1. Insured
Answer: The person covered by the insurance policy.
2. Rider
Answer: A written modification attached to a policy that increases or decreasescoverage
and/or premiums.
3. What is a unilateral contract?
Answer: A contract in which only one of the parties islegally bound to fulfill its obligations.
4. What law protects consumers from the circulation of inaccurate or obsoleteinformation?
Answer: The Fair Credit Reporting Act.
5. What are the three types of agent authority?
Answer: Implied, Express, and Apparent.
6. Agent
Answer: An individual who is licensed to sell, negotiate, or effect insurance con-tracts on
behalf of the insurer.
7. What is name of the process that insurance companies use to determinewhether or not an
applicant is insurable?
Answer: Underwriting
8. The requirement that agents must account for and promptly remit all insurance funds
collected is known as what type of agent responsibility?
Answer: Fiduciary
9. What is a third-party ownership?
Answer: An insurance arrangement in which the policyowner and the insured are not the same
person.
10. Suitability
Answer: Factors that determine if an insurance product is appropriate for aparticular
customer.
11. Premium
Answer: A payment by the policy owner to the insurance company to keep thepolicy in force.
12. Disclosure
Answer: Providing sufficient information to help someone make informeddecision.
, 13. An agent offer a client free tickets to a sporting event in exchange for thepurchase of an
insurance policy. What is the agent guilty of?
Answer: Rebating
14. If an insurer meets the states financial requirements and is approved to transact business
in the state, it is considered what type of insurer?
Answer: Authorized
15. What information are the members of the medical information bureau required to report?
Answer: Adverse medical information about the applicants or insureds.
16. What type of beneficiary can be changed at any point by the policy own-er?
Answer: Revocable
17. What document describes the specific information about a policy?
Answer: PolicySummary
18. What is the term for the causes of loss insured against in an insurancepolicy?
Answer: Peril
19. Whom does an insurance agent represent?
Answer: Insurance Company
20. What is an unfair trade practice?
Answer: Any fraudulent, deceptive, or dishonestbusiness practice that is prohibited by statutes
and regulations.
21. Insurer
Answer: The company that issues an insurance policy.
22. Peril
Answer: Cause of loss
23. Contract of Adhesion
Answer: A contract prepared by one party that must be acceptedas written or be rejected by the
other party.
24. What are the four elements of an insurance contract?
Answer: Agreement (Offer andAcceptance), consideration, competent parties, and legal
purpose.
25. Policy Provision
Answer: A clause that stipulates the rights and obligations under aninsurance contract.
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