AlabamaLife and HealthInsuranceExam
QuestionsandAnswers
Verifiedby ExpertGradedA+
1. Whichof thefollowingwouldbeconsidereda speculativerisk?:
Answer>The possi- bility thepaintingyou boughtmightbea long-lostmasterpiece
A speculativerisk is onein whichthereis a chancefor eitherlossor gain.ExampleGambling,Casino
Lottery,etc.All of theotherchoicesdescribepurerisk, wherethereis no chanceof gain, only a chan
of loss exists.
2. Whichis thepropertermfor a companyownedbyits policyowners?:
Answer>A mutual insurance company
3. A producerwhois actingasan agentis representing
Answer>Always the insurer
4. All of thefollowingareelementsof a contract,except
Answer>Authority
,All enforceablecontractsmust includethesecharacteristics:offerand acceptance(agreement),
considerations,competentparties,andlegalpurpose.Authorityis not
,considered one of the elements of a legal contract.
5. Eachofthefollowingwould
beanelementin thedefinitionoffraud,except:
-
Answer>: An individual warrantsa factstatedon theapplication
A warrantedfactis oneguaranteedto betrue.Althoughno statementon an applicationis regarded
aswarranty,nofraudis involvedif astatementis guaranteed to be true.
6. Examplesof Fraud:
Answer>Intentionalmaterialmisrepresentation
withtheintentof causinginjury to
anotherparty
Withholdingof knownmaterialfacts
A falsestatementon theapplicationthatis materialto theacceptanceof therisk
7. A companythatis licensedto sellinsurancein a particularstateis
Answer>An authorized Company
8. In orderto bevalid,a contractmustbebetweenindividualsconsideredlegallyableto enter
intoanagreement.Thisprincipleisknownas
Answer>Competentparties
, considered one of the elements of a legal contract.
9. An insurancecontractis an aleatorycontract.This
means
Answer>Equalvalueis notgivenby bothpartiesto thecontract
QuestionsandAnswers
Verifiedby ExpertGradedA+
1. Whichof thefollowingwouldbeconsidereda speculativerisk?:
Answer>The possi- bility thepaintingyou boughtmightbea long-lostmasterpiece
A speculativerisk is onein whichthereis a chancefor eitherlossor gain.ExampleGambling,Casino
Lottery,etc.All of theotherchoicesdescribepurerisk, wherethereis no chanceof gain, only a chan
of loss exists.
2. Whichis thepropertermfor a companyownedbyits policyowners?:
Answer>A mutual insurance company
3. A producerwhois actingasan agentis representing
Answer>Always the insurer
4. All of thefollowingareelementsof a contract,except
Answer>Authority
,All enforceablecontractsmust includethesecharacteristics:offerand acceptance(agreement),
considerations,competentparties,andlegalpurpose.Authorityis not
,considered one of the elements of a legal contract.
5. Eachofthefollowingwould
beanelementin thedefinitionoffraud,except:
-
Answer>: An individual warrantsa factstatedon theapplication
A warrantedfactis oneguaranteedto betrue.Althoughno statementon an applicationis regarded
aswarranty,nofraudis involvedif astatementis guaranteed to be true.
6. Examplesof Fraud:
Answer>Intentionalmaterialmisrepresentation
withtheintentof causinginjury to
anotherparty
Withholdingof knownmaterialfacts
A falsestatementon theapplicationthatis materialto theacceptanceof therisk
7. A companythatis licensedto sellinsurancein a particularstateis
Answer>An authorized Company
8. In orderto bevalid,a contractmustbebetweenindividualsconsideredlegallyableto enter
intoanagreement.Thisprincipleisknownas
Answer>Competentparties
, considered one of the elements of a legal contract.
9. An insurancecontractis an aleatorycontract.This
means
Answer>Equalvalueis notgivenby bothpartiesto thecontract
