GA LIFE ACCIDENT AND SICKNESS EXAM QUESTIONS AND ANSWERS

GA LIFE ACCIDENT AND SICKNESS EXAM QUESTIONS AND ANSWERS At what point must a life insurance applicant be informed of their right that fall under the fair credit reporting act? - Correct Answer ️️ -Upon the completion of the application A Group owned insurance company that is formed to assume and spread the liability risks of its members is known as a: - Correct Answer ️️ -Risk retention group Who elects the governing body of a mutual insurance company - Correct Answer ️️ - Policyholders Which of these describes a participating insurance policy? - Correct Answer ️️ -Policy owners are entitled to receive dividends The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policy holders is called: - Correct Answer ️️ - reserves At what point does an informal agreement become a binding contract? - Correct Answer ️️ -When consideration is provided by one of the parties to the contract A policy of adhesion can only be modified by whom? - Correct Answer ️️ -The insurance company. (A policy of adhesion is best described as a policy which only the insurance company can modify.) A life insurance agreement which circumvents insurable interest statutes is called - Correct Answer ️️ -Investor - originated life insurance Which of these is not a type of agent authority? - Correct Answer ️️ -principal In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this? - Correct Answer ️️ -Unilateral Insurance contracts are unilateral. This means that only one party (the insurer) makes any kind of enforceable promise. When third-party ownership is involved, applicants who also happens to be the stated primary beneficiary are required to have - Correct Answer ️️ -Insurable interest in the proposed insured Which of these require an offer, acceptance, and consideration? - Correct Answer ️️ - Contract Offer, acceptance, and consideration are all elements of a contract. Insurance policies are considered aleatory contracts because - Correct Answer ️️ - performance is conditioned upon a future occurrence Which of these arrangements allows one to bypass insurable interest laws? - Correct Answer ️️ -Investor-originated life insurance (or IOLI), sometimes called stranger- originated life insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor. The investor compensates the insured and makes the premiums, then collects the death benefit when the insured dies. A contract where one party either except or reject the terms of a contract written by another party is called a contract of - Correct Answer ️️ -Adhesion Insurance contracts are known as___because certain future conditions or ask must occur before any claims can be paid - Correct Answer ️️ -Conditional In regards to representations or warranties, which of these statements is TRUE? - Correct Answer ️️ -If material to the risk, false representations will void a policy Which of these is not considered to be an element of an insurance contract? - Correct Answer ️️ -negotiating Insurance policies are offered on a take it or leave it bases, which make them - Correct Answer ️️ -Contracts of adhesion Statements made on insurance application that are believed to be true to the best of the applicants knowledge are called - Correct Answer ️️ -representations P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own? - Correct Answer ️️ -Endowment at age 70