Life & Health Insurance Exam With Complete
Solutions Graded A+
What year was the McCarren-Ferguson Act enacted?
1945
Which of the following requires insurers to disclose when an applicant's consumer or credit history is
being investigated?
1070 Fair Credit Reporting Act
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of
its members is known as:
fraternal benefit society
What type of reinsurance contract involves two companies automatically sharing their risk exposure?
treaty
Who elects the governing body of a mutual insurance company?
policy holders
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit
Reporting Act?
Upon completion of the application
What is the name of the law that requires insurers to disclose information gathering practices and
where the information was obtained
Fair Credit Report
We have an expert-written solution to this problem!
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a
risk retention group
Which of these describes a participating life insurance policy?
Policyowners are entitled to receive dividends
An insurance applicant MUST be informed of an investigation regarding his/her reputation and
character according to the
Fair Credit Reporting Act
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
reserves
, Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q
dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of
the following insurance contract features?
Aleatory
In an insurance contract the insurer is the only party who makes a legally enforceable promise. What
kind of contract is this?
Unilateral
Insurance contracts are known as ____ because certain future conditions or acts must occur before
any claims can be paid.
Conditional
Because certain future conditions or acts must
occur before any claims can be paid, insurance contracts
are known as conditional.
Stranger Originated Life Insurance has been found to be in violation of which if the following
contractual elements?
Legal Purpose
A policy of adhesion can only be modified by whom?
The insurance company.
(A policy of adhesion is best described as a policy which only the insurance company can modify.)
At what point does an informal contract begin binding?
When one party makes an offer and the other party except that offer
When third-party ownership is involved applicants who also happen to be the stated primary
beneficiary are required to have
insurable interest in the proposed insured
A life insurance arrangement which circumvents insurable interest statutes is called
Investor-Originated Life Insurance
Statements made on an insurance application that are believed to be true to the best of an applicants
knowledge are called
Representations
Which of these require an offer, acceptance, and consideration?
Contract
The part of a life insurance policy guaranteed to be true is called a
Warranty
Warranties are statements that are considered literally true. A warranty that is not literally true in
every detail, even if made in error, is sufficient to render a policy void.
Solutions Graded A+
What year was the McCarren-Ferguson Act enacted?
1945
Which of the following requires insurers to disclose when an applicant's consumer or credit history is
being investigated?
1070 Fair Credit Reporting Act
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of
its members is known as:
fraternal benefit society
What type of reinsurance contract involves two companies automatically sharing their risk exposure?
treaty
Who elects the governing body of a mutual insurance company?
policy holders
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit
Reporting Act?
Upon completion of the application
What is the name of the law that requires insurers to disclose information gathering practices and
where the information was obtained
Fair Credit Report
We have an expert-written solution to this problem!
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a
risk retention group
Which of these describes a participating life insurance policy?
Policyowners are entitled to receive dividends
An insurance applicant MUST be informed of an investigation regarding his/her reputation and
character according to the
Fair Credit Reporting Act
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
reserves
, Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q
dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of
the following insurance contract features?
Aleatory
In an insurance contract the insurer is the only party who makes a legally enforceable promise. What
kind of contract is this?
Unilateral
Insurance contracts are known as ____ because certain future conditions or acts must occur before
any claims can be paid.
Conditional
Because certain future conditions or acts must
occur before any claims can be paid, insurance contracts
are known as conditional.
Stranger Originated Life Insurance has been found to be in violation of which if the following
contractual elements?
Legal Purpose
A policy of adhesion can only be modified by whom?
The insurance company.
(A policy of adhesion is best described as a policy which only the insurance company can modify.)
At what point does an informal contract begin binding?
When one party makes an offer and the other party except that offer
When third-party ownership is involved applicants who also happen to be the stated primary
beneficiary are required to have
insurable interest in the proposed insured
A life insurance arrangement which circumvents insurable interest statutes is called
Investor-Originated Life Insurance
Statements made on an insurance application that are believed to be true to the best of an applicants
knowledge are called
Representations
Which of these require an offer, acceptance, and consideration?
Contract
The part of a life insurance policy guaranteed to be true is called a
Warranty
Warranties are statements that are considered literally true. A warranty that is not literally true in
every detail, even if made in error, is sufficient to render a policy void.
