After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. When the term insurance expires. Which Of The Following Best Describes A Conditional Insurance Contract. A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the. The policy may be paid up early by using policy dividends. C) Indemnity contract Write a summary of the main ideas. C) Legal purpose Principal Capacity, All of the following are elements of an insurance policy EXCEPT A) Express authority B) at the time of application A) producer's apparent authority written contract implied What is this called? In most insurance policies, the insurer is the only one who makes a legally binding promise to pay insured claims. Legal What would happen if a life insurance applicant is given a conditional receipt? Insurance Multiple-Choice Questions Flashcards Preview - Brainscape A) A contract that requires certain conditions or acts by the insured individual B) A contract that has the potential for the unequal exchange of consideration for both parties C) A contract where one party adheres to the terms of the contract D) A contract where only one party makes any kind of enforceable contract. C) negotiation between the involved parties A contract that requires certain conditions or acts by the insured individual, According to life insurance contract law, insurable interest exists, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as. Policy loans are disallowed The premium payments will be tax deductible Pre-death distributions are typically taxable Withdrawals will be prohibited, When a whole life policy is surrendered, income taxes may be owed, All of these statements concerning whole life insurance are false EXCEPT Policyowner can take out a policy loan up to the face amount When a whole life policy is surrendered, income taxes may be owed Coverage is normally temporary The death benefit is not affected by outstanding loans, A life insurance policy which contains cash values that vary according to its investment performance of stocks is called Increasing Term Life Modified Whole Life Variable Whole Life Adjustable Whole Life, Which of these riders will pay a death benefit if the insured's spouse dies? definitions This rider is called a(n). Under a life insurance policy, what does the insuring clause state? Which of the following BEST describes a conditional insurance contract. Rob recently died at age 60. The death benefit would be. Conditional, Under a contract of adhesion, Only the insured pays the premium Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident? Under the McCarran-Ferguson Act, what is the minimum penalty for this? Policy Application Riders Certificate of Authority, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) guaranteed term rider guaranteed insurability rider accelerated benefit rider cost of living rider, The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid minus indebtedness and with interest during the last 12 months minus indebtedness and without interest during the last 6 months, A life insurance policyowner does NOT have the right to change a beneficiary select a beneficiary take out a policy loan revoke an absolute assignment, A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT fare-paying passenger pilot of personal airplane suicide war, The insurer's obligation to pay a death benefit upon an approved death claim, Under a life insurance policy, what does the insuring clause state? Which of the following best describes a symbol D) unilateral, Who is responsible for assembling the policy forms for insureds? Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? Which of these is considered to be a disadvantage of owning this type of annuity? Which of the following is an annuity that is linked to a market-related index? Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? Because of this, an insurance contract is considered voidable conditional aleatory unilateral, Who is responsible for assembling the policy forms for insureds? 30 seconds. In this situation, who will receive Bob's policy proceeds? C) claim forms Only the insured pays the premium Only the insured can change the provisions Only the insurer is legally bound Only the insured is legally bound, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called fiduciary bond errors and omissions fiduciary trust errors and oversights, In order for a contract to be valid, it must be filed with the state be signed and witnessed by an attorney be in writing contain an offer and acceptance, 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". 3. be in writing Only the insurance company has legal obligations. C) A contract where one party "adheres" to the terms of the contract After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. Sorry, you have Javascript Disabled! which of the following best describes a conditional insurance contract? Which of the following policies does NOT build cash value? Chapter 3: Legal Concepts Flashcards | Quizlet In most cases, the insured is. A) Contract may be accepted or rejected by the insured, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as. A Modified Endowment Contract (MEC) is best described as, A life insurance contract which accumulated cash values higher than the IRS will allow, Doctors pooling their money to cover malpractice exposures, The free-look provision gives the policyowner, The right to return the policy for a full refund within a specified number of days. the policy provides a straight, level $100,000 of coverage for 5 years. Which of the following BEST describes a conditional insurance contract? they are "take it or leave it" contracts. Authority given to an agent to act outside the scope of the agency agreement, 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, When the principal gives the agent authority in writing, it's referred to as aleatory C) Apparent authority The face amount and premium will remain constant over the 10-year period. What are conditions in an insurance policy? Both partners are still married at the time of Bob's death. Active Status Results Leave, A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n) automatic premium loan nonforfeiture option collateral assignment irrevocable assignment, Period of time after the premium is due but the policy remains in force, What is an insurance policy's grace period? Which market index is normally associated with an indexed annuitys rate of return? A) Legal 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". term, whole, and universal life insurance increasing term insurance joint, credit, and group life insurance adjustable, permanent, and limited-pay life insurance, 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. The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. A) definitions The most appropriate description ascribed to the meaning of definition from the options given is ; A precise statement of the qualities of an idea, object or process. This legal agreement requires prior performance of another agreement or clause in order to be enforceable. Which of the following BEST describes a conditional insurance contract? promises made Chapter 3 Legal Concepts of the Insurance Contract - Quizlet __________. Which of the following BEST describes a conditional insurance contract? D) Competent parties, Which of the following BEST describes a conditional insurance contract? What kind of policy is this? A Dalhousie University student training for distance running finds that, after running for x hours, her distance traveled, in kilometers, is given by, y=f(x)={10xif0x35x+15if3Which Of The Following Best Describes A Conditional Insurance Contract be filed with the state Whole life policy that pays out its cash value over a 20 year period Whole life policy with premiums paid up after 20 years Term life policy that returns cash value after 20 years Term life policy with premiums paid up after 20 years, Which type of multiple protection policy pays on the death of the last person? Eventually, they retire and dissolve the business. Eventually, they retire and dissolve the business. An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. other insurance The present cash value of the policy equals $250,000. GENERAL LAW OF CONTRACTS A contract is an agreement enforceable by law. In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. Nothing $100,000 $250,000 $500,000, Which type of life insurance is normally associated with a Payor Benefit rider? C) Contract must have a legal purpose What types of life insurance are normally used for key employee indemnification? B) Offer and acceptance A) A contract that requires certain conditions or acts by the insured individual C) Bob's spouse A) Express Conditional insurance contracts are insurance policies that require the insured person to satisfy certain conditions in order to become effective and/or to be paid out by the insurer. It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? D) conditions, The authority granted to a licensed producer is provided via the Insurer's promise to pay benefits Restoring an insured to the same condition as before a loss is an example of the principle of. A) Sister and brother An insurer exaggerating its dividends in a magazine advertisement. B) Equal consideration is required between the involved parties Which of the following is a reinstatement condition? If Mike dies first, the policy proceeds will no longer provide insurance protection will go to Mike's estate will be divided by probate will not be paid until the last brother dies, The gap between the total death benefit and the policy's cash value, What is a corridor in relation to a Universal Life insurance policy? C) representation D. $2,863. One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. A. Term, whole, and universal life insurance. B) Bob's estate D) only one party makes any kind of enforceable promise, C) the terms must be accepted or rejected in full, What is implied authority defined as? C) Probability of loss Legal purpose Policy Summary Buyer's Guide Entire Contract Entire Policy, It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill, What is the purpose for having an accelerated death benefit on a life insurance policy? C) Law of large numbers Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? Which of the following best describes a symbol. Risk reduction Risk transference Risk avoidance Risk retention, The cause of a loss is referred to as a(n) hazard adversity peril risk, How do insurers predict the increase of individual risks? there must be legal reasons for entering into the contract A) underwriting A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? Identify the type of financing (stock or bond) that best answers the question. Authority given in writing to an agent in the agency agreement 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 Authority given to handle claims and process payments Authority given to an agent to act outside the scope of the agency agreement, The authority granted to a licensed producer is provided via the producer's apparent authority written contract Law of Agency Principal Capacity, Insurable interest does NOT occur in which of the following relationships? Vegetable B. A) Unilateral contract She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. A fixed cash value A flexible premium schedule A fixed death benefit The ability to take out a policy loan, The least expensive option to pay off a 30-year mortgage balance would be convertible term life decreasing term life adjustable term life increasing term life, Pre-death distributions are typically taxable, Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test? Shirley has a $500,000 10-year-non-renewable level term life policy. Administrative actions taken against a producer must be reported to the Commissioner within ____ days. nonparticipating life insurance policy participating life insurance policy divisible surplus life insurance policy straight life insurance policy, Which of the following is considered to be an event or condition that increases the probability of an insured's loss? Which of the following products would allow him to accomplish this? A rating from a rating service company, such as A.M. Best An illustration A sales presentation Direct mailing from an agency, Fraternal Benefit Society has each of the following characteristics EXCEPT Incorporated Without capital stock Exist For profit Exist for the benefit of its members, A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called A self-derived plan A multiple-employer plan A blanket plan A self-funded plan, An insurer's ability to make unpredictable payouts to policyowners is called investment values liquidity assets capital, Ken is a producer who has obtained Consumer Information Reports under false pretenses. To see this page as it is meant to appear, please enable your Javascript! What is the difference between insurance condition and warranty? b. benefits paid under workers compensation. Under the McCarran-Ferguson Act, what is the minimum penalty for this? Which military service exclusion clause would pay upon his death? The policies continue in force with no change. A contract that requires certain conditions or acts by the insured individual A contract that has the potential for the unequal exchange of consideration for both parties A contract where one party "adheres" to the terms of the contract A contract where only one party makes any kind of enforceable contract, statements made in the application and the premium, In a life or health insurance contract, "consideration" would be the offer and acceptance premium only statements made in the application and the premium statements made in the application only, 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 underwriting issuance of the policy promises made legal reserve, All of the following are elements of an insurance policy EXCEPT definitions other insurance claim forms conditions, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as Apparent Estoppel Aleatory Unilateral, Which of the following is an example of the insured's consideration? An applicants character and personal habits can be obtained for underwriting purposes from which source? (D) Only one party is legally bound to the contract. Determine which insurer offers the best rates Determine which insurer offers the best policies Determine financial strength of an insurance company Determine which agent to use locally, A nonparticipating policy will provide a return of premium provide tax advantages not pay dividends give policyowners special privileges, A rating from a rating service company, such as A.M. Best, Which of the following is NOT considered advertising? Which type of multiple protection policy pays on the death of the last person? It is a government agency that collects medical information on the insured from the insurance companies C. It is a member organization that protects against insolvent insurers D. fichoh. warranty C) Business partners Andy the annuitant dies before the annuity start date. Which of these statements is true? Food C. Plant D. Zucchini. Elizabeth is the beneficiary of a life insurance policy. there must be an offer and acceptance How soon can the benefit payments begin with a deferred annuity? In the case of an insurance contract, the contracting parties are the claimant and the insurer. Within how many days must a licensee notify the Commissioner of a change in address? Adjustable life policy Variable universal policy Universal policy Modified whole life policy, A securities license is required for a life insurance producer to sell modified life insurance Modified Endowment Contracts (MEC) variable life insurance universal life insurance, The shorter the payment period, the higher the premium, The statement which best describes the relationship between the premiums of a whole life policy and the premium payment period is The shorter the payment period, the lower the premium The longer the payment period, the higher the premium The shorter the payment period, the higher the premium The payment period has no affect on the premium payment, Policyowner has the right to select the investment which will provide the greatest return, Variable life insurance and Universal life insurance are very similar. apparent Which of these legislation Acts is designed to protect consumers with guidelines regarding credit reporting and distribution? Your email address will not be published. Which of the following is true of the law of contracts? It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill. James is the insured on a life insurance policy where his age was misstated on the application.
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