Florida Life and Health Insurance Questions & Answers Correct 100%

Insured - Answer The person covered by the insurance policy. Rider - Answer A written modification attached to a policy that increases or decreases coverage and/or premiums. What is a unilateral contract? - Answer A contract in which only one of the parties is legally bound to fulfill its obligations. What law protects consumers from the circulation of inaccurate or obsolete information? - Answer The Fair Credit Reporting Act. What are the three types of agent authority? - Answer Implied, Express, and Apparent. Agent - Answer An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of the insurer. What is name of the process that insurance companies use to determine whether or not an applicant is insurable? - Answer Underwriting The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility? - Answer Fiduciary What is a third-party ownership? - Answer An insurance arrangement in which the policy owner and the insured are not the same person. Suitability - Answer Factors that determine if an insurance product is appropriate for a particular customer. Premium - Answer A payment by the policy owner to the insurance company to keep the policy in force. Disclosure - Answer Providing sufficient information to help someone make informed decision. An agent offer a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of? - Answer Rebating If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered what type of insurer? - Answer Authorized What information are the members of the medical information bureau required to report? - Answer Adverse medical information about the applicants or insureds. What type of beneficiary can be changed at any point by the policy owner? - Answer Revocable What document describes the specific information about a policy? - Answer Policy Summary What is the term for the causes of loss insured against in an insurance policy? - Answer Peril Whom does an insurance agent represent? - Answer Insurance Company What is an unfair trade practice? - Answer Any fraudulent, deceptive, or dishonest business practice that is prohibited by statutes and regulations. Insurer - Answer The company that issues an insurance policy. Peril - Answer Cause of loss Contract of Adhesion - Answer A contract prepared by one party that must be accepted as written or be rejected by the other party. What are the four elements of an insurance contract? - Answer Agreement (Offer and Acceptance), consideration, competent parties, and legal purpose. Policy Provision - Answer A clause that stipulates the rights and obligations under an insurance contract. Fiduciary - Answer A producer who handles insurer's funds in a trust capacity. Who is considered a nonresident agent? - Answer An agent who resides and is licensed in another state, but is authorized to transact insurance in Florida. What is underwriting? - Answer The risk selection and classification process. What is the best way to handle incomplete insurance applications? - Answer Return the application to the applicant for completion. What are the five characteristics of an ideally insurable risk? - Answer Loss must be: 1. Due to Change 2. Definite and measurable 3. Statistically predictable 4. Not catastrophic 5. Coverage cannot be mandatory. What type of policy issues certificates of insurance to the insurance? - Answer Group Policy What is the purpose of a free-look period? - Answer To allow the insured to return the policy and get a full refund (if done during the free-look period) Whose responsibility is it to determine that all of the questions on an insurance application are answered? - Answer The Agent's What types of licensee represents the insurance company? - Answer Agent Who must be notified of the producers change of address? - Answer The department of Insurance Certificate of Insurance - Answer A document issued to insureds under a group plan that states the coverage being issued, and indicates the coverage type and amounts. Nonrenewal - Answer Termination of a policy by an insurer on the anniversary or renewal date. Representation - Answer A statement made by the applicant on the insurance application that is believed to be true. What is a warranty? - Answer An absolutely true statement that, if breached, may viod an insurance contract. In insurance, when is the offer usually made on a contract? - Answer When the insurance application is submitted. When a change needs to be made on the application for insurance, which is the best method for correcting the information? - Answer Complete a new application or ask the applicant to initial the correction on the original application. A situation in which a person can only experience a loss and no gain represents what type of risk? - Answer Pure Risk Who is responsible for the contents of insurance advertisements? - Answer The Insurance Company What is the entire contract in health insurance underwriting? - Answer The policy with riders and endorsements, plus a copy of the application. What is the main purpose for requiring a person to be licensed to transact insurance? - Answer To protect the general public. Who is an insurance agent? - Answer A person authorized to sell, solicit, and negotiate insurance contracts. What illegal act does a producer commit what representing a policy in a more favorable light than the policy really is? - Answer Misrepresentation Field Underwriter - Answer An insurance agent who conducts an initial policy solicitation and application. (The company's front line of underwriting) Policyowner - Answer The person entitled to exercise the rights and privileges in the policy. What is solvency? - Answer An insurer's ability to meet its financial obligations of policy owners, insureds, and beneficiaries. What entities make up the medical information bureau (MIB)? - Answer Insurers What is the foundation of statistical prediction of loss upon which rate for insurance are calculated? - Answer Law of Large Numbers Adverse Selection - Answer The tendency of risk with higher probability of loss to purchase and maintain insurance more often than the risks who represent lower probability of loss. Concealment - Answer The withholding of known facts that, if material, can void a contract. What is the purpose of a cease and desist order? - Answer To prevent a producer or insurer from violating laws for transacting insurance. What is the purpose of the Florida Guaranty Association? - Answer To protect policy owners, insureds, and beneficiaries from financial losses caused by insolvent insurers. Who's responsible for paying the cost of a medical examination required in the process of underwriting? - Answer The Insurer Which of the two types of policy assignments requires transfer of all ownership rights in the