CA Life and Accident & Health Combo + Code & Ethics A+ EXAM Questions & Answers

A hazard that deals with attitudes, behavior, and habits is an example of: - ANSWER-Moral Hazard When can a representation be altered or withdrawn? - ANSWER-It can be altered or withdrawn before the insurance is issued. The function of insurance is best described as: - ANSWER-It spreads financial risk over a large group so as to minimize the loss to any one individual. What are the four major elements of a contract? - ANSWER-The four major elements of a contract are: (ACCL) agreement, competent parties, legal purpose, and consideration. A hazard is best defined as: - ANSWER-Anything that increases the chance of loss or severity of loss due to a peril. Which of the following are the main types of risks? - ANSWER-Speculative and pure T/F: Materiality of concealment is judged different than materiality of a misrepresentation. - ANSWER-False T/F: Concealment or false statements about material facts may allow the injured party to rescind the contract, even at a later date. - ANSWER-True Materiality is determined not by the event but by the influence of the facts on the party to whom communication is due, in form their estimate of the disadvantages of the proposed contract. - ANSWER-True An immaterial misrepresentation does not void coverage. - ANSWER-True