©EVERLY 2024/2025 ALL RIGHTS RESERVED.
Rhode Island insurance Exam Questions And
Answers (Guaranteed A+)
The role of insurance is to - Answer✔transfer the risk of financial loss from an individual or
business to an insurance company
organized and incorporated under state law owned by stockholders who get a paid share of the
company's profit through dividends. also referred to as a nonparticipating or non-par bc policy
holder do not participate in paid dividends - Answer✔stock insurance company
organized and incorporated under state law. but they have no stockholders. instead, the
policyholders own the company. owners get paid a share of the companies profits through
dividends. participating or par companies bc policy owners do not participate in paid dividends -
Answer✔mutual insurer companies
process of a stock company being converted into a mutual company - Answer✔mutualization
process of a mutual company being converted into a stock company - Answer✔demutualization
an association formed to underwrite and issue insurance like coverage on certain items and areas
that might otherwise be uninsurable - Answer✔Lloyds of London
are a specialized branch of the insurance industry that insurers other insurance company's risk.
*is an arrangement by which an insurance company transfers or sells a portion of the risk to a
reinsurance company - Answer✔reinsurers
the insurance company transferring the risk - Answer✔ceding company
industrial insurance sold by home service or debit insurance companies - Answer✔home service
insurers
when 3rd party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have - Answer✔insurable interest in the proposed insured
which is considered a statement that is assured to be true in every respect - Answer✔warranty
which best describes a warranty - Answer✔statement guaranteed to be true
which of these is not considered to be an element of an insurance contract - Answer✔negotiating
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, ©EVERLY 2024/2025 ALL RIGHTS RESERVED.
a life insurance policy would be considered contract without? - Answer✔insurable interest
all of the following (bilateral unilateral aleatory adhesion) are considered to be typical
characteristics describing the nature of an insurance contract except - Answer✔bilateral
in an insurance contract the insurer is the only party who makes a legally enforceable promise
what kind of contract is this - Answer✔unilateral
Taking receipt of premiums and holding them for the insurance company is an example of -
Answer✔fiduciary responsibility
a policy of adhesion can only be modified by whom - Answer✔the insurance company
In regards to representations or warranties, which of these statements is TRUE? - Answer✔if
material to the risk, false representation will void a policy
Statements made on an insurance application that are believed to be true to the best of the
applicant's knowledge are called - Answer✔representations
life and health insurance policies are - Answer✔unilateral contracts
which of the following consists of an offer, acceptance, and consideration? - Answer✔contract
when must insurable interests exist for a life insurance contract to be valid - Answer✔inception
of the contract
The part of a life insurance policy guaranteed to be true is called a(n) - Answer✔warranty
K is shopping for a permanent life insurance policy that will offer her the most protection per $.
of annual premium. which of these policies best fits her needs? - Answer✔straight life
What type of life policy has a death benefit that adjusts periodically and is written for a specific
period of time? - Answer✔decreasing term
under a graded premium whole life policy - Answer✔the premium increases each year during the
early years of the contract and remains the same after that time
which statement is true regarding a variable whole life policy - Answer✔a minimum guaranteed
death benefit is provided
Which of these life products is NOT considered interest-sensitive? - Answer✔modified whole
life
which of the following type of policies pays a benefit if the insured goes blind - Answer✔AD&D
D needs life insurance that provides coverage for only a limited amount of time while also
paying the lowest possible premium. What kind of policy is needed? - Answer✔level term
Term insurance has which of the following characteristics? - Answer✔expires at the end of the
policy period
2|Page
Rhode Island insurance Exam Questions And
Answers (Guaranteed A+)
The role of insurance is to - Answer✔transfer the risk of financial loss from an individual or
business to an insurance company
organized and incorporated under state law owned by stockholders who get a paid share of the
company's profit through dividends. also referred to as a nonparticipating or non-par bc policy
holder do not participate in paid dividends - Answer✔stock insurance company
organized and incorporated under state law. but they have no stockholders. instead, the
policyholders own the company. owners get paid a share of the companies profits through
dividends. participating or par companies bc policy owners do not participate in paid dividends -
Answer✔mutual insurer companies
process of a stock company being converted into a mutual company - Answer✔mutualization
process of a mutual company being converted into a stock company - Answer✔demutualization
an association formed to underwrite and issue insurance like coverage on certain items and areas
that might otherwise be uninsurable - Answer✔Lloyds of London
are a specialized branch of the insurance industry that insurers other insurance company's risk.
*is an arrangement by which an insurance company transfers or sells a portion of the risk to a
reinsurance company - Answer✔reinsurers
the insurance company transferring the risk - Answer✔ceding company
industrial insurance sold by home service or debit insurance companies - Answer✔home service
insurers
when 3rd party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have - Answer✔insurable interest in the proposed insured
which is considered a statement that is assured to be true in every respect - Answer✔warranty
which best describes a warranty - Answer✔statement guaranteed to be true
which of these is not considered to be an element of an insurance contract - Answer✔negotiating
1|Page
, ©EVERLY 2024/2025 ALL RIGHTS RESERVED.
a life insurance policy would be considered contract without? - Answer✔insurable interest
all of the following (bilateral unilateral aleatory adhesion) are considered to be typical
characteristics describing the nature of an insurance contract except - Answer✔bilateral
in an insurance contract the insurer is the only party who makes a legally enforceable promise
what kind of contract is this - Answer✔unilateral
Taking receipt of premiums and holding them for the insurance company is an example of -
Answer✔fiduciary responsibility
a policy of adhesion can only be modified by whom - Answer✔the insurance company
In regards to representations or warranties, which of these statements is TRUE? - Answer✔if
material to the risk, false representation will void a policy
Statements made on an insurance application that are believed to be true to the best of the
applicant's knowledge are called - Answer✔representations
life and health insurance policies are - Answer✔unilateral contracts
which of the following consists of an offer, acceptance, and consideration? - Answer✔contract
when must insurable interests exist for a life insurance contract to be valid - Answer✔inception
of the contract
The part of a life insurance policy guaranteed to be true is called a(n) - Answer✔warranty
K is shopping for a permanent life insurance policy that will offer her the most protection per $.
of annual premium. which of these policies best fits her needs? - Answer✔straight life
What type of life policy has a death benefit that adjusts periodically and is written for a specific
period of time? - Answer✔decreasing term
under a graded premium whole life policy - Answer✔the premium increases each year during the
early years of the contract and remains the same after that time
which statement is true regarding a variable whole life policy - Answer✔a minimum guaranteed
death benefit is provided
Which of these life products is NOT considered interest-sensitive? - Answer✔modified whole
life
which of the following type of policies pays a benefit if the insured goes blind - Answer✔AD&D
D needs life insurance that provides coverage for only a limited amount of time while also
paying the lowest possible premium. What kind of policy is needed? - Answer✔level term
Term insurance has which of the following characteristics? - Answer✔expires at the end of the
policy period
2|Page
