Missouri Life and Health Insurance
Exam Questions and Answers 100%
Correct
Insurance transaction includes: - ANSWER-By mail or other means:
- Solicitation
- Negotiation
- Sale
- Advising an individual about coverage
Elements of a legal contract - ANSWER--Agreement (offer and acceptance)
- Consideration
- Competent parties
- Legal purpose
- Negotiation does NOT need to happen
Who make the offer in an insurance application - ANSWER-- Applicant
When does acceptance take place - ANSWER-- An insurers underwriter approves the
application and issues a policy
The binding force in any contract - ANSWER-- Consideration
- insurer promises to pay in the event of a loss
Contract of adhesion - ANSWER-- Prepared by the insurer and accepted or rejected by
the insured
- "Take it or leave it" basis
Insurance contracts are - ANSWER-- Aleatory
- exchange of unequal amounts of values
,Unilateral contract - ANSWER-- only one of the parties is legally bound
- "one-way contract"
"When does an insurance policy go into effect" - ANSWER-- When the insured receives
it
Conditional contract - ANSWER-- certain conditions must be met by the policy owner
Warranty - ANSWER-- An absolutely true statement upon upon which the validity of the
insurance policy depends
Representions - ANSWER-- Statements believed to be true
Misrepresentation - ANSWER-- Untrue statements on the applications
- Can void the contract
Material misrepresentation - ANSWER-- Would alter the underwriting decision of
insurance company
Part 1- General Information - ANSWER-- Name, age, address, birth date, gender,
income, marital status, and occupation
Part 2- Medical Information - ANSWER-- Medical background, present health
- Medical visits in recent years
- Medical status of relatives/ causes of deaths
Field underwriter - ANSWER-- Solicited the potential insured
- Analyzes health
- Gets info on client
,Agents report - ANSWER-- Observations concerning the proposed insured
- Does not become a part of the entire contract
- communicate with underwriter and provide info about the applicant known by the agent
Required signatures - ANSWER-- the proposed insured
- the agent
- the policy owner (if not proposed insured)
Changes in the application - ANSWER-- Applicant must initial the change
Consequences of incomplete applications - ANSWER-- Must return to applicant for
completion
- If a policy is issued with questions left unanswered, the contract will be interpreted as if
the insurer waived its right to have an answer to the question
Premium receipt - ANSWER-- Agent must issue
- Will determine when coverage will be effective
Conditional receipt - ANSWER-- effective either on the date of application or medical
exam
- Most common type of receipt
- used when applicant submits prepaid application
Replacement - ANSWER-- Terminating an existing policy or letting it lapse and
obtaining a new one
- Nothing illegal about replacing life insurance
Underwriting - ANSWER-- The risk selection process
- Avoid adverse selection
, Adverse selection - ANSWER-- Risks which are more likely to suffer a loss
- Protects the insurer
Insurable interest - ANSWER-- Must exist between policy owner and insured at time of
application
- Cannot buy on anyone
- Suffer financially if someone dies
Application - ANSWER-- Submit an application to the insurer for approval for a policy to
be issued
Fair Credit Reporting Act - ANSWER-- Consumer-reporting agencies must follow in
order to ensure that records are properly used
- Protects consumers
- Insurance rated by states
- "At the time of application"
- If willingly violates Act penalty up to $2,500
Consumer report - ANSWER-- Written and/or oral information regarding a consumers
credit, character, habits collected by a reporting agency from employment records,
credit reports, and other public sources
Investigative consumer reports - ANSWER-- Visit with neighbors/employers
- insured or reporting agency has 5 days to provider the consumer with additional
informtion
Medical Information Bureau (MIB) - ANSWER-- Insurance company looks at
- Nonprofit trade organization which received medical info from insurance companies
and maintains confidential medical information
- "Rated or declined"
Exam Questions and Answers 100%
Correct
Insurance transaction includes: - ANSWER-By mail or other means:
- Solicitation
- Negotiation
- Sale
- Advising an individual about coverage
Elements of a legal contract - ANSWER--Agreement (offer and acceptance)
- Consideration
- Competent parties
- Legal purpose
- Negotiation does NOT need to happen
Who make the offer in an insurance application - ANSWER-- Applicant
When does acceptance take place - ANSWER-- An insurers underwriter approves the
application and issues a policy
The binding force in any contract - ANSWER-- Consideration
- insurer promises to pay in the event of a loss
Contract of adhesion - ANSWER-- Prepared by the insurer and accepted or rejected by
the insured
- "Take it or leave it" basis
Insurance contracts are - ANSWER-- Aleatory
- exchange of unequal amounts of values
,Unilateral contract - ANSWER-- only one of the parties is legally bound
- "one-way contract"
"When does an insurance policy go into effect" - ANSWER-- When the insured receives
it
Conditional contract - ANSWER-- certain conditions must be met by the policy owner
Warranty - ANSWER-- An absolutely true statement upon upon which the validity of the
insurance policy depends
Representions - ANSWER-- Statements believed to be true
Misrepresentation - ANSWER-- Untrue statements on the applications
- Can void the contract
Material misrepresentation - ANSWER-- Would alter the underwriting decision of
insurance company
Part 1- General Information - ANSWER-- Name, age, address, birth date, gender,
income, marital status, and occupation
Part 2- Medical Information - ANSWER-- Medical background, present health
- Medical visits in recent years
- Medical status of relatives/ causes of deaths
Field underwriter - ANSWER-- Solicited the potential insured
- Analyzes health
- Gets info on client
,Agents report - ANSWER-- Observations concerning the proposed insured
- Does not become a part of the entire contract
- communicate with underwriter and provide info about the applicant known by the agent
Required signatures - ANSWER-- the proposed insured
- the agent
- the policy owner (if not proposed insured)
Changes in the application - ANSWER-- Applicant must initial the change
Consequences of incomplete applications - ANSWER-- Must return to applicant for
completion
- If a policy is issued with questions left unanswered, the contract will be interpreted as if
the insurer waived its right to have an answer to the question
Premium receipt - ANSWER-- Agent must issue
- Will determine when coverage will be effective
Conditional receipt - ANSWER-- effective either on the date of application or medical
exam
- Most common type of receipt
- used when applicant submits prepaid application
Replacement - ANSWER-- Terminating an existing policy or letting it lapse and
obtaining a new one
- Nothing illegal about replacing life insurance
Underwriting - ANSWER-- The risk selection process
- Avoid adverse selection
, Adverse selection - ANSWER-- Risks which are more likely to suffer a loss
- Protects the insurer
Insurable interest - ANSWER-- Must exist between policy owner and insured at time of
application
- Cannot buy on anyone
- Suffer financially if someone dies
Application - ANSWER-- Submit an application to the insurer for approval for a policy to
be issued
Fair Credit Reporting Act - ANSWER-- Consumer-reporting agencies must follow in
order to ensure that records are properly used
- Protects consumers
- Insurance rated by states
- "At the time of application"
- If willingly violates Act penalty up to $2,500
Consumer report - ANSWER-- Written and/or oral information regarding a consumers
credit, character, habits collected by a reporting agency from employment records,
credit reports, and other public sources
Investigative consumer reports - ANSWER-- Visit with neighbors/employers
- insured or reporting agency has 5 days to provider the consumer with additional
informtion
Medical Information Bureau (MIB) - ANSWER-- Insurance company looks at
- Nonprofit trade organization which received medical info from insurance companies
and maintains confidential medical information
- "Rated or declined"
