FX INSURANCE FINAL PAPER 2025/2026 QUESTIONS AND
ANSWERS GUARANTEE A+
✔✔Apparent Authority - ✔✔AKA Perceived; refers to a situation where a reasonable
third party would believe an agent had certain powers (i.e. using the insurer's stationary,
applicant believes the agent is authorized to transact business on the insurer's behalf)
✔✔Fiduciary Responsibility - ✔✔Being in position of trust
✔✔Elements of a Legal Contract - ✔✔Agreement (offer and acceptance), consideration,
competent parties, and legal purpose
✔✔Offer - ✔✔Element of a legal contract; applicant does this when submitting the
application
✔✔Acceptance - ✔✔Element of a legal contract; when an insurer approves of an offer
in its exact terms and issues a policy
✔✔Consideration - ✔✔Element of a legal contract; something of value that each party
gives to each other
✔✔Competent Parties - ✔✔Element of a legal contract; legal age, metally competent,
not under the influence of drugs or alcohol
✔✔Legal Purpose - ✔✔Element of a legal contract; not against public policy
✔✔Indemnity - ✔✔To restore, but not allow profit from a loss
✔✔Representations - ✔✔Statements believed to be true to the best of one's knowledge,
but are not guaranteed to be true
✔✔Misrepresentation - ✔✔An untrue statement
✔✔Material Misrepresentation - ✔✔An untrue statement that would alter the
underwriting decision
✔✔Fraud - ✔✔Making an untrue statement with the intention of altering the underwriting
decision; to deceive or cheat a party
✔✔Warranty - ✔✔Absolutely true statement upon which the validity of the insurance
policy depends
✔✔Concealment - ✔✔Withholding of information of a material fact that i scrucial in
making a decision
, ✔✔Coinsurance - ✔✔An agreement between an insurer and insured in which both are
expected to pay a certain portion of the loss
✔✔Comprehensive Coverage - ✔✔Health insurance that provides protection for most
types of medical expenses
✔✔Copayment - ✔✔An arrangement in which an insured must pay a specified amount
for services "up front"
✔✔Deductible - ✔✔The portion of the los that is to be paid by the insured before any
claim may be paid by the insurer
✔✔Insolvent - ✔✔Unable to meet financial obligations
✔✔Pre-Existing Conditions - ✔✔Ailments or injuries for which an insured has recieved
diagnosis, advice, care, or treatement for prior to the application for health coverage
✔✔Riders - ✔✔Added to the basic policy to modify or delete policy provisions
✔✔Accidental Death and Dismemberment Policy - ✔✔Only pays for accidental losses,
not sicknesses; prinicipal sum for death (within 90 days of accident) and loss of two or
more limbs, capital for partial dismemberment
✔✔Hospital Indemnity Policy - ✔✔Provides a specific amount on a daily, weekly, or
monthly basis; payment is based only on the number of days confined in a hospital
✔✔Dread Disease Policy - ✔✔AKA Limited risk policy; provides benefits for a specific
ailment (such as cancer); benefits usually paid as a scheduled or fixed-dollar amount
✔✔Critical Illness Policy - ✔✔Covers multiple serious illnesses (such as heart attack,
stroke, renal failure) and pays a lump-sum benefit upon the diagnosis and survival of
covered illness
✔✔Vision and Hearing Care - ✔✔Coverage provided by some employers under a group
health insurance policy; covers eye exams, glasses, or hearing aids on a limited basis
✔✔Adverse Selection - ✔✔Fact that those who most need insurance will seek it out
✔✔Entire Contract - ✔✔The policy, application, and any additional riders become this
✔✔Conditional Receipt - ✔✔Provided to the applicant when the initial premium is paid
at the time of the application; ensures that upon policy approval, coverage will be
effective as of the date of this
ANSWERS GUARANTEE A+
✔✔Apparent Authority - ✔✔AKA Perceived; refers to a situation where a reasonable
third party would believe an agent had certain powers (i.e. using the insurer's stationary,
applicant believes the agent is authorized to transact business on the insurer's behalf)
✔✔Fiduciary Responsibility - ✔✔Being in position of trust
✔✔Elements of a Legal Contract - ✔✔Agreement (offer and acceptance), consideration,
competent parties, and legal purpose
✔✔Offer - ✔✔Element of a legal contract; applicant does this when submitting the
application
✔✔Acceptance - ✔✔Element of a legal contract; when an insurer approves of an offer
in its exact terms and issues a policy
✔✔Consideration - ✔✔Element of a legal contract; something of value that each party
gives to each other
✔✔Competent Parties - ✔✔Element of a legal contract; legal age, metally competent,
not under the influence of drugs or alcohol
✔✔Legal Purpose - ✔✔Element of a legal contract; not against public policy
✔✔Indemnity - ✔✔To restore, but not allow profit from a loss
✔✔Representations - ✔✔Statements believed to be true to the best of one's knowledge,
but are not guaranteed to be true
✔✔Misrepresentation - ✔✔An untrue statement
✔✔Material Misrepresentation - ✔✔An untrue statement that would alter the
underwriting decision
✔✔Fraud - ✔✔Making an untrue statement with the intention of altering the underwriting
decision; to deceive or cheat a party
✔✔Warranty - ✔✔Absolutely true statement upon which the validity of the insurance
policy depends
✔✔Concealment - ✔✔Withholding of information of a material fact that i scrucial in
making a decision
, ✔✔Coinsurance - ✔✔An agreement between an insurer and insured in which both are
expected to pay a certain portion of the loss
✔✔Comprehensive Coverage - ✔✔Health insurance that provides protection for most
types of medical expenses
✔✔Copayment - ✔✔An arrangement in which an insured must pay a specified amount
for services "up front"
✔✔Deductible - ✔✔The portion of the los that is to be paid by the insured before any
claim may be paid by the insurer
✔✔Insolvent - ✔✔Unable to meet financial obligations
✔✔Pre-Existing Conditions - ✔✔Ailments or injuries for which an insured has recieved
diagnosis, advice, care, or treatement for prior to the application for health coverage
✔✔Riders - ✔✔Added to the basic policy to modify or delete policy provisions
✔✔Accidental Death and Dismemberment Policy - ✔✔Only pays for accidental losses,
not sicknesses; prinicipal sum for death (within 90 days of accident) and loss of two or
more limbs, capital for partial dismemberment
✔✔Hospital Indemnity Policy - ✔✔Provides a specific amount on a daily, weekly, or
monthly basis; payment is based only on the number of days confined in a hospital
✔✔Dread Disease Policy - ✔✔AKA Limited risk policy; provides benefits for a specific
ailment (such as cancer); benefits usually paid as a scheduled or fixed-dollar amount
✔✔Critical Illness Policy - ✔✔Covers multiple serious illnesses (such as heart attack,
stroke, renal failure) and pays a lump-sum benefit upon the diagnosis and survival of
covered illness
✔✔Vision and Hearing Care - ✔✔Coverage provided by some employers under a group
health insurance policy; covers eye exams, glasses, or hearing aids on a limited basis
✔✔Adverse Selection - ✔✔Fact that those who most need insurance will seek it out
✔✔Entire Contract - ✔✔The policy, application, and any additional riders become this
✔✔Conditional Receipt - ✔✔Provided to the applicant when the initial premium is paid
at the time of the application; ensures that upon policy approval, coverage will be
effective as of the date of this
