Colorado Life and Health Insurance Exam Questions With Verified Answers

Dividends payable to a policy owner are... - Answer declared by the insurance company. Which of these describe a participating insurance policy? a) policy owners are entitled to receive dividends b) policy owners pay assessments for company losses c) stock companies allow policy owners to share in any company earnings d) policy owners are not entitled to vote for members of the board of directors - Answer a) policy owners are entitled to receive dividends At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? - Answer Upon the completion of application An insurance applicant must be informed of an investigation regarding his/her reputaion and character according to the... - Answer Fair Credit Reporting Act What type of reinsurance contract involves two companies automatically sharing their risk exposure? - Answer Treaty What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? - Answer Fair Credit Reporting Act What year was the McCarran-Ferguson Act enacted? - Answer 1945 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 insurance contract feature? - Answer Aleatory What is the consideration given by the insurer in the Consideration clause of a life policy? - Answer Promise to pay death benefit to named beneficiary What is a warranty? - Answer A statement guaranteed to be true Statements made on an insurance application that are believed to be true to the best of the applicants knowledge are: - Answer Representations If the material to risk, can representations void a policy? - Answer Yes What requires an offer, acceptance, and consideration? - Answer A contract A life insurance arrangement which circumvents insurable interest is called: - Answer Investor-Originated Life Insurance What are the elements of an insurance contract? - Answer Offer and acceptance, considerations, competent parties, legal purpose. What arrangement allows one to bypass insurable interest? - Answer Investor-Originated Life Insurance