COLORADO LIFE INSURANCE
The term insurance transaction includes: - CORRECT ANSWER -1) Solicitation; 2)
Negotiation; 3) Sales; 4) Advertising
Adverse Selection (insurance def) - CORRECT ANSWER -Insuring the risks that are
more prone to losses than the average risk
Agent/Producer - CORRECT ANSWER -a legal representative of an insurance
company; the classification of producer usually includes agents and brokers; agents
are the agents of the insurer
Applicant or proposed insured - CORRECT ANSWER -a person applying for insurance
Beneficiary - CORRECT ANSWER -A person who receives the benefits of an
insurance policy
Death Benefit - CORRECT ANSWER -the amount paid upon the death of the insured
in a life insurance policy
insurance policy - CORRECT ANSWER -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 - CORRECT ANSWER -person covered by the insurance policy; may or may
not be the policy owner
Insurer (principal) - CORRECT ANSWER -the company who issues an insurance
policy
lapse - CORRECT ANSWER -policy termination due to nonpayment of premium
Policyowner - CORRECT ANSWER -the person entitled to exercise the rights and
privileges in the policy
Agent Authority - CORRECT ANSWER -express, implied, apparent
Express Authority - CORRECT ANSWER -authority declared in clear, direct, and
definite terms
Implied Authority - CORRECT ANSWER -Authority that is not expressed or written
into the contract, but which the agent is assumed to have in order to transact the
business of insurance for the principal.
Apparent Authority - CORRECT ANSWER -The appearance or the assumption of
authority based on the actions, words, or deeds of the principal or because of
circumstances the principal created.
, Elements of a Legal Contract - CORRECT ANSWER -Agreement (offer and
acceptance), consideration, competent parties, and legal purpose
Aleatory Contract - CORRECT ANSWER -The exchange of value is unequal.
adhesion contract - CORRECT ANSWER -A take-it-or-leave-it offer made by a party
who holds most of the power in a bargaining session
Unilateral Contract - CORRECT ANSWER -promise in exchange for an act - a one-
sided promise
Conditional Contract - CORRECT ANSWER -a contract that becomes enforceable
only on the happening or termination of a specified condition
Application Statement - Warranty - CORRECT ANSWER -A absolutely true statement
Application Statement - Representations - CORRECT ANSWER -True to the best of
the applicants knowledge
Fraud - CORRECT ANSWER -intentional misrepresentation of a material fact, made
with the intention to deceive
Concealment - CORRECT ANSWER -intentional failure of the applicant for insurance
to reveal a material fact to the insurer
Material Fact - CORRECT ANSWER -A fact that would lead to a different underwriting
decision had the insurer known about it
Utmost Good Faith - CORRECT ANSWER -An obligation to act in complete honesty
and to disclose all relevant facts.
Personal Uses of Life Insurance - CORRECT ANSWER -Survivor protection, estate
creation and conservation, cash accumulation and liquidity
Key Person Insurance - CORRECT ANSWER -Life insurance that protects a firm
against losses due to the death of a key employee is known as
Buy-Sell Agreement - CORRECT ANSWER -A legal contract that determines what
will be done with a business in the event that an owner dies or becomes disabled.
Insurable Interest - CORRECT ANSWER -something of value that, if lost, would
cause you financial harm
Blood or Business - CORRECT ANSWER -Insurable Interest
The term insurance transaction includes: - CORRECT ANSWER -1) Solicitation; 2)
Negotiation; 3) Sales; 4) Advertising
Adverse Selection (insurance def) - CORRECT ANSWER -Insuring the risks that are
more prone to losses than the average risk
Agent/Producer - CORRECT ANSWER -a legal representative of an insurance
company; the classification of producer usually includes agents and brokers; agents
are the agents of the insurer
Applicant or proposed insured - CORRECT ANSWER -a person applying for insurance
Beneficiary - CORRECT ANSWER -A person who receives the benefits of an
insurance policy
Death Benefit - CORRECT ANSWER -the amount paid upon the death of the insured
in a life insurance policy
insurance policy - CORRECT ANSWER -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 - CORRECT ANSWER -person covered by the insurance policy; may or may
not be the policy owner
Insurer (principal) - CORRECT ANSWER -the company who issues an insurance
policy
lapse - CORRECT ANSWER -policy termination due to nonpayment of premium
Policyowner - CORRECT ANSWER -the person entitled to exercise the rights and
privileges in the policy
Agent Authority - CORRECT ANSWER -express, implied, apparent
Express Authority - CORRECT ANSWER -authority declared in clear, direct, and
definite terms
Implied Authority - CORRECT ANSWER -Authority that is not expressed or written
into the contract, but which the agent is assumed to have in order to transact the
business of insurance for the principal.
Apparent Authority - CORRECT ANSWER -The appearance or the assumption of
authority based on the actions, words, or deeds of the principal or because of
circumstances the principal created.
, Elements of a Legal Contract - CORRECT ANSWER -Agreement (offer and
acceptance), consideration, competent parties, and legal purpose
Aleatory Contract - CORRECT ANSWER -The exchange of value is unequal.
adhesion contract - CORRECT ANSWER -A take-it-or-leave-it offer made by a party
who holds most of the power in a bargaining session
Unilateral Contract - CORRECT ANSWER -promise in exchange for an act - a one-
sided promise
Conditional Contract - CORRECT ANSWER -a contract that becomes enforceable
only on the happening or termination of a specified condition
Application Statement - Warranty - CORRECT ANSWER -A absolutely true statement
Application Statement - Representations - CORRECT ANSWER -True to the best of
the applicants knowledge
Fraud - CORRECT ANSWER -intentional misrepresentation of a material fact, made
with the intention to deceive
Concealment - CORRECT ANSWER -intentional failure of the applicant for insurance
to reveal a material fact to the insurer
Material Fact - CORRECT ANSWER -A fact that would lead to a different underwriting
decision had the insurer known about it
Utmost Good Faith - CORRECT ANSWER -An obligation to act in complete honesty
and to disclose all relevant facts.
Personal Uses of Life Insurance - CORRECT ANSWER -Survivor protection, estate
creation and conservation, cash accumulation and liquidity
Key Person Insurance - CORRECT ANSWER -Life insurance that protects a firm
against losses due to the death of a key employee is known as
Buy-Sell Agreement - CORRECT ANSWER -A legal contract that determines what
will be done with a business in the event that an owner dies or becomes disabled.
Insurable Interest - CORRECT ANSWER -something of value that, if lost, would
cause you financial harm
Blood or Business - CORRECT ANSWER -Insurable Interest
