Iowa Health License Exam
Agent/Producer - correct answer ✔A legal representative of an insurance
company; the classification of a producer usually includes agents and brokers;
agents are the agents of the insurer
Applicant or proposed insured - correct answer ✔A person applying for
insurance
Consent - correct answer ✔Permission to do something
Insurable interest - correct answer ✔The policyowner facing the possibility of
losing something of value in the event of a loss
Insurance policy - correct answer ✔A contract between a policyowner
(and/or insured) and an insurance company which agrees to pay the insured
or the beneficiary for loss caused by specific events
Insured - correct answer ✔Person covered by the insurance policy; may or
may not be the policyowner
Insurer (principal) - correct answer ✔the company who issues an insurance
policy
Policyowner - correct answer ✔The person entitled to exercise the rights and
privileges in the policy
Premium - correct answer ✔The money paid to the insurance company for
the insurance policy
,Elements of a contract - correct answer ✔1) Agreement - Offer &
Acceptance
2) Consideration
3) Competent parties
4) Legal purpose
Applicant's/Insured's "consideration" in terms of an insurance contract -
correct answer ✔The payment of a premium and statements on the
application
Insurer's "consideration" in terms of an insurance contract - correct answer
✔The promise to pay in the event of an insured's loss
Definition of Insurable Interest - correct answer ✔Proven by love and
affection, economic or financial loss.
Warranty - correct answer ✔An absolutely true statement upon which the
validity of the insurance policy depends.
Representations - correct answer ✔Statements believed to be true to the
best of one's knowledge, but they are not guaranteed to be true.
These answers are considered representations because while they are
believed to be true they could potential be inaccurate. - correct answer ✔Are
the answers given by insureds on an insurance application considered to be a
"warranty" or a "representation"?
Misrepresentations - correct answer ✔Untrue statements on an application
that could void the contract.
, Material Misrepresentation - correct answer ✔A false statement that changes
the outcome of issuing a policy.
If intentionally misstated, would be considered fraud.
What makes an insurance policy a "conditional contract"? - correct answer
✔The policy is only valid and in effect based on the condition that the insured
is up to date on the payment of their premiums.
Unilateral Contract - correct answer ✔An agreement in which only one of the
parties is legally bound to do anything. The insured makes no legally binding
promise. However, the insurer is legally bound to pay losses covered by a
policy in force.
Contract of Adhesion - correct answer ✔A contract that is prepared by one of
the parties (insurer) and accepted or rejected by the other party (insured). In
other words, insurance contracts are offered on a take-it-or-leave-it bases by
an insurer.
Aleatory - correct answer ✔An exchange of unequal amounts or values. The
premium paid by the insured is small in relation to the amount that will be paid
by the insurer in the event of loss.
Medical Information Bureau (MIB) - correct answer ✔An information
database that stores the health histories of individuals who have applied for
insurance in the past. Most insurance companies subscribe to this database
for underwriting purposes.
False. Insurers can charge higher rates based on adverse information but
cannot deny coverage. - correct answer ✔True or False?
Agent/Producer - correct answer ✔A legal representative of an insurance
company; the classification of a producer usually includes agents and brokers;
agents are the agents of the insurer
Applicant or proposed insured - correct answer ✔A person applying for
insurance
Consent - correct answer ✔Permission to do something
Insurable interest - correct answer ✔The policyowner facing the possibility of
losing something of value in the event of a loss
Insurance policy - correct answer ✔A contract between a policyowner
(and/or insured) and an insurance company which agrees to pay the insured
or the beneficiary for loss caused by specific events
Insured - correct answer ✔Person covered by the insurance policy; may or
may not be the policyowner
Insurer (principal) - correct answer ✔the company who issues an insurance
policy
Policyowner - correct answer ✔The person entitled to exercise the rights and
privileges in the policy
Premium - correct answer ✔The money paid to the insurance company for
the insurance policy
,Elements of a contract - correct answer ✔1) Agreement - Offer &
Acceptance
2) Consideration
3) Competent parties
4) Legal purpose
Applicant's/Insured's "consideration" in terms of an insurance contract -
correct answer ✔The payment of a premium and statements on the
application
Insurer's "consideration" in terms of an insurance contract - correct answer
✔The promise to pay in the event of an insured's loss
Definition of Insurable Interest - correct answer ✔Proven by love and
affection, economic or financial loss.
Warranty - correct answer ✔An absolutely true statement upon which the
validity of the insurance policy depends.
Representations - correct answer ✔Statements believed to be true to the
best of one's knowledge, but they are not guaranteed to be true.
These answers are considered representations because while they are
believed to be true they could potential be inaccurate. - correct answer ✔Are
the answers given by insureds on an insurance application considered to be a
"warranty" or a "representation"?
Misrepresentations - correct answer ✔Untrue statements on an application
that could void the contract.
, Material Misrepresentation - correct answer ✔A false statement that changes
the outcome of issuing a policy.
If intentionally misstated, would be considered fraud.
What makes an insurance policy a "conditional contract"? - correct answer
✔The policy is only valid and in effect based on the condition that the insured
is up to date on the payment of their premiums.
Unilateral Contract - correct answer ✔An agreement in which only one of the
parties is legally bound to do anything. The insured makes no legally binding
promise. However, the insurer is legally bound to pay losses covered by a
policy in force.
Contract of Adhesion - correct answer ✔A contract that is prepared by one of
the parties (insurer) and accepted or rejected by the other party (insured). In
other words, insurance contracts are offered on a take-it-or-leave-it bases by
an insurer.
Aleatory - correct answer ✔An exchange of unequal amounts or values. The
premium paid by the insured is small in relation to the amount that will be paid
by the insurer in the event of loss.
Medical Information Bureau (MIB) - correct answer ✔An information
database that stores the health histories of individuals who have applied for
insurance in the past. Most insurance companies subscribe to this database
for underwriting purposes.
False. Insurers can charge higher rates based on adverse information but
cannot deny coverage. - correct answer ✔True or False?
