NC State LIFE Insurance Exam Questions and Answers Already Graded A+

NC State LIFE Insurance Exam Questions and Answers Already Graded A+ Insurable Interest Something of value that, if lost, would cause you financial harm. Must exist upfront at time of application. Legitimate financial reason for buying insurance. Impersonation Wrong person takes medical examination/test in connection with application for insurance. *Can be contested beyond 2 year incontestable clause* Adhesion Ins. Co. designs original contract. Insured has little or no control of content, no room for bargaining, no negotiations. Insured must take it or leave it. Indemnity Person restored to original condition he/she enjoyed prior to loss. Does not profit a gain from the insurance. Aleatory Ins. contract is "out of balance". Insured or bene might receive much more than he she pays into the policy or may pay premiums for a long time and yet have no loss. Conditional Ins. contract is conditional. Both parties must meet conditions. Even when a loss occurs. Ex) Life Ins. policy only pays on condition that proof of death is provided. Reinsurance Ins. between ins. co's. Ins. co's go to each other for help. Ex) A given risk is not acceptable to an ins. co. due to adverse medical/underwriting considerations or large amt of ins. involved is over co's retention limit Misrepresentation/Concealment Making misleading statements. Intentionally misrepresenting benefits, terms of policy. Concealing known material facts. Ex) Implying ins. policy equates shares of stock, implying dividends are guaranteed, overstating future values Interested Adjusted Cost Comparisons Similar policies are compared & int. is taken into account. Cost determined by considering int. that might have been earned on premiums had they been invested. (Surrender Cost Index measured at 10 & 20 years) Traditional Net Cost Comparisons Similar policies compared without taking the effect of int. into account. (Net Payment Cost Index measured at 10 & 20 yrs)