c. income earned by Pat's spouse. Sorry, you have Javascript Disabled! An individual who removes the risk of losing money in the stock market by never purchasing stocks is said to be engaging in. 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? To see this page as it is meant to appear, please enable your Javascript! discreet apparent implied express, Bob and Tom start a business. A policyowner can receive a percentage payment of the death benefits prior to death by using what kind of contract? 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. Contestability clause, In order for a contract to be valid, it must The automatic premium loan provision authorized an insurer to withdraw from a policys cash value the amount of, Past due premiums that have not been paid by the end of the grace period. An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. The death benefit would be. C) Aleatory What is the difference between insurance condition and warranty? __________. 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. A (D) Only one party is legally bound to the contract. If she dies 15 years after the policy's inception date, how much will her beneficiary receive? Which of the following statements is true? 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? An applicants character and personal habits can be obtained for underwriting purposes from which source? Express Apparent Implied Conditional, The type of multiple protection coverage that pays on the death of the last person is called a(n) joint life policy survivorship life policy annuity joint policy dual life policy, A nonforfeiture option can be used to increase the death benefit, All of these are valid options for an Adjustable Life Policy EXCEPT The policy's premium can be increased or decreased The policy's death benefit can be increased or decreased A nonforfeiture option can be used to increase the death benefit The policy's protection period can be modified, A life insurance contract which accumulates cash values higher than the IRS will allow, A Modified Endowment Contract (MEC) is best described as A life insurance contract which accumulates cash values higher than the IRS will allow An annuity contract which was converted from a life insurance contract A modified life contract which enjoys all the tax advantages of whole life insurance A life insurance contract where all withdrawals prior to age 65 are subject to a 10% penalty, An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. Which of the following does a producer NOT have a fiduciary responsibility to? Express Intentional withholding of material facts that would affect an insurance policy's validity is called a(n). A) there is an element of chance and potential for unequal exchange of value or consideration for both parties C) Bob's spouse D) Personal contract, The importance of a representation is demonstrated in what rule? Adjustable whole life Universal life Decreasing term life Limited whole life, Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? D) Only the insured is legally bound, Bob and Tom start a business. The policies continue in force with no change. C) Apparent authority Expert answered| selymi |Points 23307|. 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? His insurance agent told him the policy would be paid up if he reached age 100. B) only one party (the insurer) makes any kind of legally enforceable promise Which of the following statements about aleatory contracts is NOT true? C) Indemnity contract A paid premium The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. Group policy Adjustable life policy Whole life policy Endowment policy, A renewable Term Life insurance policy allows the policyowner the right to renew the policy at anytime the policyowner chooses as many times as the policyowner chooses paying the same premium as before the renewal without producing proof of insurability, When a decreasing term policy is purchased, it contains a decreasing death benefit and increasing premiums level premiums decreasing premiums variable premiums, Julie has a $100,000 30-year mortgage on her new home. After first premium is paid, the face amount may be available to the beneficiary, Level premium term life insurance policies, Have premiums that are averaged over the policy period, A policyowner can receive an immediate payment before the insured dies by using a(n), Matt is applying for life insurance and requests a double indemnity rider. Post thoughts, events, experiences, and milestones, as you travel along the path that is uniquely yours. discreet 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? The type of annuity she is seeking is called. 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. they are "take it or leave it" contracts. I hope you got the correct answer to your question. Which of the following BEST describes a conditional insurance contract? The present cash value of the policy equals $250,000. C) Business partners The authority granted to a licensed producer is provided via the 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? A) Unilateral See answers. Period of time after the initial premium is paid and before the policy is issued Period of time it takes for a policy's underwriting to complete Period of time after a policy is issued and before it is delivered to policyowner Period of time after the premium is due but the policy remains in force, Life insurance policies will normally pay for losses arising from commercial aviation war suicide hazardous jobs, A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? Because of this, an insurance contract is considered What would happen if a life insurance applicant is given a conditional receipt? One-sided or unfair insurance contracts can, however, exist if they contain provisions that disproportionately benefit one party. A unilateral contract is one in which only one party makes a legally binding guarantee. Producers act in a(n) ________ capacity when holding insurance premiums. Answer Explanation: A contract that requires certain conditions or acts by the insured individual. A) producer's apparent authority C) The insured and the insurer contribute equally to the contract. _______ is the authority given to a producer to transact business on behalf of the insurer. there is the potential for an unequal exchange of value Before using an assumed name in Utah, a producer MUST, Maria would like an annuity that provides a guaranteed accumulation or payout. 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? Updated 10/6/2017 9:10:03 AM. D) an offer and acceptance of the contract terms, D) an offer and acceptance of the contract terms, In an insurance contract, the applicant's "consideration" is the Which of these would NOT be an unfair claims practice? A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? Under the McCarran-Ferguson Act, what is the minimum penalty for this? Which Of The Following Statements About Personal Selling Is Correct? the policy provides a straight, level $100,000 of coverage for 5 years. Identify the type of financing (stock or bond) that best answers the question. During periods of inflation, annuitants will experience a decrease in purchasing power of their payments. Both partners are still married at the time of Bob's death. acceptance The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. ______ is NOT an element of a valid contract. Which of the following is an annuity that is linked to a market-related index? renewal reinstatement resumption renovation, the MEC tends to be an investment vehicle, Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because the MEC has tax deductible premiums the MEC is considered an illegal product the MEC tends to be an investment vehicle the MEC does not accumulate cash value, The face amount and premium will remain constant over the 10-year period, Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. B) Equal consideration is required between the involved parties The principle of insurable interest, in regards to a life insurance contract, is accurately described in which statement? Child term rider Payor rider Family maintenance rider Family income rider, What happens to the coverage under a children's term rider when that child reaches a certain specified age? Accelerated death benefit An example of an unfair claims practice would be Sister and brother D) the authority to add provisions to a contract, C) the authority to represent the insurer, Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? A) offer A) Insurability D) statements made in the application only, C) statements made in the application and the premium, According to life insurance contract law, insurable interest exists What guarantees that the statements supplied by an insurance applicant are true? Intent, The deeds and actions of a producer indicate what kind of authority? What was his total bill? Who prosecutes crimes that involve the violation of insurance laws that fall under US Code 1033? B) Only the insured can change the provisions Waiver Exclusion Rider Provision, The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n) sickness suicide accident war, An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? A) One party is restored to the same financial position the party was in before the loss occurred. D) Risk insured against, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called A) Make whole C) fiduciary trust Connect with others, with spontaneous photos and videos, and random live-streaming. Dependent term Guaranteed insurability Primary term Family term, Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested? 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? If threats or force is used to affect an insurance transaction, the unfair trade practice of __________ has been committed. b) a contract is an agreement enforceable at law. the insurer's obligations are dependent upon certain acts of the insured individual 2. Bob and Tom start a business. 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) State Insurance Departments promises made Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them? In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. D) legal reserve, In an insurance contract, the element that shows each party is giving something of value is called Rob recently died at age 60. Countersignature, Which of the following is an example of the insured's consideration? ______ is NOT an element of a valid contract. Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies? An insurer's claim settlement practices are regulated by the Securities and Exchange Commission (SEC) National Association of Claims Adjusters (NACA) National Association of Insurance Commissioners (NAIC) State insurance departments, A life insurance company has transferred some of its risk to another insurer. Which option was chosen? Events are those which cannot be controlled by either . Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? B) Consideration Andy the annuitant dies before the annuity start date. Have a great time ahead. In which form of corporate financing is the investor also an owner? C) Materiality of concealment (B) Both parties adhere to the contract. What is this an example of? C) A contract where one party adheres to the terms of the contract 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? All of these are typically sources of underwriting information for life or health insurance EXCEPT. A marathon is 42.2 kilometers. B) other insurance warranty B) conditional Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. Insurer's promise to pay benefits A paid premium Legal purpose Intent, 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, What is implied authority defined as? A life insurance policy that is subject to a contract interest rate is referred to as. A symbol is a mark, sign or word that indicates, signifies, or is understood as representing an idea, object, or relationship, best describes a symbol. C) apparent authority 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? 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). 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) estoppel apparent Only the insurance company has legal obligations. Orissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. D) Consideration, What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? What is this called? Premiums paid plus interest earned is returned to the beneficiary. Describe the structure. Julie has a $100,000 30-year mortgage on her new home. C) consideration Eventually, they retire and dissolve the business. Assume that the product will be tested on 202020 randomly selected stained garments, and let xxx denote the number of these garments from which the stains will be completely removed. A) voidable B) A contract that has the potential for the unequal exchange of consideration for both parties What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period? All of the following statements about Carl's coverage are correct. What is a corridor in relation to a Universal Life insurance policy? Consideration Which of the following BEST describes a conditional insurance contract? An unintentional violation of Utah insurance law could lead a producer to a fine of up to _____ per violation. An example of an unfair claims settlement practice is, Turning down a claim without providing the basis of denial. Competent parties The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. An individual who has a hobby racing cars once a month. Premium clause Consideration clause Adhesion clause Contestability clause, When the principal gives the agent authority in writing, it's referred to as express authority implied authority apparent authority imposed authority, Ambiguities in an insurance policy are always resolved in favor of the insured producer insurer underwriter, ______ is NOT an element of a valid contract. Which of the following BEST describes a conditional insurance contract? D) misrepresentation, Which of the following is NOT required in the content of a policy? contain an offer and acceptance, In an insurance contract, the insurer is the only party legally obligated to perform. Adjustable life insurance Decreasing term insurance Increasing term insurance Modified life insurance, A spouse and child can be added to the primary insured's coverage as what kind of rider? Connect the text to your own experiences. Because of this, an insurance contract is considered In this situation, who will receive Bob's policy proceeds? Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed in Ken? Preferred risk policies with reduced premiums are issued by insurance companies because the insured has, Better than average mortality or morbidity experience. In exchange, the policyowner pays premiums. Which of the following would be an act of Unfair Discrimination by an insurer? The provision that allows this is called Partial Surrender Subrogation Automatic Premium Loan Accelerated Death Benefit, All of these are characteristics of a universal life insurance policy EXCEPT Flexible death benefit Fixed surrender value Flexible premiums Builds cash value, Which of the following policies does NOT build cash value? Which of the following BEST describes a conditional insurance contract? Authority given to handle claims and process payments C) negotiation between the involved parties A) there is the potential for an unequal exchange of value When initial premium is collected and policy is issued. Science Study Guide Questions. The gap between the total death benefit and the policy's cash value The gap between when a claim is filed and when the death benefit is received The amount of interest that has accumulated in the policy's cash value The point in time when the policy's cash value reaches $0, Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? Which of the following is the best descriptive word? 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? Only the insured can change the provisions Log in for more information.