BMW Members Exam Questions & Answers
Q: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. What kind of
policy is this? - ANSWER:A:"Equity index whole life
Q: legal purpose is a term used in contract law meaning? - ANSWER:A: there must be legal reasons for
entering into a contract.
Q: which of the following is an example of the insurance consideration? - ANSWER:A: A paid premium
Q: according to the principle of utmost good faith, the insured will answer questions on the application
to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the
insured and it's? - ANSWER:A: promises made
Q: when the principal gives the agent authority in writing, it is referred to as? - ANSWER:A: Express
authority
Q:all of the following are elements of an insurance policy except? - ANSWER:A: claim forms
Q: in an insurance contract, the insurer is the only party legally obligated to perform. Because of this,
and insurance contract is considered? - ANSWER:A:unilateral
Q:The power given to an individual producer that is not specifically address in his/her contract is
considered what type of authority? - ANSWER:A: implied authority
Q:The deeds and actions of a producer indicate what kind of authority? - ANSWER:A:Apparent
Q:What are an applicant's statements concerning occupation, hobbies, and personal health history
regarded as? - ANSWER:A:representations (Statements by an applicant concerning personal health
history, family health history, occupation, and hobbies are referred)
Q:What is implied authority defined as? - ANSWER:A: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
Q:Bob and Tom start a business. Since each partner contributes an important element to the success of
the business, they decide to take life insurance policies out on each other, and name each other as
beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies
continue in force with no change. Both partners are still married at the time of Bob's death. In this
situation, who will receive Bob's policy proceeds? - ANSWER:A:Tom". Insurable interest only has to exist
at the time of the application, not at the time of the claim. Being there was no change in beneficiary
prior to Bob's death, Tom will still receive the policy proceeds.
Q:According to life insurance contract law, insurable interest exists - ANSWER:A:at the time of
application". According to life insurance in contract law, a person most likely will have an insurable
interest in insuring a person's life if at the time of application
, Q:Which of the following BEST describes a conditional insurance contract? - ANSWER:A:A contract that
requires certain conditions or acts by the insured individual
Q: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". -
ANSWER:A:Consideration clause
Q:What makes an insurance policy a unilateral contract? - ANSWER:A:only the insurer makes legally
enforceable promises in the contract
Q:Who is responsible for assembling the policy forms for insureds? - ANSWER:A:"Insurance carriers
Q:The authority granted to a licensed producer is provided via the - ANSWER:A:Law of Agency".
According to the Law of Agency, the producer/agent represents the principal/insurer and is granted
actual, implied and apparent authority to act on behalf of the insurer. The Law of Agency makes the
principal responsible for these acts of the agent.
Q:In an insurance contract, the element that shows each party is giving something of value is called -
ANSWER:A:Consideration
Q:The term which describes the fact that both parties of a contract may NOT receive the same value is
referred to as - ANSWER:A: Aleatory
Q:Insurable interest does NOT occur in which of the following relationships? - ANSWER:A:Business
owner and business client
Q:In order for a contract to be valid, it must - ANSWER:A:contain an offer and acceptance
Q:Ambiguities in an insurance policy are always resolved in favor of the - ANSWER:A:insured
Q:A limited payment whole life policy provides - ANSWER:A:Lifetime protection".
Q:Which policy feature makes a universal life policy different from a whole life policy? - ANSWER:A:A
flexible premium schedule
Q: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. What kind of
policy is this? - ANSWER:A:equity index whole life
Q:Which type of life insurance policy pays the face amount at the end of the specified period if the
insured is still alive? - ANSWER:A:"Endowment policy
Q:What types of life insurance are normally used for key employee indemnification - ANSWER:A:term,
whole, and universal life insurance
Q:A Modified Endowment Contract (MEC) is best described as - ANSWER:A:A life insurance contract
which accumulates cash values higher than the IRS will allow
Q:What is the automatic continuance of insurance coverage referred to as? - ANSWER:A:renewal
Q:What is a corridor in relation to a Universal Life insurance policy? - ANSWER:A:The gap between the
total death benefit and the policy's cash value
Q: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. What kind of
policy is this? - ANSWER:A:"Equity index whole life
Q: legal purpose is a term used in contract law meaning? - ANSWER:A: there must be legal reasons for
entering into a contract.
Q: which of the following is an example of the insurance consideration? - ANSWER:A: A paid premium
Q: according to the principle of utmost good faith, the insured will answer questions on the application
to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the
insured and it's? - ANSWER:A: promises made
Q: when the principal gives the agent authority in writing, it is referred to as? - ANSWER:A: Express
authority
Q:all of the following are elements of an insurance policy except? - ANSWER:A: claim forms
Q: in an insurance contract, the insurer is the only party legally obligated to perform. Because of this,
and insurance contract is considered? - ANSWER:A:unilateral
Q:The power given to an individual producer that is not specifically address in his/her contract is
considered what type of authority? - ANSWER:A: implied authority
Q:The deeds and actions of a producer indicate what kind of authority? - ANSWER:A:Apparent
Q:What are an applicant's statements concerning occupation, hobbies, and personal health history
regarded as? - ANSWER:A:representations (Statements by an applicant concerning personal health
history, family health history, occupation, and hobbies are referred)
Q:What is implied authority defined as? - ANSWER:A: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
Q:Bob and Tom start a business. Since each partner contributes an important element to the success of
the business, they decide to take life insurance policies out on each other, and name each other as
beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies
continue in force with no change. Both partners are still married at the time of Bob's death. In this
situation, who will receive Bob's policy proceeds? - ANSWER:A:Tom". Insurable interest only has to exist
at the time of the application, not at the time of the claim. Being there was no change in beneficiary
prior to Bob's death, Tom will still receive the policy proceeds.
Q:According to life insurance contract law, insurable interest exists - ANSWER:A:at the time of
application". According to life insurance in contract law, a person most likely will have an insurable
interest in insuring a person's life if at the time of application
, Q:Which of the following BEST describes a conditional insurance contract? - ANSWER:A:A contract that
requires certain conditions or acts by the insured individual
Q: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". -
ANSWER:A:Consideration clause
Q:What makes an insurance policy a unilateral contract? - ANSWER:A:only the insurer makes legally
enforceable promises in the contract
Q:Who is responsible for assembling the policy forms for insureds? - ANSWER:A:"Insurance carriers
Q:The authority granted to a licensed producer is provided via the - ANSWER:A:Law of Agency".
According to the Law of Agency, the producer/agent represents the principal/insurer and is granted
actual, implied and apparent authority to act on behalf of the insurer. The Law of Agency makes the
principal responsible for these acts of the agent.
Q:In an insurance contract, the element that shows each party is giving something of value is called -
ANSWER:A:Consideration
Q:The term which describes the fact that both parties of a contract may NOT receive the same value is
referred to as - ANSWER:A: Aleatory
Q:Insurable interest does NOT occur in which of the following relationships? - ANSWER:A:Business
owner and business client
Q:In order for a contract to be valid, it must - ANSWER:A:contain an offer and acceptance
Q:Ambiguities in an insurance policy are always resolved in favor of the - ANSWER:A:insured
Q:A limited payment whole life policy provides - ANSWER:A:Lifetime protection".
Q:Which policy feature makes a universal life policy different from a whole life policy? - ANSWER:A:A
flexible premium schedule
Q: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. What kind of
policy is this? - ANSWER:A:equity index whole life
Q:Which type of life insurance policy pays the face amount at the end of the specified period if the
insured is still alive? - ANSWER:A:"Endowment policy
Q:What types of life insurance are normally used for key employee indemnification - ANSWER:A:term,
whole, and universal life insurance
Q:A Modified Endowment Contract (MEC) is best described as - ANSWER:A:A life insurance contract
which accumulates cash values higher than the IRS will allow
Q:What is the automatic continuance of insurance coverage referred to as? - ANSWER:A:renewal
Q:What is a corridor in relation to a Universal Life insurance policy? - ANSWER:A:The gap between the
total death benefit and the policy's cash value
