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A) Competent parties 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. This is an example of: An example of unfair discrimination would be, When an insurer charges a higher rate for insurance based on an insureds race, religion, or national origin, Fixed period settlement options are considered to be a form of a(n). Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. Anheuser-Busch InBev is trying to reduce its water usage. warranty guarantee representation collateral, there must be legal reasons for entering into the contract, Legal purpose is a term used in contract law meaning there must be an offer and acceptance the contract must be aleatory there must be legal reasons for entering into the contract the contract must be a contract of adhesion, In an insurance contract, the element that shows each party is giving something of value is called offer acceptance consideration purpose, What makes an insurance policy a unilateral contract? A) One party is restored to the same financial position the party was in before the loss occurred. Asked 10/6/2017 7:04:21 AM. Which of the following BEST describes a conditional insurance contract? unilateral, Ambiguities in an insurance policy are always resolved in favor of the B) Period to which the coverage exists Waiver of premium Juvenile waiver Guaranteed insurability Payor benefit, Which of the following is a reinstatement condition? definitions conditions, Legal purpose is a term used in contract law meaning 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 D) only when determined by a judge, Xcel Chapter 3 Legal Concepts of the Insuranc, Chapter 3 Exam - Legal Concepts of the Insura, Chapter 4 Exam - Life Insurance - Types of Po, 4 - (Questions) Life Insurance Policies - Pro, Chapter 5: Life Insurance Premiums, Proceeds,, Chapter 4: Type of Insurance Policies Part 1, Chapter 4: Policy Provisions, Options and Rid, Calculus for Business, Economics, Life Sciences and Social Sciences, Karl E. Byleen, Michael R. Ziegler, Michae Ziegler, Raymond A. Barnett, Fundamentals of Engineering Economic Analysis, David Besanko, Mark Shanley, Scott Schaefer, The Cultural Landscape: An Introduction to Human Geography, AP Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, Unit 7 AP Env. A) A contract that requires certain conditions or acts by the insured individual After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. D) Business owner and business client, Under a contract of adhesion, WINDOWPANE is the live-streaming app for sharing your life as it happens, without filters, editing, or anything fake. All of these are typically sources of underwriting information for life or health insurance EXCEPT. Are you looking for the correct answer to the question Which of the following BEST describes a conditional insurance contract?? written contract Plot this function and determine if she is ready to attempt the Bluenose Marathon. A) Legal In this situation, who will receive Bob's policy proceeds? Eventually, they retire and dissolve the business. Pay owns a 20-pay life policy with a paid-up dividend option. Which of these features are held exclusively by variable universal life insurance? A policy containing exclusions or limits that are not clearly disclosed to the policyholder, or a premium that is significantly higher than the risk covered, could be considered unfair or one-sided. Bob dies 12 months later. A contract that requires certain conditions or acts by the insured individual This means that the insurer's promise to pay benefits depends on the occurrence of an event covered by the contract. Updated 10/6/2017 9:10:03 AM. What guarantees that the statements supplied by an insurance applicant are true? This rider is called a(n). Parent and children A) Unilateral Net death benefit will be reduced if the loan is not repaid No interest will be charged on loan balance Term life policies are the only type of insurance that allows policy loans A loan can be taken out for up to the face amount of the policy, Ownership of a life insurance policy may be temporarily transferred with a(n) collateral assignment absolute assignment transferable assignment beneficiary assignment, provide evidence of insurability to the insurer, In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST remit all past-due premiums within the grace period provide evidence of insurability to the insurer resubmit a new life insurance application provide a valid reason for the lapse, Which of the following is considered to be an alternative to a life settlement? What kind of policy is this? d. a deductible stated in the policy's provision. The policies continue in force with no change. Incontestable period Probation period Reinstatement period Grace period, The benefit can be offered as a rider at a specific extra cost or may be at no cost, Which of these is NOT a characteristic of the Accelerated Death Benefit option? A) warranty AzAnswer team is here with the right answer to your question. D) unilateral, Who is responsible for assembling the policy forms for insureds? issuance of the policy B) Offer and acceptance C) A contract where one party "adheres" to the terms of the contract. Authority given to handle claims and process payments Increasing Term Life policy Nonparticipating policy Modified Whole Life policy Universal Life policy, What is the automatic continuance of insurance coverage referred to as? implied authority Within how many days must a licensee notify the Commissioner of a change in address? Legal Consideration Competent parties Countersignature, A contract that requires certain conditions or acts by the insured individual, Which of the following BEST describes a conditional insurance contract? B) the insurer's obligations are dependent upon certain acts of the insured individual His insurance agent told him the policy would be paid up if he reached age 100. 2003-2023 Chegg Inc. All rights reserved. Which of the following does a producer NOT have a fiduciary responsibility to? In this situation, who will receive Bob's policy proceeds? C) Implied 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? Which of the following Best Describes a Conditional Insurance Contract Posted on April 19, 2022 by Ephori London To be enforceable, a contract must be concluded by the competent parties. When does a life insurance policy typically become effective? the terms must be accepted or rejected in full D) A contract where only one party makes any kind of enforceable contract, A) A contract that requires certain conditions or acts by the insured individual, All of the following are elements of an insurance policy EXCEPT Both partners are still married at the time of Bob's death. A) fiduciary bond This legal agreement requires prior performance of another agreement or clause in order to be enforceable. The policy may be paid up early by using accumulated cash values The policy may be paid up early by using policy dividends The policy's premiums will increase after 20 years The policy's cash values steadily decrease after 20 years, the policy would be payable, minus the premium amount, If an insured dies during the grace period with no premiums paid the policy would be payable, minus the premium amount the policy would be payable only after the beneficiary makes past due premium payment all past premiums will be refunded with interest the claim would be denied, In what part of an insurance policy are policy benefits found? Policyowner may increase or decrease the premium payments Policyowner may increase or decrease the face amount Policyowner can contribute large sums of money Policyowner has the right to select the investment which will provide the greatest return, All of the following riders can increase the death benefit amount EXCEPT Cost of Living Waiver of Premium Accidental Death Rider Guaranteed Insurability, Which of these is NOT considered to be a common life insurance nonforfeiture option? Eventually, they retire and dissolve the business. Which of the following BEST describes a conditional insurance contract? Loan against the cash value Policy withdrawal Policy dividend Death benefit, A business will typically use which type of life insurance to cover their employees? Only the insured can change the provisions D) legal reserve, In an insurance contract, the element that shows each party is giving something of value is called Proof of insurabiilty Changes in the insuring clause Premium increase Premium decrease, What is the name of the provision which states that a copy of the application must be attached to the policy when issued? A) the appearance of authority an insurer gives to its agent D) Consideration, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? Sister and brother Parent and children Business partners Business owner and business client, The deeds and actions of a producer indicate what kind of authority? Field underwriting performed by the producer involves, Completing the application and collecting initial premium, An employee under a group insurance policy has the right to name a beneficiary and the right to, Convert to an individual policy in the event of employment termination. 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? A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification? A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? 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. Adjustable universal life policy Flexible universal life policy Variable universal life policy Modified universal life policy, Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Rob recently died at age 60. The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? The insurers obligation to pay a death benefit upon an approved death claim. If the other agreement or condition is performed, then the conditional contract is . Conditional, Under a contract of adhesion, How often must the Commissioner examine each domestic insurance company? C) The insured and the insurer contribute equally to the contract. producer's apparent authority A) Unilateral contract With a life insurance contract, the insurer binds itself to pay a certain sum upon the death of the insured. Aleatory Contract: A contract type in which the parties involved do not have to perform a particular action until a specific event occurs. express authority One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. To see this page as it is meant to appear, please enable your Javascript! Insurable interest Insurance exchanges Law of large numbers and risk pooling Population table data, People with higher loss exposure have the tendency to purchase insurance more often than those at average risk. A) Express authority A) Parties involved in the contract D) Utmost good faith, What does the insurance term "indemnity" refer to? B) Indemnity B) Consideration Restoring an insured to the same condition as before a loss is an example of the principle of. Which of the following BEST describes a conditional insurance contract? One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. 30 seconds. Which of these is considered to be a disadvantage of owning this type of annuity? c. income earned by Pat's spouse. In this situation, who will receive Bob's policy proceeds? What is created after policy proceeds are obtained in a lump sum and then immediately invested? B) premium only A) estoppel 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. 3. How soon can the benefit payments begin with a deferred annuity? Corporations, like all firms, can raise money by borrowing from banks and other lending institutions. 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? Premiums paid plus interest earned is returned to the beneficiary. Lisa has recently bought a fixed annuity. B) errors and omissions Science Study Guide Questions. Adjustable life policy Modified life policy Endowment policy Universal life policy, How are survivorship life insurance policies helpful in estate planning? (B) Both parties adhere to the contract. In order for a contract to be valid, it must. Loans obtained by a policyowner against the cash value of a life insurance policy. Only the insured is legally bound, 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 Which of the following statements about aleatory contracts is NOT true? A contract that requires certain conditions or acts by the insured individual This means that the insurer's promise to pay benefits depends on the occurrence of an event covered by the contract. A. A) implied authority In exchange, the policyowner pays premiums. Insurable interest can be based on the love and affection of individuals related by blood or law An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of underwriter, Life Insurance Policies - Provisions, Options, Fundamentals of Financial Management, Concise Edition, Micro Oneliners: Urinary Tract Infections (UT. the contract is voidable upon proof of fraud. insurer Countersignature, Which of the following is an example of the insured's consideration? A life insurance contract guarantees to the beneficiary not only a death benefit, but a payment of a sum of money in perpetuity, called a death benefit for that purpose of insurance coverage. B) Implied authority Who is responsible for assembling the policy forms for insureds? Andy the annuitant dies before the annuity start date. B) producer B) at the time of application A minimum of 12 months after date of purchase, Insurance premium is determined by each of the following factors EXCEPT. State Insurance Departments NAIC Insurance carriers Insurance producers, Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) estoppel concealment adhesion misrepresentation, The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? What kind of policy is this? Definition refers to a description which is given to a word, idea or phenomenon . An insurer exaggerating its dividends in a magazine advertisement. B) Contract of adhesion According to the Affordable Care Act (ACA), insurers can no longer deny health coverage due to pre-existing conditions unless that plan is a (n) Grandfathered plan Accident plan Individual plan Group plan Grandfathered plan After being properly appointed by the insurer. D) Only the insured is legally bound, Bob and Tom start a business. Accumulation at Interest Option Cash Dividend Option Paid-Up Additions Option One-Year Term Dividend Option, The policy may be paid up early by using policy dividends, Pat owns a 20-pay life policy with a paid-up dividend option. The face amount and premium will remain constant over the 10-year period. 0 Answers/Comments. D) Consideration clause, When the principal gives the agent authority in writing, it's referred to as The amount of his disability income payments for an on-the-job injury may be reduced by. Which of the following best describes how you analyze a fiction text? The policies continue in force with no change. What is this called? C) Law of Agency performance is conditioned upon a future occurrence. Guaranteed Insurability rider Family term insurance rider Family whole insurance rider Payor benefit rider, A partial surrender is allowed in which of the following life policies? acceptance a) a conditional acceptance allows the parties to negotiate the definite terms of the contract upon the completion of the contract. Intentional withholding of material facts that would affect an insurance policy's validity is called a(n). c) a contract must be in writing. Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value, Which type of policy combines the flexibility of a universal life policy with investment choices? A) A contract that requires certain conditions or acts by the insured individual. B) guarantee D) Principal Capacity, A unilateral contract is one in which Which of the following statements is TRUE? It allows for a spouse to be added as a rider to a life insurance policy It allows for policy loans to be advanced to the insured in the event of unemployment It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill It allows for a third party to purchase a life insurance policy at a discounted rate and immediately advance a portion of the death benefit, All of these are standard exclusions found in a life insurance policy EXCEPT hazardous occupations aviation disability war, Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue? B) Bob's estate This is called risk retention preexisting conditions law of large numbers adverse selection, What is known as the immediate specific event causing loss and giving rise to risk? Nothing $100,000 $250,000 $500,000, Which type of life insurance is normally associated with a Payor Benefit rider? B) 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 _______ is the authority given to a producer to transact business on behalf of the insurer.