Primerica-General Insurance Study Guide 2021/2022 SCORE AN A+
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Primerica-General Insurance
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Primerica-General Insurance
Primerica General Insurance
Adverse selection is a concept best described as: Correct Answer: risks with higher probability of loss seeking insurance more often than other risks
Courts will interpret any ambiguity in an insurance contract: Correct Answer: in the favor of the insured- insura...
primerica general insurance study guide 20212022 score an a
primerica general insurance study guid
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Primerica General Insurance
Adverse selection is a concept best described as: Correct Answer: risks with higher probability of loss
seeking insurance more often than other risks
Courts will interpret any ambiguity in an insurance contract: Correct Answer: in the favor of the insured-
insurance policies are contracts of adhesion. the insurer writes the contract and the insured accepts the
contract as it is written. when ambiguities exist, courts generally rule in the favor of the insured.
which of the following is NOT an essential element of an insurance contract?
a. counteroffer
b. consideration
c. agreement
d. legal purpose Correct Answer: a. counteroffer- is not required for a contract to be legally binding
4 essential elements are
agreement and acceptance
consideration
competent parties
legal purpose
an insured modifies his insurance claims, illegally adjusting them to display a lower amount. what
insurance concept does this violate? Correct Answer: utmost good faith
which insurer is owned by stockholders who have the usual rights of ownership, including the right of
voting and incurring profits or losses? Correct Answer: Stock insurance
the authority granted to an agent through the agent's contract is referred to as: Correct Answer:
Express authority: express powers are written into the contract between the insurer and the agent
A participating insurance policy may: Correct Answer: pay dividends to the policy owner based upon
actual mortality cost, plus interest earned, less expenses of running the business
When an insurance company agrees to automatically assume a portion of the risk written by another
insurance company, it is known as a(n): Correct Answer: Reinsurance treaty-insurers limit their
exposure to catastrophic losses by purchasing insurance from a reinsurance company. a reinsurance
agreement whereby the re insurer automatically assumes the risks ceded to it is a reinsurance treaty.
an individual's tendency to be dishonest would be indicative of a: Correct Answer: moral hazard-an
applicant that is dishonest in completing an application for insurance or submitting fraudulent claims
would be deemed a moral hazard and could be uninsurable from an underwriting standpoint
insurance companies may be classified according to the legal form of their ownership. the typeof
company organized to return any surplus money to their policyholders is a: Correct Answer: Mutual
insurer-mutual companies are owned and controlled by their policyholders. any surplus money is
returned to the policy holders as dividends.
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