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RHODE ISLAND PERMIT EXAM QUESTIONS
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RHODE ISLAND PERMIT EXAM QUESTIONS
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RHODE ISLAND PERMIT EXAM QUESTIONSThe role of insurance is to - Answers- transfer the risk of financial loss from an
individual or business to an insurance company
Organized and incorporated under state law owned by stockholders who get a paid
share of the company's profit through dividends. Also referred to as a nonparticipating or
non-par bc policy holder do not participate in paid dividends - Answers- stock insurance
company
Organized and incorporated under state law. But they have no stockholders. Instead,
the policyholders own the company. Owners get paid a share of the companies profits
through dividends. Participating or par companies bc policy owners do not participate in
paid dividends - Answers- mutual insurer companies
Process of a stock company being converted into a mutual company - Answers-
mutualization
What kind of insurance policy supplies an income stream over a set period of time that
starts when the insured dies? - Answers- family maintenance policy
If a 10 year term life policy contains a renewability in provision, the policy will renew -
Answers- w/o evidence of insurability
Which of the following types of term life policies most likely contains a renewability
feature - Answers- 10 year convertible term
J is 35-years old and looking to purchase a whole life insurance policy. Which of the
following types of policies will provide the most rapid growth of cash value? - Answers-
20 pay life
A(n) ________ life policy combines investment choices with a form of term coverage -
Answers- variable universal
Are a specialized branch of the insurance industry that insurers other insurance
company's risk. *is an arrangement by which an insurance company transfers or sells a
portion of the risk to a reinsurance company - Answers- reinsurers
The insurance company transferring the risk - Answers- ceding company
Industrial insurance sold by home service or debit insurance companies - Answers-
home service insurers
, When 3rd party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - Answers- insurable interest in the proposed
insured
Which is considered a statement that is assured to be true in every respect - Answers-
warranty
Which best describes a warranty - Answers- statement guaranteed to be true
Which of these is not considered to be an element of an insurance contract - Answers-
negotiating
A life insurance policy would be considered contract without? - Answers- insurable
interest
All of the following (bilateral unilateral aleatory adhesion) are considered to be typical
characteristics describing the nature of an insurance contract except - Answers-
bilateral
In an insurance contract the insurer is the only party who makes a legally enforceable
promise what kind of contract is this - Answers- unilateral
Taking receipt of premiums and holding them for the insurance company is an example
of - Answers- fiduciary responsibility
A policy of adhesion can only be modified by whom - Answers- the insurance company
In regards to representations or warranties, which of these statements is TRUE? -
Answers- if material to the risk, false representation will void a policy
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - Answers- representations
Life and health insurance policies are - Answers- unilateral contracts
Which of the following consists of an offer, acceptance, and consideration? - Answers-
contract
When must insurable interests exist for a life insurance contract to be valid - Answers-
inception of the contract
Process of a mutual company being converted into a stock company - Answers-
demutualization
An association formed to underwrite and issue insurance like coverage on certain items
and areas that might otherwise be uninsurable - Answers- Lloyds of London
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