MN LIFE ACCIDENT & HEALTH PRODUCER EXAM QUESTIONS AND ANSWERS LATEST UPDATE.
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Course
Life, Accident, And Health
Institution
Life, Accident, And Health
MN LIFE ACCIDENT & HEALTH PRODUCER EXAM QUESTIONS AND ANSWERS LATEST UPDATE.MN LIFE ACCIDENT & HEALTH PRODUCER EXAM QUESTIONS AND ANSWERS LATEST UPDATE.MN LIFE ACCIDENT & HEALTH PRODUCER EXAM QUESTIONS AND ANSWERS LATEST UPDATE.MN LIFE ACCIDENT & HEALTH PRODUCER EXAM QUESTIONS AND ANSWERS LATEST UP...
MN LIFE ACCIDENT & HEALTH PRODUCER
EXAM QUESTIONS AND ANSWERS LATEST
UPDATE.
Speculative Risk - (correct answer) -involves the chance of loss or gain, and is not insurable
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Pure Risk - (correct answer) -involves the chance of loss only, and is insurable
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Peril - (correct answer) -Something that causes a direct loss
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Physical Hazard - (correct answer) -Visible (Black ice)
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Moral Hazard - (correct answer) -dishonest tendencies (Fraud)
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Morale Hazard - (correct answer) -Carless, Irresponsible (leaving keys in car)
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Exposure - (correct answer) -susceptibility to loss iu iu iu iu iu iu
Adverse selection - (correct answer) -those with high risk situations attempt to purchase insurance before those with
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average or below- avg. risk
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Insurance - (correct answer) -The transfer of risk from one to many
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Pooling of Risk - (correct answer) -A large reserve of money available to pay claims
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Law of Large numbers - (correct answer) -the accuracy of the insurance companies loss projections will increase, need
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large numbers in order to predict accurate predictions
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Certificate of Insurance - (correct answer) -- used after policy is issued
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- contains summary of policy coverage & limits
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- required in loan transactions and other matters
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Deductibles - (correct answer) -Straight: the insured pays a certain amount owe loss before the insurer is required to make
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a payment
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Aggregate: the insured pays for all losses until they exceed a certain amount (apply per policy period)
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Corridor: is applied before benefits under major medical plans are paid, happens middle of deductible
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Elimination period: used w/ disability income policies & long term care insurance
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Methods of Managing risk - (correct answer) -Avoidance: avoiding a particular activity that could turn into a loss
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Reduction: taking action to reduce the possibility of a loss iu iu iu iu iu iu iu iu iu
Retention: the insured accepts possibility of loss and assumes part of risk, (a deductible is a form of retention)
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Transfer: Shifting financial burden to one another iu iu iu iu iu iu
Sharing: chance of loss is shared among individuals (Pooling)
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Indemnity - (correct answer) --restoring the insured to approx. the same position before there was a loss
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- actual cash value= replacement-depreciation
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- common exceptions
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replacement cost: reimburses insured for damaged or destroyed property w/o subtraction depreciation
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valued policy: pays face amount of total loss regardless of actual cash value
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pro -rata-bility: insurer will pay proportional share of loss
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Primary & excess indemnity - (correct answer) -primary insurer pays first, then once exhausted, the excess insurer pays
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too
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, Coordination of benefits - (correct answer) -provisions apply when more than one group health insurance policy covers
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the same loss
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Insurable interest - (correct answer) -property casualty: at time of loss
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life & health: at time of application
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Subrogation - (correct answer) -gives insurer the right to collect from a negligent 3rd party after taking a loss payment to
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insurer (prevents from collecting twice )
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Utmost Good faith - (correct answer) -representation:
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statements made on application that are entirely true iu iu iu iu iu iu iu
misrepresentation:
incorrect statements in application that don't affect insurability
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material misrepresentation: iu
incorrect statements in application that involve info used to make underwriting decisions (usually void coverage)
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concealment: iu
intentionally hiding info (fraud) iu iu iu
Warranty:
statements that must be true at time of loss, not obligated to pay claim if breached
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Consideration (legal contract) - (correct answer) -an exchange of value between the parties to the contract (payment of
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prem)
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insurer: promise to provide indemnity in event of loss
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insured's: pay prems & have truthful representations
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Unique features of contract - (correct answer) -- unilateral: only 1 party makes a legally enforceabble promise
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- contract of adhesion: insured must accept contract as is.
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- aleatory contract: an unequal value is exchanged between the parties (prem vs coverage)
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- conditional contract: contract may be voided if policy conditions aren't met
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Declarations - (correct answer) -Property & casulty iu iu iu iu iu iu
-period of coverage iu iu
-policy limits iu
- premium
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life & health insurance
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- parties to contract
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- policy limit
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- age of insured at issued date
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Insuring agreement - (correct answer) --Named peril: policies only cover losses from perils that are specifically listed in
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policy
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- open peril: policies cover all losses except those listed in the policy
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Conditions - (correct answer) -duties & responsibilities of the insured and the insurer
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Exclusions - (correct answer) -the perils/ losses that aren't included by the policy
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endorsements - (correct answer) -modifications to a property or casualty policy must be in writing & are attached to the
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insurance
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Riders - (correct answer) -modifications to life & health policy: must be in writing & are attached to policies
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Mutual insurers - (correct answer) --not for profit
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-owned by policy owners iu iu iu
- managed by board of directors
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- pariu
- not assessable
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Stock insurers - (correct answer) -- for profit
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- owned by shareholders
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- sell non par
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- non assessable
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