Insurance Quiz Trad (No. 85 - 172)

Applicants for life insurance with moderate physical impairments are called sub-standard risks and ____.

• Therefore cannot obtain life insurance in any company

• May be insured at increased rates to compensate for the extra hazard

• Are issued policies without any non-forfeiture values

• Are required to pay premiums on an annual basis

Life insurance companies practice risk selection primarily to ____.

• Guard against anti-selection

• Establish dividend rates on participating policies

• Determine policy reserve amount

• Gather and test mortality statistics

What is the legal consideration for the promise made by the insurance company in a life insurance contract?

• Payment of renewal premium

• Approval by the underwriters

• Establishment of the reserve

• Payment of the initial premium

A hazardous occupation could be defined

• An occupation the duties of which expose the insured to a degree of danger of sustaining injury

• An occupation in an unhealthy working condition exposing the insured to elements which can cause sickness

• An occupation which exposes the insured to social hazards

• All of the above

Which of the following is not true about insurance premiums?

• The grace period is usually 31 days.

• A premium is the legal consideration needed to effectuate a life insurance policy

• Premiums which are paid quarterly or semi-annually are higher than those paid annually

• Cash is required for all premiums paid in the grace period

Which of the following determines the extent of medical evidence required?

• Occupation of the applicant

• The age of the applicant and the proposed sum to be insured

• Date of the last medical examination

• Financial condition of the applicant

Which of the following statements satisfies the requirement that the beneficiary should have an insurable interest?

• The insured and the beneficiary are engaged in a similar occupation

• The insured belongs to the same club as the beneficiary

• The insured is financially indebted to the beneficiary

• The insured and the beneficiary regularly travel to and from work in a car pool arrangement

Most life insurance agents are expressly authorized to perform the following functions:

• Solicit application for insurance, accept the initial premium, and issue a receipt on behalf of the insurance company

• Solicit and approve the application of the proposed insured

• Accept initial premium, and waive the insurable interest requirement

• Appraise applicants, and decide on a standard or sub-standard rating

Helena owns a policy that is kept in force by paying the premiums on a semi-annual basis. If she elected the non-forfeiture option. This means she ____.

• Chooses a mode of settlement for the life proceeds

• Discontinues premium payments for a whole life or endowment policy

• Converts a term policy to a whole life policy

• Renews a term life policy

In order for an assignment of a life insurance policy to be binding upon the company, ____.

• It must be made in writing and filed with the company

• It must be of the limited type

• The company must be satisfied that it is justified

• The company must certify to its validity