Iowa Health License Exam Questions
with Verified Solutions
Agent/Producer - ANS-A legal representative of an insurance company; the
classification of a producer usually includes agents and brokers; agents are the agents
of the insurer
Applicant or proposed insured - ANS-A person applying for insurance
Consent - ANS-Permission to do something
Insurable interest - ANS-The policyowner facing the possibility of losing something of
value in the event of a loss
Insurance policy - ANS-A contract between a policyowner (and/or insured) and an
insurance company which agrees to pay the insured or the beneficiary for loss caused
by specific events
Insured - ANS-Person covered by the insurance policy; may or may not be the
policyowner
Insurer (principal) - ANS-the company who issues an insurance policy
Policyowner - ANS-The person entitled to exercise the rights and privileges in the policy
Premium - ANS-The money paid to the insurance company for the insurance policy
Elements of a contract - ANS-1) Agreement - Offer & Acceptance
2) Consideration
3) Competent parties
4) Legal purpose
Applicant's/Insured's "consideration" in terms of an insurance contract - ANS-The
payment of a premium and statements on the application
Insurer's "consideration" in terms of an insurance contract - ANS-The promise to pay in
the event of an insured's loss
Definition of Insurable Interest - ANS-Proven by love and affection, economic or
financial loss.
, Warranty - ANS-An absolutely true statement upon which the validity of the insurance
policy depends.
Representations - ANS-Statements believed to be true to the best of one's knowledge,
but they are not guaranteed to be true.
These answers are considered representations because while they are believed to be
true they could potential be inaccurate. - ANS-Are the answers given by insureds on an
insurance application considered to be a "warranty" or a "representation"?
Misrepresentations - ANS-Untrue statements on an application that could void the
contract.
Material Misrepresentation - ANS-A false statement that changes the outcome of
issuing a policy.
If intentionally misstated, would be considered fraud.
What makes an insurance policy a "conditional contract"? - ANS-The policy is only valid
and in effect based on the condition that the insured is up to date on the payment of
their premiums.
Unilateral Contract - ANS-An agreement in which only one of the parties is legally
bound to do anything. The insured makes no legally binding promise. However, the
insurer is legally bound to pay losses covered by a policy in force.
Contract of Adhesion - ANS-A contract that is prepared by one of the parties (insurer)
and accepted or rejected by the other party (insured). In other words, insurance
contracts are offered on a take-it-or-leave-it bases by an insurer.
Aleatory - ANS-An exchange of unequal amounts or values. The premium paid by the
insured is small in relation to the amount that will be paid by the insurer in the event of
loss.
Medical Information Bureau (MIB) - ANS-An information database that stores the health
histories of individuals who have applied for insurance in the past. Most insurance
companies subscribe to this database for underwriting purposes.
False. Insurers can charge higher rates based on adverse information but cannot deny
coverage. - ANS-True or False?
An insurer can refuse coverage solely on the basis of adverse information on an MIB
report.
1) Paramedical report (completed by a paramedic or RN)
2) Attending Physician's Statement (APS) (From a medical practitioner who treated the
applicant for a prior medical problem). - ANS-What are the only two types of medical
examination that insurers can require of an applicant?
with Verified Solutions
Agent/Producer - ANS-A legal representative of an insurance company; the
classification of a producer usually includes agents and brokers; agents are the agents
of the insurer
Applicant or proposed insured - ANS-A person applying for insurance
Consent - ANS-Permission to do something
Insurable interest - ANS-The policyowner facing the possibility of losing something of
value in the event of a loss
Insurance policy - ANS-A contract between a policyowner (and/or insured) and an
insurance company which agrees to pay the insured or the beneficiary for loss caused
by specific events
Insured - ANS-Person covered by the insurance policy; may or may not be the
policyowner
Insurer (principal) - ANS-the company who issues an insurance policy
Policyowner - ANS-The person entitled to exercise the rights and privileges in the policy
Premium - ANS-The money paid to the insurance company for the insurance policy
Elements of a contract - ANS-1) Agreement - Offer & Acceptance
2) Consideration
3) Competent parties
4) Legal purpose
Applicant's/Insured's "consideration" in terms of an insurance contract - ANS-The
payment of a premium and statements on the application
Insurer's "consideration" in terms of an insurance contract - ANS-The promise to pay in
the event of an insured's loss
Definition of Insurable Interest - ANS-Proven by love and affection, economic or
financial loss.
, Warranty - ANS-An absolutely true statement upon which the validity of the insurance
policy depends.
Representations - ANS-Statements believed to be true to the best of one's knowledge,
but they are not guaranteed to be true.
These answers are considered representations because while they are believed to be
true they could potential be inaccurate. - ANS-Are the answers given by insureds on an
insurance application considered to be a "warranty" or a "representation"?
Misrepresentations - ANS-Untrue statements on an application that could void the
contract.
Material Misrepresentation - ANS-A false statement that changes the outcome of
issuing a policy.
If intentionally misstated, would be considered fraud.
What makes an insurance policy a "conditional contract"? - ANS-The policy is only valid
and in effect based on the condition that the insured is up to date on the payment of
their premiums.
Unilateral Contract - ANS-An agreement in which only one of the parties is legally
bound to do anything. The insured makes no legally binding promise. However, the
insurer is legally bound to pay losses covered by a policy in force.
Contract of Adhesion - ANS-A contract that is prepared by one of the parties (insurer)
and accepted or rejected by the other party (insured). In other words, insurance
contracts are offered on a take-it-or-leave-it bases by an insurer.
Aleatory - ANS-An exchange of unequal amounts or values. The premium paid by the
insured is small in relation to the amount that will be paid by the insurer in the event of
loss.
Medical Information Bureau (MIB) - ANS-An information database that stores the health
histories of individuals who have applied for insurance in the past. Most insurance
companies subscribe to this database for underwriting purposes.
False. Insurers can charge higher rates based on adverse information but cannot deny
coverage. - ANS-True or False?
An insurer can refuse coverage solely on the basis of adverse information on an MIB
report.
1) Paramedical report (completed by a paramedic or RN)
2) Attending Physician's Statement (APS) (From a medical practitioner who treated the
applicant for a prior medical problem). - ANS-What are the only two types of medical
examination that insurers can require of an applicant?
