HI Life - Chapter 1

A life insurance policy has a legal purpose if both of which of the following elements exist?

• Underwriting and reciprocity

• Offer and counteroffer

• Policyowners and named beneficiaries

• Insurable interest and consent

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

• Subrogation

• Warranty

• Aleatory

• Adhesion

The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What must the insurer do with the application?

• Answer the missed questions for the applicant

• Acknowledge the missed questions with a signature and continue the policy issue process

• Proceed with issuing a policy

• Return to the applicant for completion

If an agent fails to obtain an applicant's signature on the application, the agent must

• Return the application to the applicant for a signature

• Sign the application for the applicant

• Sign the application, stating it was by the agent

• Send the application to the insurer with a note explaining the absence of a signature

Another name for a substandard risk classification is

• Declined

• Elevated

• Rated

• Controlled

Why should the producer personally deliver the policy when the first premium has already been paid?

• To ensure the producer gets paid a commission

• To find out how the family has been doing since the initial presentation

• To make sure the policy is not stolen or lost

• To help the insured understand all aspects of the contract

What describes the specific information about a policy?

• Illustrations

• Buyer's guide

• Producer's report

• Policy summary

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

• Delivery receipt

• A signed waiver of premium

• Statement of good health

• Payment of premium

Insurance is the transfer of

• Peril

• Risk

• Loss

• Hazard

What is the purpose of a conditional receipt?

• It serves as proof that the applicant has been determined insurable

• It is given only to applicants who fully prepay the premium

• It is intended to provide coverage on a date prior to the policy issue

• It guarantees that a policy will be issued in the amount applied for