Fraternal Benefit Societies are non-profit, mutual aid organizations that engage
primarily in charitable activities. They offer their members insurance against death,
disease, and disability.
D. A fraternal benefit society pays dividends to its stockholders.
Answer: B
Bobby just purchased an insurance policy for his home from XYZ Insurance.
Which of the following would be a reason this policy may not be legally binding? -
ANSWER- A. Bobby is only 19 years old.
B. Bobby paid his first premium when he and his agent agreed on a policy, but he
is waiting for the policy documents to be prepared so he can sign them.
C. Bobby has an outstanding warrant for selling marijuana.
A contract is only legally binding if both parties are competent. If Bobby is not
mentally competent, he cannot enter into a contract.
D. Bobby has been diagnosed as mentally incompetent.
Answer: D
In a __________, only one party is legally obligated to perform. - ANSWER- A.
contract of adhesion
B. unilateral contract
C. conditional contract
That is incorrect. In a unilateral contract, only one party is legally obligated to
perform.
D. contract of utmost good faith
Answer: B. Unilateral contract
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,Mark incurred $8,000 damage to his car in an accident. He received $8,000 from
his insurance company and $4,000 from the other driver. By receiving a profit
from the loss, Mark could be in violation of: - ANSWER- A. the principle of profit
and loss.
B. the principle of financial status.
C. the principle of financial restoration.
D. the principle of indemnity.
Answer: D
In which section of an insurance policy might you find the following statement?
"'We, us, and our' refers to ABC Insurance company." - ANSWER- A. Exclusions
B. Definitions
C. Declarations
D. Conditions
Answer: B
Which of the following is NOT a characteristic of insurance contracts? -
ANSWER- A. Aleatory
B. Universal
C. Conditional
D. Unilateral
Answer: B
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,Which of the following is NOT a requirement for a legally binding contract? -
ANSWER- A. There must be a legal purpose.
B. There must be mutual consent.
C. It must be a notarized document.
D. Both parties must bring something of value.
Answer: C
Xavier owns a small insurance company. Recently the company won a bid to
insure a new housing development in Omaha, NE. His company can handle any
claims that arise, but if a series of tornados were to tear through the area and
destroy the entire development, Xavier's company would suffer financially. Which
type of insurer could help Xavier's company protect itself the most from this
potential loss? - ANSWER- A. A re-insurer
B. A stock insurer
C. A reciprocal insurance group
D. A fraternal benefits society
Answer: A
Which of the following would you find in the Conditions section of an insurance
policy? - ANSWER- A. Causes of loss that are not covered
B. The insured's duty after a loss
C. Policy limits
D. The meaning of certain important words in the contract
Answer: B
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, Which section of an insurance policy is designed to OMIT certain risks from
coverage? - ANSWER- A. Coverage Forms
B. Insuring Agreement
C. Definitions
D. Exclusions
Answer: D
SureTrust Insurance was founded and operates in Texas. In Texas, SureTrust is
considered: - ANSWER- A. a domestic insurer.
B. a state insurer.
C. an alien insurer.
D. a foreign insurer.
Answer: A
Frank purchases an automobile policy from publicly-traded XYZ Insurance. He
pays regular monthly premiums, and also purchases stock in XYZ and receives
dividends when the company turns a profit. From which type of company has
Frank purchased insurance? - ANSWER- A. Stock insurer
B. Mutual insurer
C. Re-Insurer
D. Reciprocal insurer
Answer: A
A "hazard" is defined as: - ANSWER- A. an insured item.
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primarily in charitable activities. They offer their members insurance against death,
disease, and disability.
D. A fraternal benefit society pays dividends to its stockholders.
Answer: B
Bobby just purchased an insurance policy for his home from XYZ Insurance.
Which of the following would be a reason this policy may not be legally binding? -
ANSWER- A. Bobby is only 19 years old.
B. Bobby paid his first premium when he and his agent agreed on a policy, but he
is waiting for the policy documents to be prepared so he can sign them.
C. Bobby has an outstanding warrant for selling marijuana.
A contract is only legally binding if both parties are competent. If Bobby is not
mentally competent, he cannot enter into a contract.
D. Bobby has been diagnosed as mentally incompetent.
Answer: D
In a __________, only one party is legally obligated to perform. - ANSWER- A.
contract of adhesion
B. unilateral contract
C. conditional contract
That is incorrect. In a unilateral contract, only one party is legally obligated to
perform.
D. contract of utmost good faith
Answer: B. Unilateral contract
dr.j
,Mark incurred $8,000 damage to his car in an accident. He received $8,000 from
his insurance company and $4,000 from the other driver. By receiving a profit
from the loss, Mark could be in violation of: - ANSWER- A. the principle of profit
and loss.
B. the principle of financial status.
C. the principle of financial restoration.
D. the principle of indemnity.
Answer: D
In which section of an insurance policy might you find the following statement?
"'We, us, and our' refers to ABC Insurance company." - ANSWER- A. Exclusions
B. Definitions
C. Declarations
D. Conditions
Answer: B
Which of the following is NOT a characteristic of insurance contracts? -
ANSWER- A. Aleatory
B. Universal
C. Conditional
D. Unilateral
Answer: B
dr.j
,Which of the following is NOT a requirement for a legally binding contract? -
ANSWER- A. There must be a legal purpose.
B. There must be mutual consent.
C. It must be a notarized document.
D. Both parties must bring something of value.
Answer: C
Xavier owns a small insurance company. Recently the company won a bid to
insure a new housing development in Omaha, NE. His company can handle any
claims that arise, but if a series of tornados were to tear through the area and
destroy the entire development, Xavier's company would suffer financially. Which
type of insurer could help Xavier's company protect itself the most from this
potential loss? - ANSWER- A. A re-insurer
B. A stock insurer
C. A reciprocal insurance group
D. A fraternal benefits society
Answer: A
Which of the following would you find in the Conditions section of an insurance
policy? - ANSWER- A. Causes of loss that are not covered
B. The insured's duty after a loss
C. Policy limits
D. The meaning of certain important words in the contract
Answer: B
dr.j
, Which section of an insurance policy is designed to OMIT certain risks from
coverage? - ANSWER- A. Coverage Forms
B. Insuring Agreement
C. Definitions
D. Exclusions
Answer: D
SureTrust Insurance was founded and operates in Texas. In Texas, SureTrust is
considered: - ANSWER- A. a domestic insurer.
B. a state insurer.
C. an alien insurer.
D. a foreign insurer.
Answer: A
Frank purchases an automobile policy from publicly-traded XYZ Insurance. He
pays regular monthly premiums, and also purchases stock in XYZ and receives
dividends when the company turns a profit. From which type of company has
Frank purchased insurance? - ANSWER- A. Stock insurer
B. Mutual insurer
C. Re-Insurer
D. Reciprocal insurer
Answer: A
A "hazard" is defined as: - ANSWER- A. an insured item.
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