Michigan Life Accident & Health Exam || Errorless Solutions 100%.
What is considered to be the primary reason for buying life insurance? correct answers Provide
death benefits
Karen is a producer who has obtained personal information about a client without having a
legitimate reason to do so. Under the McCarran-Feguson Act, what is the minimum penalty for
this? correct answers $10,000 or up to 1 year in jail
A nonparticipating company is sometimes called a(n) correct answers Stock insurer, because
policyholders do not participate in dividends resulting from stock ownership.
The Fair Credit and Reporting Act's main purpose is to correct answers Protect Consumers with
guidelines regarding credit reporting and distribution
What is the primary purpose of a rating service such as A.M Best? correct answers Determine
financial strength of an insurance company
Fraternal Benefit Society has each of the following characteristics EXCEPT?
- Incorporated
- Without capital stock
- exist for profit
- exist for the benefit of its members correct answers Exist for profit, FBS are not for profit and
exist for the benefit of its members.
An insurer's ability to make unpredictable payouts to policyowners is called correct answers
Liquidity
The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT
- Charities
,- Political Organizations
- Insurance Sales Calls
- Surveys correct answers Insurance Sales Calls
A plan in which an employer pays insurance benefits from a fund derived from the employer's
current revenues is called? correct answers A self-funded plan
An insurer's claim settlement practices are regulated by the correct answers State Insurance
Departments
What is known as the immediate specific event causing loss and giving risk to risk? correct
answers Peril
When a house burns down what would the Peril be? When someone dies what would the peril
be? correct answers Fire, Death
How do insurers predict the increase of individual risks? correct answers Law of Large Numbers
Insurance companies determine risk exposure by which of the following? correct answers Law of
Large Numbers and Risk Pooling
Insurance represents the process of risk ________________. correct answers Transference
All of the following are examples of pure risk EXCEPT
-Losing Money at a Casino
-Injured while playing football
-Falling at a casino and breaking a hip
-Jewelry stolen during a home robbery correct answers Losing Money at a Casino, because that
is speculative risk. Pure risk means loss is the only possible outcome.
,Insurable interest does NOT occur in which of the following relationships? correct answers
Business owner and business client
According to life insurance contract law, insurable interest exists correct answers at the time of
application
According to the principle of Utmost Good Faith, the insured will answer questions on the
application to the best of their knowledge and pay the required premium, while the insurer will
deal fairly with the insured and it's correct answers promises made
When the principal gives the agent authority in writing, it's referred to as correct answers Express
Authority
In an insurance contract, the applicant's "consideration" is the correct answers Statements made
in the application and the premium
Which type of clause describes the following statement: "We have issued the policy in
consideration of the representations in your applications and payment of the first term premium".
correct answers Consideration Clause
Legal purpose is a term used in contract law meaning correct answers there must be legal reasons
for entering into the contract
In an insurance contract, the element that shows each party is giving something of value is called
correct answers Consideration
Which of the following is an example of the insured's consideration? correct answers A paid
premium
, What is implied authority defined as? correct answers Authority that is not specifically given to
an agent in the agency contract, but that an agent can reasonably assume to carry out his/her
duties
All of the following are elements of an insurance policy EXCEPT
- definitions
- other insurance
- claim forms
- conditions correct answers Claim forms
Intentional withholding of material facts that would affect an insurance policy's validity is called
a(n)? correct answers Concealment
Which of the following is present when an applicant stands to lose value if the insured dies?
correct answers Insurable Interest, the applicant is subject to loss upon death, illness, or disability
of the insured.
The power given to an individual producer that is not specifically addressed in his/her contract is
considered what type of authority? correct answers Implied
What are an applicant's statements concerning occupation, hobbies, and personal health history
regarded as? correct answers Representation
How are survivorship life insurance policies helpful in estate planning? correct answers Provide
funds to help pay taxes
Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30.
His insurance agent told him the policy would be paid up if he reached age 100. The present cash
value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be
correct answers $500,000
What is considered to be the primary reason for buying life insurance? correct answers Provide
death benefits
Karen is a producer who has obtained personal information about a client without having a
legitimate reason to do so. Under the McCarran-Feguson Act, what is the minimum penalty for
this? correct answers $10,000 or up to 1 year in jail
A nonparticipating company is sometimes called a(n) correct answers Stock insurer, because
policyholders do not participate in dividends resulting from stock ownership.
The Fair Credit and Reporting Act's main purpose is to correct answers Protect Consumers with
guidelines regarding credit reporting and distribution
What is the primary purpose of a rating service such as A.M Best? correct answers Determine
financial strength of an insurance company
Fraternal Benefit Society has each of the following characteristics EXCEPT?
- Incorporated
- Without capital stock
- exist for profit
- exist for the benefit of its members correct answers Exist for profit, FBS are not for profit and
exist for the benefit of its members.
An insurer's ability to make unpredictable payouts to policyowners is called correct answers
Liquidity
The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT
- Charities
,- Political Organizations
- Insurance Sales Calls
- Surveys correct answers Insurance Sales Calls
A plan in which an employer pays insurance benefits from a fund derived from the employer's
current revenues is called? correct answers A self-funded plan
An insurer's claim settlement practices are regulated by the correct answers State Insurance
Departments
What is known as the immediate specific event causing loss and giving risk to risk? correct
answers Peril
When a house burns down what would the Peril be? When someone dies what would the peril
be? correct answers Fire, Death
How do insurers predict the increase of individual risks? correct answers Law of Large Numbers
Insurance companies determine risk exposure by which of the following? correct answers Law of
Large Numbers and Risk Pooling
Insurance represents the process of risk ________________. correct answers Transference
All of the following are examples of pure risk EXCEPT
-Losing Money at a Casino
-Injured while playing football
-Falling at a casino and breaking a hip
-Jewelry stolen during a home robbery correct answers Losing Money at a Casino, because that
is speculative risk. Pure risk means loss is the only possible outcome.
,Insurable interest does NOT occur in which of the following relationships? correct answers
Business owner and business client
According to life insurance contract law, insurable interest exists correct answers at the time of
application
According to the principle of Utmost Good Faith, the insured will answer questions on the
application to the best of their knowledge and pay the required premium, while the insurer will
deal fairly with the insured and it's correct answers promises made
When the principal gives the agent authority in writing, it's referred to as correct answers Express
Authority
In an insurance contract, the applicant's "consideration" is the correct answers Statements made
in the application and the premium
Which type of clause describes the following statement: "We have issued the policy in
consideration of the representations in your applications and payment of the first term premium".
correct answers Consideration Clause
Legal purpose is a term used in contract law meaning correct answers there must be legal reasons
for entering into the contract
In an insurance contract, the element that shows each party is giving something of value is called
correct answers Consideration
Which of the following is an example of the insured's consideration? correct answers A paid
premium
, What is implied authority defined as? correct answers Authority that is not specifically given to
an agent in the agency contract, but that an agent can reasonably assume to carry out his/her
duties
All of the following are elements of an insurance policy EXCEPT
- definitions
- other insurance
- claim forms
- conditions correct answers Claim forms
Intentional withholding of material facts that would affect an insurance policy's validity is called
a(n)? correct answers Concealment
Which of the following is present when an applicant stands to lose value if the insured dies?
correct answers Insurable Interest, the applicant is subject to loss upon death, illness, or disability
of the insured.
The power given to an individual producer that is not specifically addressed in his/her contract is
considered what type of authority? correct answers Implied
What are an applicant's statements concerning occupation, hobbies, and personal health history
regarded as? correct answers Representation
How are survivorship life insurance policies helpful in estate planning? correct answers Provide
funds to help pay taxes
Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30.
His insurance agent told him the policy would be paid up if he reached age 100. The present cash
value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be
correct answers $500,000
