LOMA 281 2024 Exam Questions and Answers All Correct

LOMA 281 2024 Exam Questions and Answers All Correct What are speculative risks? - Answer-Risks that involve three outcomes: loss, gain, or no change What are pure risks? - Answer-Risks that involve no possibility of gain What risks are insurable? - Answer-Only pure risks Speculative risks involve the possibility of gain so they cannot be insured What is a retention limit? - Answer-The maximum amount of risk the insurer is willing to carry at its own risk What is a commutative contract? - Answer-The parties agree to exchange specified items or services that are equal in value What is an aleatory contract? - Answer-One party exchanges something of value for the other party's conditional promise Is a life insurance policy a commutative or aleatory contract? - Answer-Aleatory Are life insurance contracts bargaining contracts? - Answer-No, they are contracts of adhesion. The insurance company sets the terms and the applicant can either accept or reject Are insurance contracts formal or informal? - Answer-Informal What are the requirements of a valid contract? - Answer-Mutual assent Legally adequate consideration Lawful purpose Contractual capacity Which relatives automatically satisfy the requirement of insurable interest? - AnswerSpouses, children, parents, siblings, grandparents, and grandchildren What is ROP insurance? - Answer-A form of term life insurance that provides a death benefit if the insured dies during the term of coverage and promises a return of premiums if the insured does not die during the term of coverage.