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LOMA 281 Correct Questions & Answers(RATED A+)
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waiver of premium for payor benefit - ANSWER insurer waives renewal premiums if the policy owner, rather than the insured, dies or becomes totally disabled (must provide evidence of insurability) Contracts of Indemnity - ANSWER base benefits on the actual amount of the financial loss that result...

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  • August 30, 2024
  • 16
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • loma 281 stuvia 2024
  • loma 281 correct questions answersrated a
  • waiver of premium for payor benefit answer insur
  • contracts of indemnity answer base benefits on

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LOMA 281 Correct Questions
& Answers(RATED A+)
waiver of premium for payor benefit - ANSWER insurer waives renewal premiums if the policy owner,
rather than the insured, dies or becomes totally disabled (must provide evidence of insurability)



Contracts of Indemnity - ANSWER base benefits on the actual amount of the financial loss that
results from a covered event when it occurs, subject to maximum limits (other than life insurance)



Valued Contract - ANSWER life insurance policies which state the benefit payable at the time of the
policy issue



Retrocessionaire - ANSWER The reinsurer that assumes all or part of the reinsurance risk accepted by
another reinsurer



Stock Insurer - ANSWER - can issue shares of stock

- owned by stockholders, who have voting rights in the company

- stockholders may receive shares of operating profits known as stock dividends



Mutual Insurer - ANSWER - owned by policyowners

- policyowners have membership rights (voting rights)

- policyowners may periodically receive an amount of money known as a policy dividend



Fraternal Benefit Society - ANSWER - owned by members of fraternal lodge system

- provides social and insurance benefits only to fraternal members of their families

- legally required to have a representative form of government



Solvency Regulation - ANSWER -assets must be sufficient to offset liabilities

-calculation of reserves

-premium to surplus ratio

,-investment types and quality

-annual statement must be filed

-guaranty funds



Market Conduct Regulation - ANSWER Regulation of the practices of insurers in regard to four areas
of operation: sales practices, underwriting practices, claims practices, and bad-faith actions.



McCarran-Ferguson Act - ANSWER states that while the federal government has authority to regulate
the insurance industry, it would not exercise its right if the insurance industry was regulated
effectively and adequately on the state level.



Dodd-Frank Act - ANSWER Created the Federal Insurance Office (FIO) with authority to monitor the
insurance industry



The Life and Health Insurance Guaranty Association - ANSWER State's association covers the
company's benefits up to state-mandated maximums (usually up to $300k) should the insurance
company go insolvent



Unilateral Contract - ANSWER contract in which only one party makes a legally enforceable promise
when entering into the contract



Bilateral Contract - ANSWER Both parties make legally enforceable promises



Commutative contract - ANSWER parties agree to exchange specified items or services that are equal
in value



Aleatory contract - ANSWER one party exchanges something of value for the other party's
conditional promise



Bargaining Contract - ANSWER both parties set the terms and conditions



Contracts of Adhesion - ANSWER one party sets the contract terms that the other party must accept
or reject outright

, Voidable contract - ANSWER contract under which one party has the right to avoid their obligations
under the contract and the other party is bound by the terms of the contract



void contract - ANSWER contract that does not meet all legal requirements



Mutual Assent - ANSWER all parties to the contract have an understanding of the terms and agree to
those terms



Insurable Interest - ANSWER Any financial interest in life or property such that, if the life or property
were lost or harmed, the insured would suffer financially



Requirement for a valid contract - ANSWER - mutual assent

- legally adequate consideration

- lawful purpose

- contractual capacity



surrender benefit - ANSWER the amount of the cash value that a policyowner is entitled to receive
upon surrender of the policy



cost of benefits - ANSWER all of the insurer's potential benefit payments multiplied by the expected
probability that each benefit will be payable



simple interest - ANSWER interest on the original principal only



compound interest - ANSWER interest on both the principal and the accrued interest



Term life insurance - ANSWER Life insurance that pays a death benefit if the policyholder dies within
a specific time period (specified in the policy)



Level term life insurance - ANSWER term life insurance that provides a policy benefit that remains
the same over the term of the policy



Decreasing term insurance - ANSWER provides a policy benefit that decreases in amount over the
term of coverage (ex: mortgage insurance)

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