EXAM FX LIFE AND HEALTH INSURANCE TESTS COMPILATION BUNDLE

A policy that covers all causes of loss except for those specifically excluded is known as what type of policy? correct answer: Open Peril (or special) form What sublimit in a liability policy puts a ceiling on the payment for all claims that arise from a single accident? correct answer: Per Oc...

Insurance Terms To make whole again correct answer: Purpose of insurance Basic principle of insurance which the financial loss is assigned to another party. correct answer: Transfer A principle stating that the larger number of similar exposure units considered, the more closely the losse...

Under absolute liability, does an injured party need to prove negligence? correct answer: No. Absolute liability exists when a condition or conduct is inherently dangerous, so proof of negligence is not required. What insurance principle does pro rata liability protect? correct answer: Indemnit...

A state-established program that requires insurers who write property insurance to accept risks in economically depressed areas in the same proportion as their other business bears to the total property insurance market is called the correct answer: Fair Trades Practice plan. A farmer is remodel...

What law protects consumers from the circulation of inaccurate or obsolete information? correct answer: The Fair Credit Reporting Act What do individuals use to transfer their risk of loss to a larger group? correct answer: Insurance What is a deductible in an insurance policy? correct answe...

Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance ? correct answer: Only written statements can be considered fraud An insured is driving her car through a residential area when she loses control and crashes into a neighbor's front...

An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered? correct answer: $6,000 would be paid under other-than-collision coverage. Under the coverage of which of the following liability policies may an insured require the i...

The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will correct answer: Apply to injuries of any guests or visitors. First aid costs for others injured on the insured's premises correct answer: ...

Accelerated benefits correct answer: riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses accident correct answer: an unplanned, unforeseen event which occurs suddenly at an unspecified place Accidental Death and Dism...

Perils correct answer: the cause of loss Policy Owner correct answer: the person who has the rights and privileges in the policy Risk correct answer: Uncertainty or chance of loss -Pure Risk(Insurable) -Speculative(Uninsurable) Insured correct answer: the person covered by the insuran...

What phase begins after a new policy is delivered? correct answer: Free look period In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does thi...

Which of the following policies does NOT contain an automatic reinstatement provision? a) Business automobile liability b) Personal automobile liability with split limits c) Homeowners d) General liability written with an aggregate limit correct answer: General Liability written with an aggrega...

Agent/Producer correct answer: A legal representative of an insurance company Broker correct answer: An insurance producer not appointed by an insurer and whom represents the client Insured correct answer: A person covered by an insurance policy Insurance policy correct answer: A legal ...

If a health insurance policy has a 31-day grace period, what does that mean? correct answer: The policy remains in effect for 31 days after the premium is due and not paid When can an irrevocable beneficiary be changed? correct answer: With the written consent of the beneficiary What health ...