©THEBRIGHT EXAM SOLUTIONS
11/06/2024 10:41 AM
Missouri Life and Health Insurance Exam
Study Guide.
Insurance transaction includes: - answer✔By mail or other means:
- Solicitation
- Negotiation
- Sale
- Advising an individual about coverage
Elements of a legal contract - answer✔-Agreement (offer and acceptance)
- Consideration
- Competent parties
- Legal purpose
- Negotiation does NOT need to happen
Who make the offer in an insurance application - answer✔- Applicant
When does acceptance take place - answer✔- An insurers underwriter approves the application
and issues a policy
The binding force in any contract - answer✔- Consideration
- insurer promises to pay in the event of a loss
Contract of adhesion - answer✔- Prepared by the insurer and accepted or rejected by the
insured
- "Take it or leave it" basis
Insurance contracts are - answer✔- Aleatory
- exchange of unequal amounts of values
Unilateral contract - answer✔- only one of the parties is legally bound
, ©THEBRIGHT EXAM SOLUTIONS
11/06/2024 10:41 AM
- "one-way contract"
"When does an insurance policy go into effect" - answer✔- When the insured receives it
Conditional contract - answer✔- certain conditions must be met by the policy owner
Warranty - answer✔- An absolutely true statement upon upon which the validity of the
insurance policy depends
Representions - answer✔- Statements believed to be true
Misrepresentation - answer✔- Untrue statements on the applications
- Can void the contract
Material misrepresentation - answer✔- Would alter the underwriting decision of insurance
company
Part 1- General Information - answer✔- Name, age, address, birth date, gender, income, marital
status, and occupation
Part 2- Medical Information - answer✔- Medical background, present health
- Medical visits in recent years
- Medical status of relatives/ causes of deaths
Field underwriter - answer✔- Solicited the potential insured
- Analyzes health
- Gets info on client
Agents report - answer✔- Observations concerning the proposed insured
- Does not become a part of the entire contract
- communicate with underwriter and provide info about the applicant known by the agent
Required signatures - answer✔- the proposed insured
- the agent
- the policy owner (if not proposed insured)
Changes in the application - answer✔- Applicant must initial the change
Consequences of incomplete applications - answer✔- Must return to applicant for completion
, ©THEBRIGHT EXAM SOLUTIONS
11/06/2024 10:41 AM
- If a policy is issued with questions left unanswered, the contract will be interpreted as if the
insurer waived its right to have an answer to the question
Premium receipt - answer✔- Agent must issue
- Will determine when coverage will be effective
Conditional receipt - answer✔- effective either on the date of application or medical exam
- Most common type of receipt
- used when applicant submits prepaid application
Replacement - answer✔- Terminating an existing policy or letting it lapse and obtaining a new
one
- Nothing illegal about replacing life insurance
Underwriting - answer✔- The risk selection process
- Avoid adverse selection
Adverse selection - answer✔- Risks which are more likely to suffer a loss
- Protects the insurer
Insurable interest - answer✔- Must exist between policy owner and insured at time of
application
- Cannot buy on anyone
- Suffer financially if someone dies
Application - answer✔- Submit an application to the insurer for approval for a policy to be
issued
Fair Credit Reporting Act - answer✔- Consumer-reporting agencies must follow in order to
ensure that records are properly used
- Protects consumers
- Insurance rated by states
- "At the time of application"
- If willingly violates Act penalty up to $2,500
11/06/2024 10:41 AM
Missouri Life and Health Insurance Exam
Study Guide.
Insurance transaction includes: - answer✔By mail or other means:
- Solicitation
- Negotiation
- Sale
- Advising an individual about coverage
Elements of a legal contract - answer✔-Agreement (offer and acceptance)
- Consideration
- Competent parties
- Legal purpose
- Negotiation does NOT need to happen
Who make the offer in an insurance application - answer✔- Applicant
When does acceptance take place - answer✔- An insurers underwriter approves the application
and issues a policy
The binding force in any contract - answer✔- Consideration
- insurer promises to pay in the event of a loss
Contract of adhesion - answer✔- Prepared by the insurer and accepted or rejected by the
insured
- "Take it or leave it" basis
Insurance contracts are - answer✔- Aleatory
- exchange of unequal amounts of values
Unilateral contract - answer✔- only one of the parties is legally bound
, ©THEBRIGHT EXAM SOLUTIONS
11/06/2024 10:41 AM
- "one-way contract"
"When does an insurance policy go into effect" - answer✔- When the insured receives it
Conditional contract - answer✔- certain conditions must be met by the policy owner
Warranty - answer✔- An absolutely true statement upon upon which the validity of the
insurance policy depends
Representions - answer✔- Statements believed to be true
Misrepresentation - answer✔- Untrue statements on the applications
- Can void the contract
Material misrepresentation - answer✔- Would alter the underwriting decision of insurance
company
Part 1- General Information - answer✔- Name, age, address, birth date, gender, income, marital
status, and occupation
Part 2- Medical Information - answer✔- Medical background, present health
- Medical visits in recent years
- Medical status of relatives/ causes of deaths
Field underwriter - answer✔- Solicited the potential insured
- Analyzes health
- Gets info on client
Agents report - answer✔- Observations concerning the proposed insured
- Does not become a part of the entire contract
- communicate with underwriter and provide info about the applicant known by the agent
Required signatures - answer✔- the proposed insured
- the agent
- the policy owner (if not proposed insured)
Changes in the application - answer✔- Applicant must initial the change
Consequences of incomplete applications - answer✔- Must return to applicant for completion
, ©THEBRIGHT EXAM SOLUTIONS
11/06/2024 10:41 AM
- If a policy is issued with questions left unanswered, the contract will be interpreted as if the
insurer waived its right to have an answer to the question
Premium receipt - answer✔- Agent must issue
- Will determine when coverage will be effective
Conditional receipt - answer✔- effective either on the date of application or medical exam
- Most common type of receipt
- used when applicant submits prepaid application
Replacement - answer✔- Terminating an existing policy or letting it lapse and obtaining a new
one
- Nothing illegal about replacing life insurance
Underwriting - answer✔- The risk selection process
- Avoid adverse selection
Adverse selection - answer✔- Risks which are more likely to suffer a loss
- Protects the insurer
Insurable interest - answer✔- Must exist between policy owner and insured at time of
application
- Cannot buy on anyone
- Suffer financially if someone dies
Application - answer✔- Submit an application to the insurer for approval for a policy to be
issued
Fair Credit Reporting Act - answer✔- Consumer-reporting agencies must follow in order to
ensure that records are properly used
- Protects consumers
- Insurance rated by states
- "At the time of application"
- If willingly violates Act penalty up to $2,500
