PRIMERICA LIFE AND INSURANCE EXAM 2024 |
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The authority granted to an agent through the agent's contract is referred to as
a. Absolute authority
b. Express authority
c. Apparent authority
d. Implied authority
B. Express authority
express powers are written into the contract between the insurer and the agent
Insurance policies are not drawn up though negotiations, and an insured has little to say about its
provisions. What contract characteristic does this describe?
A. Unilateral
b. Conditional
c. Personal
d. Adhesion
D. Adhesion
a contract of adhesion is prepared by only the insurer; the insured's only option is to accept or
reject the policy as its written
Which of the following insurers are owned by stockholders who have the usual rights of
ownership, including the right of voting?
A. Reciprocal
b. Fraternal
c. Stock
d. Mutual
C. Stock
only stock insurance companies are owned and controlled by stockholders
Which of the following best describes the concept that the insured pays a small amount of
,premium for a large amount of risk on the part of the insurance company?
A. Subrogation
,b. Warranty
c. Aleatory
d. Adhesion
C. Aleatory
an insurance contract is an aleatory contract in that it requires a relatively small amount of
premium for a large risk
When an insured makes truthful statements on the application for insurance and pays the
required premium, it is known as which of the following?
A. Legal purpose
b. Contract of adhesion
c. Acceptance
d. Consideration
D. Consideration
consideration is something of value that each party gives to the other. The consideration on the
part of the insured is the payment of premium and the representations made in the application
Which of the following would qualify as a competent party in an insurance contract?
A. The applicant is intoxicated at the time of application
b. The applicant is 12 year old student
c. The applicant is under the influence of a mind-impairing medication at the time of application
d. The applicant has a prior felony conviction
D. The applicant has a prior felony conviction
when an insurer and insured enter into a contract, both parties must be legal of age and mentally
competent. It is legal for a person convicted of a felony to buy an insurance contract. An
intoxicated person, however, may not be mentally competent, a 12 year old student is considered
to be underage in most states and a person under mind-impairing medication most likely would
not be mentally competent
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which
of the following insurance principles has the insurer violated?
A. Representation
b. Adhesion
c. Consideration
d. Good health
, C. Consideration
the binding force in any contract is consideration. Consideration on the part of the insureds the
payment of premiums and the health representations made in the application. Consideration on
the part of the insurer is the promise to pay in the even of loss
Which of the following is a primary source of information used for insurance underwriting?
A. Application
b. Applicant interviews
c. Medical records.
D. Private investigations
A. Application
the application contains most of the information used for underwriting purposes. This is why its
completeness and accurarcy are so critical
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check
from the insurance company that was not taxable. This year, she did not receive a check from the
insurer. From what type of insurer did the insured purchase the policy?
A. Mutual
b. Reciprocal
c. Nonprofit service organization
d. Stock
A. Mutual
funds not paid out after paying claims and other operating costs are returned to the policy owners
in the form of a dividend. If all funds are paid out, no dividends are paid
Following a career change, an insured is no longer required to perform many physical activities,
so he has implemented a program where he walks and jogs for 45 minutes each morning. The
insured has also eliminated most fatty foods from his diet. Which method of dealing with risk
does this scenario describe?
A. Retention
b. Reduction
c. Transfer
d. Avoidance
ACCURATE CURRENTLY TESTING VERSION WITH
A STUDY GUIDE AND KNOWLEDGE FLASHCARDS |
ACCURATE AND VERIFIED FOR GUARANTEED PASS
| LATEST UPDATE
The authority granted to an agent through the agent's contract is referred to as
a. Absolute authority
b. Express authority
c. Apparent authority
d. Implied authority
B. Express authority
express powers are written into the contract between the insurer and the agent
Insurance policies are not drawn up though negotiations, and an insured has little to say about its
provisions. What contract characteristic does this describe?
A. Unilateral
b. Conditional
c. Personal
d. Adhesion
D. Adhesion
a contract of adhesion is prepared by only the insurer; the insured's only option is to accept or
reject the policy as its written
Which of the following insurers are owned by stockholders who have the usual rights of
ownership, including the right of voting?
A. Reciprocal
b. Fraternal
c. Stock
d. Mutual
C. Stock
only stock insurance companies are owned and controlled by stockholders
Which of the following best describes the concept that the insured pays a small amount of
,premium for a large amount of risk on the part of the insurance company?
A. Subrogation
,b. Warranty
c. Aleatory
d. Adhesion
C. Aleatory
an insurance contract is an aleatory contract in that it requires a relatively small amount of
premium for a large risk
When an insured makes truthful statements on the application for insurance and pays the
required premium, it is known as which of the following?
A. Legal purpose
b. Contract of adhesion
c. Acceptance
d. Consideration
D. Consideration
consideration is something of value that each party gives to the other. The consideration on the
part of the insured is the payment of premium and the representations made in the application
Which of the following would qualify as a competent party in an insurance contract?
A. The applicant is intoxicated at the time of application
b. The applicant is 12 year old student
c. The applicant is under the influence of a mind-impairing medication at the time of application
d. The applicant has a prior felony conviction
D. The applicant has a prior felony conviction
when an insurer and insured enter into a contract, both parties must be legal of age and mentally
competent. It is legal for a person convicted of a felony to buy an insurance contract. An
intoxicated person, however, may not be mentally competent, a 12 year old student is considered
to be underage in most states and a person under mind-impairing medication most likely would
not be mentally competent
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which
of the following insurance principles has the insurer violated?
A. Representation
b. Adhesion
c. Consideration
d. Good health
, C. Consideration
the binding force in any contract is consideration. Consideration on the part of the insureds the
payment of premiums and the health representations made in the application. Consideration on
the part of the insurer is the promise to pay in the even of loss
Which of the following is a primary source of information used for insurance underwriting?
A. Application
b. Applicant interviews
c. Medical records.
D. Private investigations
A. Application
the application contains most of the information used for underwriting purposes. This is why its
completeness and accurarcy are so critical
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check
from the insurance company that was not taxable. This year, she did not receive a check from the
insurer. From what type of insurer did the insured purchase the policy?
A. Mutual
b. Reciprocal
c. Nonprofit service organization
d. Stock
A. Mutual
funds not paid out after paying claims and other operating costs are returned to the policy owners
in the form of a dividend. If all funds are paid out, no dividends are paid
Following a career change, an insured is no longer required to perform many physical activities,
so he has implemented a program where he walks and jogs for 45 minutes each morning. The
insured has also eliminated most fatty foods from his diet. Which method of dealing with risk
does this scenario describe?
A. Retention
b. Reduction
c. Transfer
d. Avoidance
