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DAY 01: TEXAS PLE - LIFE AND HEALTH INSURANCE TEST QUESTIONS AND ANSWERS
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DAY 01: TEXAS PLE - LIFE AND HEALTH INSURANCE TEST QUESTIONS AND ANSWERS
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DAY 01: TEXAS PLE - LIFE AND HEALTHINSURANCE TEST QUESTIONS AND
ANSWERS
Reserves - answer-the accounting measurement of an insurer's future obligations to its
policy holders
Stock companies - answer-owned by stockholder, who get paid a share of the
company's profit through dividends. Non_par
Mutual companies - answer-no stockholders, policy holders own the company. Get paid
through dividends. Par- companies.
Reinsurer - answer-an arrangement by which an insurance company transfers or sells a
portion of the risk to a reinsurance company.
Fair credit reporting act - answer-provides individuals privacy protection and fair and
accurate credit reporting
Which of the following requires insurers to disclose when an applicant's consumer or
credit history is being investigated - answer-1970 - fair credit reporting act
Naic - answer-national association of insurance commissioners. And organization
composed of insurance commissioners from all 50 states
State guaranty association - answer-protect policy owners in the event of any insurance
company going out of business, becoming insolvent, or the in ability to pay claims
Lloyds of london - answer-and association formed to underwrite and issue insurance
like coverage on certain items and areas that might otherwise be uninsurable
At what point must a life insurance applicant be informed of their rights that fall under
the fair credit reporting act? - answer-upon completion of the application
Who elects the governing body of a mutual insurance company? - answer-policyholders
An insurance applicant must be informed of an investigation regarding his/her reputation
and character according to the - answer-fair credit reporting act
Which of these describe a participating life insurance policy? - answer-policyowners are
entitled to receive dividends
, What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - answer-treaty
The stated amount or percent of liquid assets that an insurer must have on hand that
will satisfy future obligations to its policyholders is called - answer-reserves
Which of these require an offer, acceptance, and consideration? - answer-contract
In an insurance contract, the insurer is the only party who makes a legally enforceable
promise. What kind of contract is this? - answer-unilateral
Insurance policies are considered aleatory contracts because - answer-insurance
contracts are aleatory. This means there is an element of chance and potential for
unequal exchange of value or consideration for both parties. An aleatory contract is
conditioned upon the occurrence of an event.
Performance is conditioned upon a future occurrence
If only one of the parties to a contract makes legally
Enforceable promises when the contract is formed, the contract is considered? -
answer-unilateral
Who makes the legally enforceable promises in a unilateral insurance policy? - answer-
insurance company
In regards to representations or warranties, which of these statements is true? - answer-
if material to the risk, false representations will void a policy
The part of a life insurance policy guaranteed to be true is called a - answer-warranty
All of the following are considered to be typical characteristics describing the nature of
an insurance contract except? - answer-exception: bilateral
Unilateral, aleatory, and adhesion are all special features of insurance contracts.
Which of the following consists of an offer, acceptance, and consideration? - answer-
contract
Which of these is not a type of agent authority? - answer-principal.
Agent authority is what an agent is authorized to do on behalf of his company.
The three types of agent authority include express, implied, and apparent authority.
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - answer-representations
A life insurance arrangement which circumvents insurable interest statutes is called -
answer-investor-originated life insurance.
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