Term
| Insurance policies issued by companies which are owned by stockholders and do not pay policy dividends are known as |
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Definition
| non-participating policies |
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Term
| Insurance policies issued by companies which allow their policyowners to participate in the favorable experience of the company through payment of dividends are known as |
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Definition
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Term
| A life insurance producer's agency agreement normally authorizes the licensee to do all of the following EXCEPT |
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Definition
solicit insurance
sell insurance
**issue policies**
collect premiums |
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Term
| The life and health insurance marketing system utilizing non-employee agents that represent just one insurance company and are often paid an allowance to cover office expense and staffing is the |
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Definition
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Term
| When an insurer cedes part of an insured's coverage to another insurance company, the insurer is engaging in |
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Definition
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Term
| What is the definition of Risk? |
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Definition
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Term
| Buying a map showing the location of an alleged buried treasure is an example of |
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Definition
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Term
| What is the purpose of insurance? |
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Definition
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Term
| The fact that insurance is more likely to be purchased by people who expect to experience a loss is known as |
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Definition
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Term
| "Adverse selection" will exist when |
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Definition
| the group of risks accepted for insurance is more likely than the average group to experience loss |
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Term
| A written agreement between two or more parties for a consideration is called a/an |
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Definition
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Term
| An applicant's consideration in an insurance contract refers to the |
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Definition
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Term
| In an insurance policy, exclusions and conditions are conspicuous, plain and clearly stated. An insured should not be surprised when the company denies a certain benefit or coverage because of a hidden clause. This is referred to as |
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Definition
| the doctrine of reasonable expectations |
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Term
| Ernie injures himself in an accident after paying just one premium on his medical expense policy. The insurer pays tens of thousands of dollars in medical expenses during his recovery. This is an example of |
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Definition
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Term
| Why are insurance contracts said to be contracts of adhesion? |
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Definition
| One party writes the contract and the other party must accept the contract as written |
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Term
| Because there is a mutual reliance of truthfulness on both parties, an insurance contract is said to be |
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Definition
| a contract of utmost good faith |
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Term
| Legally, who does an insurance agent (producer) represent? |
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Definition
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Term
| All statements made in life insurance policy or annuity contract applications are considered |
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Definition
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Term
| Withholding of facts that should be included in an application for insurance is called |
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Definition
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Term
| Which statement is correct? |
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Definition
**Concealment is the withholding of information that should have been provided to an insurer**
Representations are statements an individual guarantees to be true
Representations are universally assumed to be material
Warranties are statements an individual believes to be true to the best of his or her knowledge |
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Term
| The authority of an insurance provider included in the agreement between the producer and the company is known as |
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Definition
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Term
| The idea that when a loss occurs, the insured should be restored to the approximate financial condition occupied before the loss is known as |
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Definition
| the principle of indemnity |
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Term
| All of the following are examples of insurable interest EXCEPT |
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Definition
**An airline insuring the lives of its passengers**
An individual insuring his or her own life
A company insuring the life of its president
A parent insuring his or her child's life |
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Term
| Because certain events must occur before an insurance company is obligated to pay under an insurance contract, an insurance policy is said to be |
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Definition
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Term
| The agent tells the proposed insured that he has authority to issue the policy. The insurer has not specifically granted him this. The agent exercising |
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Definition
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Term
| With respect to an insurance application |
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Definition
| a representation is valid as long as it is true |
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