Missouri Life and Health
Insurance Questions and
Verified Correct Answers
Insurance transaction includes: answer - By mail or other means:
- Solicitation
- Negotiation
- Sale
- Advising an individual about coverage
Elements of a legal contract answer - -Agreement (offer and acceptance)
- Consideration
- Competent parties
- Legal purpose
- Negotiation does NOT need to happen
Who make the offer in an insurance application answer - - Applicant
When does acceptance take place answer - - An insurers underwriter approves the application
and issues a policy
The binding force in any contract answer - - Consideration
,- insurer promises to pay in the event of a loss
Contract of adhesion answer - - Prepared by the insurer and accepted or rejected by the
insured
- "Take it or leave it" basis
Insurance contracts are answer - - Aleatory
- exchange of unequal amounts of values
Unilateral contract answer - - only one of the parties is legally bound
- "one-way contract"
"When does an insurance policy go into effect" answer - - When the insured receives it
Conditional contract answer - - certain conditions must be met by the policy owner
Warranty answer - - An absolutely true statement upon upon which the validity of the
insurance policy depends
Representions answer - - Statements believed to be true
Misrepresentation answer - - Untrue statements on the applications
- Can void the contract
Material misrepresentation answer - - Would alter the underwriting decision of insurance
company
,Part 1- General Information answer - - Name, age, address, birth date, gender, income, marital
status, and occupation
Part 2- Medical Information answer - - Medical background, present health
- Medical visits in recent years
- Medical status of relatives/ causes of deaths
Field underwriter answer - - Solicited the potential insured
- Analyzes health
- Gets info on client
Agents report answer - - Observations concerning the proposed insured
- Does not become a part of the entire contract
- communicate with underwriter and provide info about the applicant known by the agent
Required signatures answer - - the proposed insured
- the agent
- the policy owner (if not proposed insured)
Changes in the application answer - - Applicant must initial the change
Consequences of incomplete applications answer - - Must return to applicant for completion
- If a policy is issued with questions left unanswered, the contract will be interpreted as if the
insurer waived its right to have an answer to the question
Premium receipt answer - - Agent must issue
- Will determine when coverage will be effective
, Conditional receipt answer - - effective either on the date of application or medical exam
- Most common type of receipt
- used when applicant submits prepaid application
Replacement answer - - Terminating an existing policy or letting it lapse and obtaining a new
one
- Nothing illegal about replacing life insurance
Underwriting answer - - The risk selection process
- Avoid adverse selection
Adverse selection answer - - Risks which are more likely to suffer a loss
- Protects the insurer
Insurable interest answer - - Must exist between policy owner and insured at time of
application
- Cannot buy on anyone
- Suffer financially if someone dies
Application answer - - Submit an application to the insurer for approval for a policy to be issued
Fair Credit Reporting Act answer - - Consumer-reporting agencies must follow in order to
ensure that records are properly used
- Protects consumers
- Insurance rated by states
- "At the time of application"
Insurance Questions and
Verified Correct Answers
Insurance transaction includes: answer - By mail or other means:
- Solicitation
- Negotiation
- Sale
- Advising an individual about coverage
Elements of a legal contract answer - -Agreement (offer and acceptance)
- Consideration
- Competent parties
- Legal purpose
- Negotiation does NOT need to happen
Who make the offer in an insurance application answer - - Applicant
When does acceptance take place answer - - An insurers underwriter approves the application
and issues a policy
The binding force in any contract answer - - Consideration
,- insurer promises to pay in the event of a loss
Contract of adhesion answer - - Prepared by the insurer and accepted or rejected by the
insured
- "Take it or leave it" basis
Insurance contracts are answer - - Aleatory
- exchange of unequal amounts of values
Unilateral contract answer - - only one of the parties is legally bound
- "one-way contract"
"When does an insurance policy go into effect" answer - - When the insured receives it
Conditional contract answer - - certain conditions must be met by the policy owner
Warranty answer - - An absolutely true statement upon upon which the validity of the
insurance policy depends
Representions answer - - Statements believed to be true
Misrepresentation answer - - Untrue statements on the applications
- Can void the contract
Material misrepresentation answer - - Would alter the underwriting decision of insurance
company
,Part 1- General Information answer - - Name, age, address, birth date, gender, income, marital
status, and occupation
Part 2- Medical Information answer - - Medical background, present health
- Medical visits in recent years
- Medical status of relatives/ causes of deaths
Field underwriter answer - - Solicited the potential insured
- Analyzes health
- Gets info on client
Agents report answer - - Observations concerning the proposed insured
- Does not become a part of the entire contract
- communicate with underwriter and provide info about the applicant known by the agent
Required signatures answer - - the proposed insured
- the agent
- the policy owner (if not proposed insured)
Changes in the application answer - - Applicant must initial the change
Consequences of incomplete applications answer - - Must return to applicant for completion
- If a policy is issued with questions left unanswered, the contract will be interpreted as if the
insurer waived its right to have an answer to the question
Premium receipt answer - - Agent must issue
- Will determine when coverage will be effective
, Conditional receipt answer - - effective either on the date of application or medical exam
- Most common type of receipt
- used when applicant submits prepaid application
Replacement answer - - Terminating an existing policy or letting it lapse and obtaining a new
one
- Nothing illegal about replacing life insurance
Underwriting answer - - The risk selection process
- Avoid adverse selection
Adverse selection answer - - Risks which are more likely to suffer a loss
- Protects the insurer
Insurable interest answer - - Must exist between policy owner and insured at time of
application
- Cannot buy on anyone
- Suffer financially if someone dies
Application answer - - Submit an application to the insurer for approval for a policy to be issued
Fair Credit Reporting Act answer - - Consumer-reporting agencies must follow in order to
ensure that records are properly used
- Protects consumers
- Insurance rated by states
- "At the time of application"
