215 INSURANCE LICENSE EXAM

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215 INSURANCE LICENSE EXAM

Qs and Ans - Expert- Explanation - ing score -98 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: graded premium whole life

Answer:

premiums lower during preliminary period increasing each year and leveling off after the preliminary period

Question 2: payor provision

Answer:

if adult premium payor dies or becomes disabled, premiums will be waived until child reaches specified age or the maturity of contract, whichever comes first

Question 3: law of large numbers

Answer:

larger the group, the more certain the predictions

Question 4: representation

Answer:

statements made by the applicant believed to be true

Question 5: adhesion

Answer:

contract drawn up by one party - no negotiations; take it or leave it

Question 6: valued

Answer:

pays stated sum

Question 7: suicide provision

Answer:

if insured commits suicide within 2 years, death benefits will not be paid

Question 8: unilateral

Answer:

only one party, the insurer, makes any enforceable promises

Question 9: risk avoidance

Answer:

avoiding the risk, don't do anything

Ex: choosing not to drive, fly or invest (not practical)

Question 10: foreign

Answer:

incorpo out of the state of florida

Question 11: advertising code

Answer:

stopped deceptive advertising and paid testimonies

Question 12: estoppel

Answer:

once a right is waived, cannot get it back

Question 13: blanket life insurance

Answer:

covers group exposed to common hazard

Ex: policy issued to owner of airline to cover passengers

Question 14: physical hazard

Answer:

slippery floor, blindness, deafness, past medical history

Question 15: adverse selection

Answer:

tendency for less favorable insurance risks to seek and continue insurance to greater extent than other risks

Ex: people in poor health

Question 16: fraternal benefit society

Answer:

charitable, social, nonprofit, lodge system, representative form of government whose membership is based on religion, nationality, or ethnic lines; began on assessment bassi to help poorer members but now issues insurance certificates and annuities similar to commercial insurers

Question 17: defamation

Answer:

knowingly making any false or maliciously critical or derogatory type of communication, including both written or spoken, which is meant to injure a person

Question 18: apparent authority

Answer:

appearance of a relationship with the company based on actions, words, or deeds

Question 19: morale hazard

Answer:

carelessness, indifference

Ex: driving recklessly with no fear of injury

Question 20: unfair trade practices act

Answer:

gives cfo power to investigate insurers and producers, issue cease and desist orders, and impose penalties on violators

Question 21: common disaster provision

Answer:

activates only when insured and primary beneficiary die as result of same accident; presumes insured died last

Question 22: needs base approach

Answer:

how much money needed if death occurs today

Question 23: expressed authority

Answer:

authority principal ly intends and gives to agent; written in agency agreement

Question 24: stock insurers

Answer:

private organization owned by stockholders; in business to make profit for stockholders

Question 25: moral hazard

Answer:

intentional act, tendencies to take risks;

Ex: alcoholism, drugs, dishonesty

Question 26: irrevocable beneficiary

Answer:

policyowner gives up right to change beneficiary

Question 27: risk reduction

Answer:

reducing the risk of a loss

Ex: installing smoke detectors, quit smoking, don't test and drive

Question 28: contributory plan

Answer:

employee pays portion of premium