Life and Health Insurance exam|Questions With Correct
Answers|Verified
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
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.
What is the consideration given by an insurer in the consideration clause of a life policy?
- ✔Promise to pay a death benefit to a named beneficiary
All of the following are considered to be typical characteristics describing the nature of
an insurance contract except - ✔bilateral
If a contractor that he's in contains complicated language to whom would the
interpretation be in favor of ? - ✔The insured
Taking receipt of premiums and holding them for the insurance company is an example
of - ✔fudiciary responsibility
Answers|Verified
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
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.
What is the consideration given by an insurer in the consideration clause of a life policy?
- ✔Promise to pay a death benefit to a named beneficiary
All of the following are considered to be typical characteristics describing the nature of
an insurance contract except - ✔bilateral
If a contractor that he's in contains complicated language to whom would the
interpretation be in favor of ? - ✔The insured
Taking receipt of premiums and holding them for the insurance company is an example
of - ✔fudiciary responsibility
