Legal Concepts of the Insurance Contract UPDATED Exam Questions and CORRECT Answers
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Course
Legal Concepts of the Insurance Contract
Institution
Legal Concepts Of The Insurance Contract
Legal Concepts of the Insurance Contract
UPDATED Exam Questions and
CORRECT Answers
If the agency contract gives the producer the authority to solicit insurance but states nothing
about the collection of premiums, the producer normally has authority to collect premiums
based on
* Implied a...
Legal Concepts of the Insurance Contract
UPDATED Exam Questions and
CORRECT Answers
If the agency contract gives the producer the authority to solicit insurance but states nothing
about the collection of premiums, the producer normally has authority to collect premiums
based on
* Implied authority
* Express authority
* Apparent authority
* Licensee authority - Correct Answer- Implied authority
Which characteristic of an insurance contract means there is a potential for unequal exchange
of value for both parties?
* Aleatory
* Adhesion
* Unilateral
* Conditional - Correct Answer- Aleatory ( Insurance contracts are aleatory. Aleatory
contracts are conditioned upon the occurrence of an event. The benefits provided by an
insurance policy may or may not exceed the premiums paid.)
An agent is an individual that represents whom?
* Insurer
* Insured
* Broker
* Himself/Herself - Correct Answer- Insurer (An agent is an individual who is authorized by
an insurer to sell goods and services on its behalf. An agent is also the insurer's representative
in dealing with the public.)
All of the following are considered to be typical characteristics describing the nature of an
insurance contract EXCEPT
* Bilateral
Which of the following statements describes an insurable interest?
* The policyowner must expect to benefit from the insured's death.
* The policyowner must expect to suffer a loss when the insured dies or becomes disabled.
(The policyowner must face the possibility of losing money or something of value in the
event of the death or disability of the insured.)
* The beneficiary, by definition, has an insurable interest in the insured.
* The insured must have a personal or business relationship with the beneficiary. - Correct
Answer- The policyowner must expect to suffer a loss when the insured dies or becomes
disabled. (The policyowner must face the possibility of losing money or something of value
in the event of the death or disability of the insured.)
The authority of an agent which is spelled out in the written words of the agency contract
between the agent and the insurer is called
implied authority
apparent authority
presumed authority
expressed authority (Express authority is the authority a principal deliberately gives to its
agent. Express authority is granted by means of the agent's contract, which is the principal's
appointment of the agent to act on its behalf.) - Correct Answer-
In life insurance, an insurable interest in the life of the insured must exist
Only at the inception of the contract (Insurable interest must only exist at the time of
application.)
Only at the death of the insured
During the first two years of the contract
Throughout the period of the contract - Correct Answer-
Which of the following statements about authority is NOT correct?
Express authority is granted by means of the agent's contract.
Express authority is determined by a principal's conduct.
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