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LOMA 281 questions with 100% correct answers graded A+
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LOMA 281 questions with 100% correct answers graded A+
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LOMA 281What are speculative risks? - correct answer ✔✔Risks that involve three outcomes: loss, gain, or no
change
What are pure risks? - correct answer ✔✔Risks that involve no possibility of gain
What risks are insurable? - correct answer ✔✔Only pure risks
Speculative risks involve the possibility of gain so they cannot be insured
What is a retention limit? - correct answer ✔✔The maximum amount of risk the insurer is willing to
carry at its own risk
What is a commutative contract? - correct answer ✔✔The parties agree to exchange specified items or
services that are equal in value
What is an aleatory contract? - correct answer ✔✔One party exchanges something of value for the other
party's conditional promise
Is a life insurance policy a commutative or aleatory contract? - correct answer ✔✔Aleatory
Are life insurance contracts bargaining contracts? - correct answer ✔✔No, they are contracts of
adhesion. The insurance company sets the terms and the applicant can either accept or reject
Are insurance contracts formal or informal? - correct answer ✔✔Informal
What are the requirements of a valid contract? - correct answer ✔✔Mutual assent
Legally adequate consideration
, Lawful purpose
Contractual capacity
Which relatives automatically satisfy the requirement of insurable interest? - correct answer
✔✔Spouses, children, parents, siblings, grandparents, and grandchildren
What is ROP insurance? - correct answer ✔✔A form of term life insurance that provides a death benefit
if the insured dies during the term of coverage and promises a return of premiums if the insured does
not die during the term of coverage.
What are the two main elements of cash value life insurance that term life does not have? - correct
answer ✔✔Lifetime coverage
A savings element
Can a cash value policy with outstanding loans be surrendered? - correct answer ✔✔Yes, the surrender
value will just be reduced by the amount of any outstanding policy loans
What is a modified-premium whole life insurance policy? - correct answer ✔✔A whole life insurance
policy for which the annual premium amount increases after a specified initial period
What is universal life insurance? - correct answer ✔✔A form of cash value life insurance that is
characterized by its flexible premiums, its flexible face amount and death benefit amount, and its
separation of the three primary policy elements.
What is variable universal life insurance? - correct answer ✔✔Cash value life insurance that combines
the premium and death benefit flexibility of universal life insurance with the investment flexibility and
risk of variable life insurance. Also called flexible-premium variable life insurance.
Are annuities life insurance products according to U.S. regulations? - correct answer ✔✔Yes
What does SPIA stand for? - correct answer ✔✔Single Premium Immediate Annuity
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