WebCE Annuities Exam 1 Study Questions with Answers

Shirley is financially responsible for her minor children but has never owned life insurance. She wants to purchase life insurance after being diangosed with a possibly terminal disease. Which of the following characterizes her desire to purchase life insurance? a. clean sheeting b. warehousing c. material misrepresentation d. adverse selection Correct Answer d. adverse selection Arthur is concerned that flying on a commercial airliner exposes him to the risk that he will be injured or killed in an aircraft accident. He manages that risk by choosing other modes of transportation. What is this method of risk management? a. risk transfer b. risk reduction c. risk avoidance d. risk assumption Correct Answer c. risk avoidance Insurance policies are offered to proposed insured on a "take it or leave it" basis, giving them no ability to negotiate terms or price which term describes this feature of insurance contracts. A. Adhesion B. Aleatory C. Unilateral D. Commutative Correct Answer A. Adhesion Corby applied for $100,000 of life insurance, paid $100 first premium on February 1, and was given a conditional receipt. He then died in a skiing accident 10 days later while the risk was being underwritten. What amount would be paid to Corby's beneficiary, assuming the risk was accepted as applied for on March 1. A. $0 B. $100 C. $100,000 D. $100,100 Correct Answer C. $100,000 Stacy is a captive agent for Best Rates insurance company. According to her agency contract she can use business cards containing best rates company logo, and can also submit applications for their policies. Which type of authority does Stacy have that authorizes her to take these actions? A. Apparent authority B. Express authority C. Implied authority D. Imputed authority Correct Answer B. Express authority Which of the following is NOT a duty of a state's Insurance Commissioner? A. Writing the state's insurance laws