offered on a "take it or leave it" basis, which make them -
ANSWERS Contracts of adhesion
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of - ANSWERS Insured
A policy of adhesion can only be modified by whom - ANSWERS 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 agreement become a binding contract - ANSWERS
When consideration is provided by one of the parties of the contract.
A life insurance policy would be considered a wagering contract WITHOUT -
ANSWERS Insurable interest
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called: - ANSWERS Representations
in an insurance contract, the insurer is the only party who makes a legally enforceable
promise. What kind of contract is this? - ANSWERS Unilateral
taking receipt of premiums and holding them for the insurance company is an example
of: - ANSWERS Fiduciary responsibility
Which of these require and offer, acceptance, and consideration? - ANSWERS
Contract
Who makes the legally enforceable promises in a unilateral insurance policy? -
ANSWERS Insurance company
Which of these is not a type of agent authority? - ANSWERS Principal
Which of these is considered a statement that is assured to be true in every respect? -
ANSWERS Warranty
When must insurable interest exist for a life insurance contract to be valid? -
ANSWERS Inception of the contract
, Which of these is NOT considered to be an element of an insurance contract -
ANSWERS Negotiating
What type of insurance offers permanent life coverage with premiums that are payable
for life? - ANSWERS Whole Life
When is the face amount of a Whole Life policy paid? - ANSWERS When the insured
dies or at the policy's maturity date.
A life insurance policy that provides a policyowner with cash value along a level face
amount is called.. - ANSWERS Whole Life
Which statement about whole life policy is correct? - ANSWERS Cash Value May be
borrowed against
Which of these Characteristics is consistent with a Straight Life policy - ANSWERS
Premiums are payable for as long as their is insurance coverage in force.
Tonya would like to be4 assured $10,000 is available in 10 years to replace a roof on
his house. What kind of $10,000 policy should she get - ANSWERS 10 year
Endowment
Kay pays on a $20,000 20-year Endowment Policy for 10 years and dies from an
automobile accident. How much will the insurance pay. - ANSWERS 20,000 death
benefits
Life insurance that covers an insured's whole lie with leve premiums paid over a limited
time is called... - ANSWERS limited-pay life
how long does the coverage normally remain on a limited pay life policy? - ANSWERS
Age 100
what type of policy would offer a 40-year old the quickest accumulation of cash value. -
ANSWERS 20- pay life
Naya is a 40- year old applicant who would like to retire at 70. He is looking to buy a life
insurance policy with level premiums, permanent protection and be paid-up at
retirement. Which of these should she purchase - ANSWERS 30-Pay Life
A 40 year old would like to purchase a Whole Life policy that will accumulate ah value
at a faster rate in the early years of the policy. With statement is correct. - ANSWERS
20-pay life accumulates faster then cash value faster than Straight Life.
What kind of policy has premium that stays fixed for the first five years then increases
in year 6 and stays level thereafter. Death benefits stays the same. - ANSWERS
Modified whole life