TEXAS LIFE HEALTH CHAPTER 1 TERMS EXAM

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QUESTIONS

Qs and Ans - Expert- Explanation - ing score -11 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Adverse selection

Answer:

insuring of risks that are more prone to losses than the average risk

Question 2: Insurance policy

Answer:

a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events

Question 3: Beneficiary

Answer:

a person who receives the benefits of an insurance policy

Question 4: Fraud

Answer:

intentional misrepresentation or deceit with the intent to induce a person to part with something of value

Question 5: Premium

Answer:

the money paid to the insurance company for the insurance policy

Question 6: Applicant or proposed insured

Answer:

a person applying for insurance

Question 7: Lapse

Answer:

policy termination due to nonpayment of premiumLife insurance - coverage on human lives

Question 8: Death benefit

Answer:

the amount paid upon the death of the insured in a life insurance policy

Question 9: Agent/Producer

Answer:

a legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents are the agents of the insurer

Question 10: Insured

Answer:

person covered by the insurance policy; may or may not be the policyownerInsurer (principal) - the company who issues an insurance policy

Question 11: Policyowner

Answer:

the person entitled to exercise the rights and privileges in the policy