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An overview of various types of insurance policies, including life insurance, commercial insurance, and marine insurance. It covers key concepts such as indemnity, insurable interest, policy territory, and exclusions. The document also discusses the role of insurance in covering aviation risks and the different types of life insurance policies. By analyzing this document, readers can gain a comprehensive understanding of the different insurance products available, the principles underlying insurance contracts, and the factors that determine coverage and payouts. This information can be valuable for individuals and businesses seeking to make informed decisions about their insurance needs and ensure adequate protection against various risks.
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An applicant MUST receive an Outline of Coverage when an application is taken for a(n) ------CORRECT ANSWER---------------Medicare Supplement policy Which mode of payment is NOT used by health insurance policies? ------ CORRECT ANSWER---------------Single Premium What type of life policy covers two people and pays upon the death of the last insured? ------CORRECT ANSWER---------------survivorship During a sales presentation for a participating life insurance policy, an agent MUST ------CORRECT ANSWER---------------make a prospect understand that dividends are NOT guaranteed What is the elimination period of an individual disability policy? ------ CORRECT ANSWER---------------Time period a disabled person must wait before benefits are paid When is the face amount of a Whole Life policy paid? ------CORRECT ANSWER---------------When the insured dies or at the policy's maturity date, whichever happens first
Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires? ------CORRECT ANSWER---------------An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed Medicare is intended for all of the following groups, EXCEPT: ------ CORRECT ANSWER---------------Those enrolled as a full-time student When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following? ------CORRECT ANSWER---------------Residual disability At what point does an informal agreement become a binding contract? ------ CORRECT ANSWER---------------When consideration is provided by one of the parties to the contract An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be: - -----CORRECT ANSWER---------------converted to an individual permanent policy at an individual rate How long can a cash surrender value payment be deferred by the insurance company under the Nonforfeiture Law? ------CORRECT ANSWER---------------6 months
An Evidence of Coverage form may be issued by a Health Maintenance Organization (HMO) after being approved by the ------CORRECT ANSWER---------------commissioner An insurance company organized under New York laws and licensed to do business in Texas is considered a(n) ------CORRECT ANSWER--------------- foreign company If an insurance company issues a Disability income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called ------CORRECT ANSWER--------------- noncancellable Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges? ------CORRECT ANSWER---------------The maximum amount considered eligible for reimbursement by an insurance company under a health plan Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? ------CORRECT ANSWER---------------Legal Purpose (Insurable Interest) in a qualified retirement plan, the yearly contributions to an employee's account: ------CORRECT ANSWER---------------are restricted to maximum levels set by the IRS
Who is NOT required to sign a life insurance application? ------CORRECT ANSWER---------------beneficiary Which of these is NOT considered to be a right given to a policyowner? -----
One becomes eligible for Social Security disability benefits after having been disabled for: ------CORRECT ANSWER---------------5 months Insurance policies are considered aleatory contracts because ------ CORRECT ANSWER---------------performance is conditioned upon a future occurrence What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue it he/she ever becomes totally disabled? ------CORRECT ANSWER---------------Waiver of Premium rider J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of Life Insurance policy is this? ------CORRECT ANSWER---------------Modified Premium Life varable Whole Life Insurance can be described as. ------CORRECT ANSWER---------------both an insurance and securities product This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year. ------CORRECT ANSWER---------------Family maximum deductible
How long does an insurance company appointment remain in force? ------ CORRECT ANSWER---------------Until terminated Susie set fire to her house to collect the insurance. This is an example of a(n) ------CORRECT ANSWER---------------MORAL HAZARDS Henry's tires on his SUV are so worn that the steel belt is showing through the tread. The condition of the tires is known as ------CORRECT ANSWER- --------------PHYSICAL HAZARDS When a driver of an auto breaks the posted speed limit, the driver's liability imposed by the law is known as ------CORRECT ANSWER--------------- ABOSLUTE LIABILITY Under compensatory damages, medical expenses are an example of ------ CORRECT ANSWER---------------SPECIAL damages. Josh attends a hockey game. While at the game he is hit in the head by the hockey puck resulting in a broken cheek bone. Josh immediately sues the hockey team for damages. What might be the most logical defense for the hockey team? ------CORRECT ANSWER---------------ASSUMPTION OF RISK The Smith family is planning to build a new house. They want the house to be constructed entirely of fire resistance materials. This construction type is an example of a ------CORRECT ANSWER---------------FIRE RESISTIVE building.
______contracts are written for a specified amount and they list the value of the insured property as agreed to by both the insured and the insurer at policy inception. ------CORRECT ANSWER---------------VALUED The ABC Company has several business locations. They want to cover all the locations under one policy. They should purchase a(n) ------CORRECT ANSWER---------------BLANKET policy A building has a market value of $100,000, a replacement cost of $80, and a depreciated amount of $25,000. Based on these factors, what is the ACV amount of the building? ------CORRECT ANSWER--------------- ($80,000 - $25,000 = $55,000) Actual cash value, or ACV is usually calculated by determining the item's replacement cost (what it would cost to buy a replacement) and subtracting an amount for depreciation. Here's what it looks like written as a formula: ACV = Replacement Cost - Depreciation Joe has just purchased a new house. He wants to obtain the broadest possible insurance coverage. Joe should purchase a(n) ------CORRECT ANSWER---------------SPECIAL FORMS policy. Which of the following is NOT a method by which an insured can collect for damages? ------CORRECT ANSWER---------------In general, the insured can collect the lesser of: Insurable interest; Policy limits; Actual cash value; Cost to repair; or Replacement cost.
Which one of the following terms can be defined as a policy provision that omits certain risks from coverage? ------CORRECT ANSWER--------------- EXCLUSIONS Joe asked his insurance agent to explain the purpose of the conditions section of his insurance policy. Joe's agent stated that it is used to _____. - -----CORRECT ANSWER---------------Policy conditions Jane has decided to add towing to her current auto policy with the ABC Insurance Company. What must the ABC Insurance Company do to add the requested change to the policy? ------CORRECT ANSWER--------------- ENDORSEMENTS Doug has just received his insurance policy. Where would Doug look to find the applicable deductibles declared in the insurance policy? ------ CORRECT ANSWER---------------DECLARATIONS The XYZ Insurance Company is developing a new auto insurance contract. Which of the following is NOT considered a major component of this insurance contract? ------CORRECT ANSWER---------------The contract does not require the naming of senior officers of the insurance company. Crossroad's commercial insurance coverage is automatically extended to cover newly acquired or constructed locations and personal property covered off-premises within the policy territory. Which is generally NOT covered under the policy territory?. On commercial policies, the policy territory is usually the United States, Canada and Puerto Rico. ------ CORRECT ANSWER---------------
Mark's liability policy has separate limits of liability for both BI and PD. This liability type is an example of ------CORRECT ANSWER---------------SPLIT LIMITS. Earl lives in Iowa. On November 1st, he drives his motor home to Pharr, Texas to reside. He lives in the motor home until March 15th, then returns to his house in Iowa. According to the policy his insured house during his absence is an example of a(n) ------CORRECT ANSWER--------------- UNOCCUPIED property. Jack sends in an auto insurance application with the required premium. The submission of the premium is an example of ------CORRECT ANSWER---------------_CONSIDERATION. Tom has completed an auto insurance application and sent it to the insurance company. Under contract law, the submission of the auto application is a(n) ------CORRECT ANSWER---------------INITIAL OFFER. The ABC Insurance Company has agreed to pay for any auto losses that Bill might have for a one year period in exchange for $1,000 in premium. This is an example of a(n) ------CORRECT ANSWER--------------- CONTRACT. Valid contracts must have a legal purpose and be consistent with public policy. Which of the following situations lacks a legal purpose? ------ CORRECT ANSWER---------------Valid contracts must have a legal purpose and be consistent with public policy. This is why insurance does not cover
intentional or criminal actions, why every insured must have an insurable interest, and why a thief cannot insure stolen property. Under the law, a party to a contract must give something of value to the other party Which of the following is NOT an example of consideration? ---- --CORRECT ANSWER---------------GIFT Kathy, a 16 year old high school student, just purchased a new car. She went to her dad's insurance agent and made an application for her own auto insurance policy. The insurance company's underwriter noted Kathy's age and it caused him to reject her application. The rejection was based on the fact that ------CORRECT ANSWER---------------NOT LEGALLY COMPETENT TO ENTER INTO CONTRACT. A(n) _________is a legal agreement between two competent parties that promises a certain performance in exchange for a certain consideration. - --- --CORRECT ANSWER---------------CONTRACT Sam has a fire insurance policy on his house. He sold the house to Jack. His fire policy is a personal contract. If the house is destroyed after the sale what will Sam receive from his fire policy? ------CORRECT ANSWER--------- ------NOTHING, NO INSURABLE INTEREST Cory has submitted an application for auto coverage to the Texas Auto Insurance Company. The Texas Auto Insurance Company issues Cory their standard auto policy. Cory accepts the policy and pays the required premium. This policy is considered to be aleatory because ------CORRECT ANSWER---------------PERFORMANCE DEPENDS ON THE OCCURRENCE OF AN UNCERTAIN EVENT.
The legal definition of _________is the intentional relinquishment of a known right. ------CORRECT ANSWER---------------WAIVER When Bob, the insurance applicant, was asked about his driving record, he intentionally withheld his arrest for manslaughter. This is an example of -----
An auto insurance policy is an example of a contract governed by - ----- CORRECT ANSWER---------------COMMON LAW. Which of the following statements best illustrates the principle of stare decisis? ------CORRECT ANSWER---------------Matters that are decided by a state's highest court become the common law of that state and set a precedent for later decisions in lower courts in similar cases. The principle that lower courts must follow precedents set by higher courts is known as stare decisis. The Texas district court refused to hear a case because the plaintiff resides and does business only in Oklahoma. This refusal refers to ------CORRECT ANSWER---------------JURISDICTION. When a judge decides individual claims under the laws that he/she is entrusted to enforce and interpret, the judge is exercising ------CORRECT ANSWER---------------JUDICIAL POWER. John is the attorney for Holly, the plaintiff. John has decided to take his compensation as a percentage of the settlement. This is an example of -----
Karen observed Joe's auto accident. She will testify for Joe, the plaintiff, at his trial. Karen is an example of a ------CORRECT ANSWER--------------- NONPARTY WITNESS. Mr. Jones has filed a personal injury lawsuit against the XYZ Clothing Store. Mr. Henderson, the XYZ Clothing Store's attorney, needs the most current and unbiased details about Mr. Jones' injuries. How can he obtain this unbiased information during discovery? ------CORRECT ANSWER------ ---------INDEPENDENT MEDICAL EXAMINATION (IME) The title of an auto was used in the trial to prove ownership of the auto. This auto title is considered ------CORRECT ANSWER--------------- DOCUMENTARY evidence. The plaintiff's attorney does not want several documents held by the defendant to be allowed into evidence during the trial. Which of the following is a general method to resolve this issue? ------CORRECT ANSWER---------------BENCH CONFERENCE WITH THE JUDGE. A photograph of an accident scene is admitted as evidence in a trial. This is an example of ------CORRECT ANSWER---------------DEMONSTARTIVE To clarify fault in an auto accident, a weather report for that day and time of the accident was entered into evidence at a trial. This weather report is an example of ------CORRECT ANSWER---------------DIRECT evidence.
Alfred, an auto accident expert, gives his opinion on the cause of an accident during a trial. His opinion is considered ------CORRECT ANSWER- --------------TESTIMONIAL EVIDENCE. Doug, the plaintiff, is faced with the burden of proof in his civil case. Which of the following statements best summarizes this burden? ------CORRECT ANSWER---------------In a civil case, the plaintiff has to prove all of the essential elements of its case by a preponderance of the evidence. Josh lost his case against Susan. Josh is unsatisfied with the court's ruling. What should Josh do next? ------CORRECT ANSWER---------------FILE AN APPEAL Emily, the plaintiff's attorney, is very concerned that the jurors in her client's case could be biased in favor of the defendant. Emily wants the jurors to be carefully screened. Which of the following statements best describes what Emily can do in the selection of the jurors? ------CORRECT ANSWER-------- -------Voir dire is the process of examining potential jurors concerning their possible interest in the matters presented at trial, their ability to decide the case fairly and without prejudice, and their overall competence to serve as jurors. The jury has assembled in the court room and the judge has ordered the trial to start. The attorneys for both parties will immediately be granted a right to ------CORRECT ANSWER---------------MAKE AN OPENING STATEMENT. Daniel, the defendant's attorney, is very concerned that the jurors in this case could be biased in favor of the plaintiff. Daniel does not believe his