Kentucky Health & Life (Commonwealth
Schools of Insurance - PT 1) Exam Questions
and Answers (Verified Solutions) 2026
RATED A+
spreading the result of financial loss among many persons so the cost to any one person is small -
CORRECT ANSWERS Insurance
suppose a person pays a specified amount of money into a fund in a predetermined, fixed interval basis.
The amount is based on the person's age. When the person dies, his family will be paid a specified
amount of money. Which of the following has taken place? - CORRECT ANSWERS Uncertainty
about living long enough to provide for the family's financial security has been exchanged for a certain
cost
Under the principle of life insurance, many pay for the actual losses of a few because - CORRECT
ANSWERS it is impossible to know in advance which few among the many will sustain losses.
Life insurance spreads among many the financial loss resulting from an individual's death so that the
cost to each individual is: - CORRECT ANSWERS small
a legal agreement between two or more parties promising a certain performance in exchange for a
valuable consideration - CORRECT ANSWERS contract
Why are life and health insurance policies considered unilateral contracts? - CORRECT ANSWERS
because only the insurance company is obligated to perform
Under the terms of a valid insurance contract, the policyowner's consideration is the premium paid and
the application as part of the contract. Which of the following represents the insurance company's
consideration? - CORRECT ANSWERS A PROMISE TO PAY BENEFITS IN THE EVENT OF A LOSS
, All of the following are characteristics of a legally enforceable contract: - CORRECT ANSWERS
- competent parties
- legal purpose
- offer and acceptance
- consideration.
Generally, which of the following could be a party to a valid contract? - CORRECT ANSWERS a
competent adult
Which of the following contracts could be considered valid? - CORRECT ANSWERS ONE THAT
IS FORMED FOR A LEGAL PURPOSE
Offer and acceptance being a characteristic of a legally enforceable contract, in an insurance
transaction, which party makes the offer and which accepts? - CORRECT ANSWERS the
potential insured make the offer by applying for coverage and submitting a premium, the company
accepts by issuing the policy.
Which of the following best describes the thing of value exchanged for the performance promised in a
contract? - CORRECT ANSWERS Consideration
The voluntary giving up of a known right or privilege is termed a: - CORRECT ANSWERS
Waiver
When an insurance contract is referred to as aleatory, this means: - CORRECT ANSWERS
equal value is not given by both parties
A contract that is not completed immediately is termed: - CORRECT ANSWERS Executory
Schools of Insurance - PT 1) Exam Questions
and Answers (Verified Solutions) 2026
RATED A+
spreading the result of financial loss among many persons so the cost to any one person is small -
CORRECT ANSWERS Insurance
suppose a person pays a specified amount of money into a fund in a predetermined, fixed interval basis.
The amount is based on the person's age. When the person dies, his family will be paid a specified
amount of money. Which of the following has taken place? - CORRECT ANSWERS Uncertainty
about living long enough to provide for the family's financial security has been exchanged for a certain
cost
Under the principle of life insurance, many pay for the actual losses of a few because - CORRECT
ANSWERS it is impossible to know in advance which few among the many will sustain losses.
Life insurance spreads among many the financial loss resulting from an individual's death so that the
cost to each individual is: - CORRECT ANSWERS small
a legal agreement between two or more parties promising a certain performance in exchange for a
valuable consideration - CORRECT ANSWERS contract
Why are life and health insurance policies considered unilateral contracts? - CORRECT ANSWERS
because only the insurance company is obligated to perform
Under the terms of a valid insurance contract, the policyowner's consideration is the premium paid and
the application as part of the contract. Which of the following represents the insurance company's
consideration? - CORRECT ANSWERS A PROMISE TO PAY BENEFITS IN THE EVENT OF A LOSS
, All of the following are characteristics of a legally enforceable contract: - CORRECT ANSWERS
- competent parties
- legal purpose
- offer and acceptance
- consideration.
Generally, which of the following could be a party to a valid contract? - CORRECT ANSWERS a
competent adult
Which of the following contracts could be considered valid? - CORRECT ANSWERS ONE THAT
IS FORMED FOR A LEGAL PURPOSE
Offer and acceptance being a characteristic of a legally enforceable contract, in an insurance
transaction, which party makes the offer and which accepts? - CORRECT ANSWERS the
potential insured make the offer by applying for coverage and submitting a premium, the company
accepts by issuing the policy.
Which of the following best describes the thing of value exchanged for the performance promised in a
contract? - CORRECT ANSWERS Consideration
The voluntary giving up of a known right or privilege is termed a: - CORRECT ANSWERS
Waiver
When an insurance contract is referred to as aleatory, this means: - CORRECT ANSWERS
equal value is not given by both parties
A contract that is not completed immediately is termed: - CORRECT ANSWERS Executory
