Loan against the cash value Policy withdrawal Policy dividend Death benefit, A business will typically use which type of life insurance to cover their employees? C) Implied nonparticipating life insurance policy participating life insurance policy divisible surplus life insurance policy straight life insurance policy, Which of the following is considered to be an event or condition that increases the probability of an insured's loss? A policy containing exclusions or limits that are not clearly disclosed to the policyholder, or a premium that is significantly higher than the risk covered, could be considered unfair or one-sided. Events are those which cannot be controlled by either . What kind of policy is this? A) there must be an offer and acceptance A (D) Only one party is legally bound to the contract. Assume that the product will be tested on 202020 randomly selected stained garments, and let xxx denote the number of these garments from which the stains will be completely removed. The amount of his disability income payments for an on-the-job injury may be reduced by. A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the. Before using an assumed name in Utah, a producer MUST, Maria would like an annuity that provides a guaranteed accumulation or payout. During periods of inflation, annuitants will experience a decrease in purchasing power of their payments. Insurer's promise to pay benefits Required fields are marked *. producer's apparent authority D) imposed authority, What makes an insurance policy a unilateral contract? Because of this, an insurance contract is considered voidable conditional aleatory unilateral, Who is responsible for assembling the policy forms for insureds? Premiums paid plus interest earned is returned to the beneficiary. What is a corridor in relation to a Universal Life insurance policy? The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. Rob recently died at age 60. B) A contract that has the potential for the unequal exchange of consideration for both parties A(n) ________ investigates, negotiates, and settles claims for a few on behalf of an insurance company. 0 Answers/Comments. Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? only one party makes any kind of enforceable promise, the terms must be accepted or rejected in full, Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium". Dependent term Guaranteed insurability Primary term Family term, Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested? B) acceptance Reduction of premium dividend option Extended term option Paid-up option Cash dividend option, Net death benefit will be reduced if the loan is not repaid, Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. Under the McCarran-Ferguson Act, what is the minimum penalty for this? d) an agreement requires a definite offer and an indefinite acceptance. renewal reinstatement resumption renovation, the MEC tends to be an investment vehicle, Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because the MEC has tax deductible premiums the MEC is considered an illegal product the MEC tends to be an investment vehicle the MEC does not accumulate cash value, The face amount and premium will remain constant over the 10-year period, Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Preferred risk policies with reduced premiums are issued by insurance companies because the insured has, Better than average mortality or morbidity experience. A.$1,656 The policies continue in force with no change. Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. Premium clause Consideration clause Adhesion clause Contestability clause, When the principal gives the agent authority in writing, it's referred to as express authority implied authority apparent authority imposed authority, Ambiguities in an insurance policy are always resolved in favor of the insured producer insurer underwriter, ______ is NOT an element of a valid contract. Advertisement. The gap between the total death benefit and the policys cash value. Andy the annuitant dies before the annuity start date. Term insurance is appropriate for someone who, Seeks temporary protection and lower premiums. A) A contract that requires certain conditions or acts by the insured individual A Modified Endowment Contract (MEC) is best described as A life insurance contract which accumulates cash values higher than the IRS will allow An annuity contract which was converted from a life insurance contract A modified life contract which enjoys all the tax advantages of whole life insurance A life insurance contract where all withdrawals A) estoppel A) Tom's spouse A. B) implied authority B) the insurer's obligations are dependent upon certain acts of the insured individual C) Materiality of concealment Shirley has a $500,000 10-year-non-renewable level term life policy. D) Tom, The deeds and actions of a producer indicate what kind of authority? A) Sister and brother Julie has a $100,000 30-year mortgage on her new home. Vegetable B. When the principal gives the agent authority in writing, its referred to as, The terms must be accepted or rejected in full. Policy Application Riders Certificate of Authority, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) guaranteed term rider guaranteed insurability rider accelerated benefit rider cost of living rider, The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid minus indebtedness and with interest during the last 12 months minus indebtedness and without interest during the last 6 months, A life insurance policyowner does NOT have the right to change a beneficiary select a beneficiary take out a policy loan revoke an absolute assignment, A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT fare-paying passenger pilot of personal airplane suicide war, The insurer's obligation to pay a death benefit upon an approved death claim, Under a life insurance policy, what does the insuring clause state? 1 pt. representation Authority given to an agent to act outside the scope of the agency agreement, Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties, When the principal gives the agent authority in writing, it's referred to as A) A contract that requires certain conditions or acts by the insured individual. D) misrepresentation, Which of the following is NOT required in the content of a policy? See answers. It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. A fixed cash value A flexible premium schedule A fixed death benefit The ability to take out a policy loan, The least expensive option to pay off a 30-year mortgage balance would be convertible term life decreasing term life adjustable term life increasing term life, Pre-death distributions are typically taxable, Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test? D) A contract where only one party makes any kind of enforceable contract, Answer:A) A contract that requires certain conditions or acts by the insured individual. Intentional withholding of material facts that would affect an insurance policy's validity is called a(n). A non-contributory health insurance plan helps the insurer avoid. 2003-2023 Chegg Inc. All rights reserved. performance is conditioned upon a future occurrence. producer A provision that allows a policyowner to withdraw a policys cash value interest free is a(n), The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT, All of these are valid options for an Adjustable Life Policy EXCEPT, The policys premium can be increased or decreased, An insurers claim settlement practices are regulated by the. C.$2,113 Which of these statements regarding the annuitant is CORRECT? $0 $5,000 $10,000 $15,000, Determine financial strength of an insurance company, What is the primary purpose of a rating service company such as A.M Best? Rob purchased a standard whole life policy with a $500,000 death benefit when we was age 30. D) statements made in the application only, C) statements made in the application and the premium, According to life insurance contract law, insurable interest exists Answer Explanation: A contract that requires certain conditions or acts by the insured individual. Which of the following best describes a symbol. Which of the following is true of the law of contracts? The present cash value of the policy equals $250,000. Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value, Which type of policy combines the flexibility of a universal life policy with investment choices? One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. Term, whole, and universal life insurance. Term Straight Life Endowment Variable Life, A life insurance policy that has premiums fully paid up within a stated time period is called stated payment insurance limited universal insurance stated modified insurance limited payment insurance, Reggie purchased a life insurance policy with a face amount of $500,000. Joint life policy Survivorship life policy Dual life policy Multiple life policy, A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called whole life group life credit life universal life, Can be converted to permanent coverage without evidence of insurability, Donald is the primary insured of a life insurance policy and adds a children's term rider. A) Insurable interest Principal Capacity, All of the following are elements of an insurance policy EXCEPT the contract is voidable upon proof of fraud. The policies continue in force with no change. D) only one party makes any kind of enforceable promise, C) the terms must be accepted or rejected in full, What is implied authority defined as? Bob dies 12 months later. C) Authority given to handle claims and process payments promises made To see this page as it is meant to appear, please enable your Javascript! apparent authority In this situation, who will receive Bob's policy proceeds? B) at the time of application Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies? Intent, The deeds and actions of a producer indicate what kind of authority? if the insured lives beyond the 5 years, no benefits are payable. Which military service exclusion clause would pay upon his death? What is this an example of? The annuitants life expectancy determines the annuity payments, No one may be denied coverage by an insurance company due to, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n). Dorian exercises a nonforfeiture option by using his life policys cash value to purchase an extended term insurance option. Which of these statements is true? An example of an unfair claims settlement practice is, Turning down a claim without providing the basis of denial. Identify the type of financing (stock or bond) that best answers the question. Authority given to handle claims and process payments B) premium only c. income earned by Pat's spouse. D) Insurance producers, If a material warranty violation on the part of the insured is found, what recourse does an insurer have? C) aleatory Lisa has recently bought a fixed annuity. If she dies 15 years after the policy's inception date, how much will her beneficiary receive? C) there must be legal reasons for entering into the contract (C) Both parties exchange goods of equal value. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period? Increasing Term Life policy Nonparticipating policy Modified Whole Life policy Universal Life policy, What is the automatic continuance of insurance coverage referred to as? A) Sue the insured Sister and brother A) when any business relationship exists Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index.