Texas Life and Health Insurance | Updated
Essential Questions & Answers | 100% Correct
(Verified)
• insurance -✓✓transfer of risk
• agent -✓✓producer or field underwriter
• insurer -✓✓principle
• agency contract -✓✓between agent and insurer- spells out each one's duties-
contains the express authority
• applicant/proposed insured -✓✓seeks insurance from insurer
• death benefit -✓✓face amount- paid to beneficiary
• beneficiary -✓✓receives the policy proceeds when insured dies- doesn't have to
sign contract
• policyowner -✓✓has all rights and privileges in a policy-pays premium, making
changes, naming beneficiary- may or may not be insured
• 3rd party ownership -✓✓insured and policyowner are different people-
parent/child; key person; group life/health
• application -✓✓main source of underwriting
• agent report -✓✓part of the application process, but does not become part of
contract
• entire contract -✓✓application, policy, riders, amendments
• representations -✓✓statements made by applicant believed to be true but not
guaranteed
,• misrepresentations -✓✓lies told by applicant
• warranty -✓✓absolutely true statement
• fraud in life -✓✓after 2 years claim cannot be denied (Period of Incontestability)
• fraud in health -✓✓claim can be denied as long as policy in force (material)
• conditional receipt -✓✓given to insureds who pay premium with application
• life policy replacement -✓✓stop paying on one policy and start paying on a new
one
• health policy replacement -✓✓don't cancel old policy till new one is issued
• disclosure authorization notice -✓✓states the insurers practice regarding the
collection of personal information
• HIV testing -✓✓results only known to: insured, their doctor, insurer, dept of
health and human services
• policy summary -✓✓summarizes features and elements of policy being issued
• buyers guide -✓✓explain how buyer should go about choosing type and amount
of insurance- given at time of application
• USA patriot act -✓✓anti-money laundering- 9/11- must file suspicious activity
report within 30 days of initial discovery
• underwriting -✓✓risk classification process
• insurable interest -✓✓policyowner must face the possibility of losing money or
something of value in the event of loss- exists at time of application- between
owner and insured-
• paramedical exam -✓✓results give current health status
, • attending physician statement -✓✓gives past health information
• (MIB) medical information bureau -✓✓adverse medical info- made up of
insurers- non-profit organization
• consumer reports -✓✓credit reports, employment records, character, reputation,
habits
• investigative consumer report -✓✓interview friends, associates, neighbors- must
be notified within 3 days report is taking- 5 days to get info to consumer
• fair credit reporting act -✓✓ensures records are confidential, accurate, relevant,
properly used- allows consumer to contact reporting agency to get info on why
they got declined- cant get info from insurer- fine for violating is $2,500
• standard risk -✓✓representative of majority of people in the same class- covered
at a standard rate
• substandard risk -✓✓high risk because health issues- rated up/ pays more money-
must sign statement of good health, amendment, and pay extra premium
• preferred risk -✓✓healthier lifestyle- pays lower premium than substandard
• STOLI/IOLI -✓✓taking out policy on a person with intent of selling it to a 3rd
party- violates concept of insurable interest
• consideration -✓✓something of value each party promises to each other- answers
on the application, promising to pay in event of loss
• legal purpose -✓✓insurable interest, consent, must be of age, not high or drunk,
mentally competent
• conditional -✓✓certain conditions must be met by both parties
• unilateral -✓✓only one of the parties is legally bound
• adhesion -✓✓take it or leave it
Essential Questions & Answers | 100% Correct
(Verified)
• insurance -✓✓transfer of risk
• agent -✓✓producer or field underwriter
• insurer -✓✓principle
• agency contract -✓✓between agent and insurer- spells out each one's duties-
contains the express authority
• applicant/proposed insured -✓✓seeks insurance from insurer
• death benefit -✓✓face amount- paid to beneficiary
• beneficiary -✓✓receives the policy proceeds when insured dies- doesn't have to
sign contract
• policyowner -✓✓has all rights and privileges in a policy-pays premium, making
changes, naming beneficiary- may or may not be insured
• 3rd party ownership -✓✓insured and policyowner are different people-
parent/child; key person; group life/health
• application -✓✓main source of underwriting
• agent report -✓✓part of the application process, but does not become part of
contract
• entire contract -✓✓application, policy, riders, amendments
• representations -✓✓statements made by applicant believed to be true but not
guaranteed
,• misrepresentations -✓✓lies told by applicant
• warranty -✓✓absolutely true statement
• fraud in life -✓✓after 2 years claim cannot be denied (Period of Incontestability)
• fraud in health -✓✓claim can be denied as long as policy in force (material)
• conditional receipt -✓✓given to insureds who pay premium with application
• life policy replacement -✓✓stop paying on one policy and start paying on a new
one
• health policy replacement -✓✓don't cancel old policy till new one is issued
• disclosure authorization notice -✓✓states the insurers practice regarding the
collection of personal information
• HIV testing -✓✓results only known to: insured, their doctor, insurer, dept of
health and human services
• policy summary -✓✓summarizes features and elements of policy being issued
• buyers guide -✓✓explain how buyer should go about choosing type and amount
of insurance- given at time of application
• USA patriot act -✓✓anti-money laundering- 9/11- must file suspicious activity
report within 30 days of initial discovery
• underwriting -✓✓risk classification process
• insurable interest -✓✓policyowner must face the possibility of losing money or
something of value in the event of loss- exists at time of application- between
owner and insured-
• paramedical exam -✓✓results give current health status
, • attending physician statement -✓✓gives past health information
• (MIB) medical information bureau -✓✓adverse medical info- made up of
insurers- non-profit organization
• consumer reports -✓✓credit reports, employment records, character, reputation,
habits
• investigative consumer report -✓✓interview friends, associates, neighbors- must
be notified within 3 days report is taking- 5 days to get info to consumer
• fair credit reporting act -✓✓ensures records are confidential, accurate, relevant,
properly used- allows consumer to contact reporting agency to get info on why
they got declined- cant get info from insurer- fine for violating is $2,500
• standard risk -✓✓representative of majority of people in the same class- covered
at a standard rate
• substandard risk -✓✓high risk because health issues- rated up/ pays more money-
must sign statement of good health, amendment, and pay extra premium
• preferred risk -✓✓healthier lifestyle- pays lower premium than substandard
• STOLI/IOLI -✓✓taking out policy on a person with intent of selling it to a 3rd
party- violates concept of insurable interest
• consideration -✓✓something of value each party promises to each other- answers
on the application, promising to pay in event of loss
• legal purpose -✓✓insurable interest, consent, must be of age, not high or drunk,
mentally competent
• conditional -✓✓certain conditions must be met by both parties
• unilateral -✓✓only one of the parties is legally bound
• adhesion -✓✓take it or leave it
