COLORADO LIFE INSURANCE EXAM REVIEW SOLVED QUESTIONS COMPLETE ANSWERS

COLORADO LIFE INSURANCE EXAM REVIEW SOLVED QUESTIONS COMPLETE ANSWERS
GRADED A PLUS




Question:
Adverse Selection (insurance def)

Answer:
Insuring the risks that are more prone to losses than the average risk



Question:
Agent/Producer

Answer:
a legal representative of an insurance company; the classification of producer usually includes
agents and brokers; agents are the agents of the insurer



Question:
Applicant or proposed insured

Answer:
a person applying for insurance



Question:
Beneficiary

Answer:
A person who receives the benefits of an insurance policy



Question:

,Death Benefit

Answer:
the amount paid upon the death of the insured in a life insurance policy



Question:
insurance policy

Answer:
a contract between a policyowner (and/or insured) and an insurance company which agrees to pay
the insured or the beneficiary for loss caused by specific events



Question:
Insured

Answer:
person covered by the insurance policy; may or may not be the policy owner



Question:
Insurer (principal)

Answer:
the company who issues an insurance policy



Question:
lapse

Answer:
policy termination due to nonpayment of premium



Question:
Policyowner

, Answer:
the person entitled to exercise the rights and privileges in the policy



Question:
Agent Authority

Answer:
express, implied, apparent



Question:
Express Authority

Answer:
authority declared in clear, direct, and definite terms



Question:
Implied Authority

Answer:
Authority that is not expressed or written into the contract, but which the agent is assumed to have in
order to transact the business of insurance for the principal.



Question:
Apparent Authority

Answer:
The appearance or the assumption of authority based on the actions, words, or deeds of the principal
or because of circumstances the principal created.



Question:
Elements of a Legal Contract