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MI Credit Insurance Producer Study Guide Quizzes with complete solutions
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MI Credit Insurance Producer Study Guide Quizzes with complete solutions
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MI Credit Insurance Producer StudyGuide Quizzes with complete solutions
______ can be defined as the spreading of financial risk over a large group of people in
order to minimize the potential economic loss to any one individual - Answer -Insurance
Which of the following would be true concerning risk? - Answer -An insurable pure risk
only involves the possibility of loss
Which of the following would NOT be a method of handling (copying with) risk? -
Answer -Risk Reliance
Which of the following would not be classified as an insurable pure risk? - Answer -The
loss must be catastrophic
The Law of Large numbers states that: - Answer -The accuracy with which an insurer
can predict the likelihood of a particular event increases as the number of people that
share the risk of that particular event increases
Which of the following is considered a risk? - Answer -An individual may need to seek
medical attention after falling off a ladder
Which of the following is a type of insurance company that is owned by its
shareholders? - Answer -Stock
Which of the following is NOT considered a characteristic of an insurable risk? - Answer
-Loss must be small
A stock insurance company pays dividends to: - Answer -The stockholders of the
insurance company
Which of the following concepts is considered the ability to predict the approximate
number deaths or frequency of disabilities within a certain group during a specific time?
- Answer -Law of Large numbers
Mark has an insurance policy whereby he votes at company annual meetings, and
shares in any profits of the company. Mark's policy was issued by which type of insurer?
- Answer -Mutual Company (insurance owned by its policyholders)
, Which of the following would NOT be considered to have an insurable interest? -
Answer -Business owner and customer
Which of the following would not be an element of an insurance contract?
Consideration
Offer and Acceptance
Legal object
Incompetent party - Answer -Incompetent part
Buying insurance is a means of - Answer -Transferring risk
Which of the following is not a risk classification involved in a life and health insurance
application: - Answer -Adverse Risk
The incontestable period becomes effective after? - Answer -2 years
Statements made on an application for insurance are considered to be representations.
This means: - Answer -Those statements concerning a material fact are true to the best
of knowledge and belief of the applicant
Which of the following is not considered to be a source of underwriting information?
The medical information Bureau
The inspection report
The department of Insurance
Medical information - Answer -The Department of Insurance
Adverse selection means: - Answer -That there are more insurance risks selected that
have a possibility of loss than standard risks.
The provision which states that the policy is complete, and there are no other
agreements as part of the policy is the: - Answer -An entire contract provision
Which of the following is not a standard provision in a life insurance contract?
Misstatement of Age
Grace Period
Backdating a policy
Incontestable Provision - Answer -Backdating a policy
Which of the following is true with regard to the minimum time that the insured may
bring legal action against an insurer? - Answer -The insured may bring legal action after
60 days of filing a claim
The change of occupation provision - Answer -Is an optional provision
The time limit on certain defenses is: - Answer -2 years from the effective date of the
policy
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