Texas Life and Health Insurance Exam- Graded A+

What type of reinsurance contract involves two companies automatically sharing their risk exposure? - Answer- Treaty The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called - Answer- reserves When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have - Answer- insurable interest Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called - Answer- representations The part of a life insurance policy guaranteed to be true is called a(n) - Answer- warranty Which of these is NOT a type of agent authority? Express Implied Principal Apparent - Answer- Principal The Consideration clause of an insurance contract includes - Answer- the schedule and amount of premium payments E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? - Answer- In this situation, the proceeds from E's life insurance policy will go to F. Which term defines the legally enforceable promise in an insurance contract by the insurer? - Answer- Unilateral Insurance contracts are known as ____ because certain future conditions or acts must occur