NEBRASKA LIFE AND HEALTH INSURANCE EXAM

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NEBRASKA LIFE AND HEALTH INSURANCE EXAM

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Legal prupose

Answer:

the purpose of the contract must be legal and not against public policy

Question 2: Retention (method of handling risk)

Answer:

is planned assumption of risk by insured through use of deductibles, co-payments, or self-insurance

Question 3: Representations

Answer:

are statements believed to be true to the best of one's knowledge, but are not guaranteed to be true

Question 4: Elements of a legal contract

Answer:

• agreement

• consideration

• competent parties

• legal purpose

Question 5: Stock Companies

Answer:

owned by stockholders who provide capital necessary to establish and operate the insurance company who share in profits and losses

Question 6: Risk Purchasing Group

Answer:

an entity which offers insurance to groups of like businesses with similar exposure to risk

Question 7: Mutual Companies

Answer:

owned by policy owners and issue participating policies. Policy owners are entitled to dividends, which are a return of excess premiums making them nontaxable

Question 8: Utmost good faith

Answer:

the principle of utmost good faith implies that there will be no fraud, misrepresentation or concealment between the parties. In insurance, both insurer and insured must be able to rely on the relevant information. Insured is expected to provide accurate information on the application for insurance and the insurer must clearly and truthfully describe policy features and benefits and must not conceal or mislead insured

Question 9: Loss

Answer:

reduction, decrease or dissappearance of value of the person or property insured in a policy, caused by a named peril. Insurance provides means to transfer loss

Question 10: Dividends

Answer:

generated when premiums and earnings combined exceed the actual cost of providing coverage creating a surplus, not guaranteed

Question 11: What can an RRG do?

Answer:

may re-insure another RRG's liability as long as the members of the 2nd group are engaged in the same or similar business or industry

Question 12: Property Insurance

Answer:

insures against the loss and/or damage of property and resulting in liabilities

Question 13: example of moral hazard

Answer:

applicants who may lie on an application for insurance or in the past have submitted fraudulent claims against an insurer

Question 14: Aleatory Contract

Answer:

Insurance contracts are aleatory which means there is an exchange of unequal value.

Question 15: Reduction

Answer:

actions taken to lessen possibility or severity of a loss

Question 16: Health Insurance

Answer:

insures against mediacal expenses and/or loss of income caused by the insured's sickness or accidental injury

Question 17: Unilateral Contract

Answer:

only one part is legally bound to do anything. Insured makes no legally binding promises however, insurer is legally bound to pay losses covered by a policy.

Question 18: Risk Retention Group (RRG)

Answer:

is a liability insurance company owned by its members.

Question 19: What is a formal risk sharing agreement?

Answer:

A reciprocal insurance exchange

Question 20: Implied authority

Answer:

authority not expressed or written into the contract, but which the agent is assumed to in order to transact the business of insurance for the principal.

Question 21: Example of a physical hazard

Answer:

past medical history, existing conditions, (blindness)

Question 22: Due to chance

Answer:

a loss that is outside the insured's control

Question 23: examples of government insurance

Answer:

medicare, social security, federal crop insurance, and national flood insurance.

Question 24: Example of avoidance

Answer:

avoid being killed in an airplane crash by not riding on airplanes (not practical)

Question 25: Not catastrophic

Answer:

Insurers need to be reasonably certain their losses will not exceed specific limits

Question 26: Fraud

Answer:

is the intentional misrepresentation or intentional concealment of a material fact used to induce another party to make or refrain from making a contract or to deceive or cheat a party.

Question 27: Transfer

Answer:

most effective way to handle risk, transfer it so the loss is borne by another party