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Kentucky Health and Life insurance Test Questions and Answers - part 1
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Kentucky Health and Life insurance Test Questions and Answers - part 1
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Kentucky Health and Life insurance test- part 1
What is insurance? - Answer-insurance is a means for spreading the result of financial loss among many
persons so the cost to any one person is small.
What is assessment? - Answer-the system of paying losses by requiring a contribution from each family
covered by the plan.
What is life insurance? - Answer-Life insurance is a means of spreading among many persons the
financial loss resulting from an individual's death so that the cost for each individual is small.
What is a contract? - Answer-A contract is a legal agreement between two or more parties promising a
certain performance in exchange for a valuable consideration.
What does it mean for life insurance to be a unilateral contract? - Answer-This means that only one
party to the contract--in this case, the insurance company--is required to perform its obligations under
the contract. The policy owner can discontinue paying premiums if he so chooses. But if the premiums
are in fact paid, the insurance company must meet its obligations under the contract.
, What certain characteristics must an insurance contract have to be enforceably legal? - Answer-CLOC -
Competent parties, Legal purpose, Offer and acceptance, and consideration
What does offer and acceptance mean in a contract? - Answer-Offer and Acceptance means that
contracts involve two parties: one party who makes an offer and another party who accepts the offer. In
insurance, the applicant makes the offer.
What is a waiver? - Answer-the voluntary relinquishment of a known legal right
What is estoppel? - Answer-A legal prohibition which stops a person from making a particular statement
of claim because of something he has said or done before (or waived)
What is aleatory? - Answer-Giving a little for a lot. It means that equal value is not given by both parties
to the contract.
Insurance contracts are said to be contracts of adhesion. Define it. - Answer-Contracts of adhesion are
somewhat one sides (like adhesive tape). the provisions of the contract are prepared by one party, the
insurer.
What is a contract of utmost good faith? - Answer-utmost good faith: the parties have an affirmative
duty to each other to disclose all material facts relating to the contract.
What is the modern system of life insurance based on? - Answer-Life insurance is based on the
statistical probabilities of death in a large population of insureds. The key to this system is predicting
ahead of time the average number of people who will die each year at each age.
True or false: the larger number of people and deaths recorded, the more reliably one can predict how
many will die at a specific age in the entire population of insureds of that age. - Answer-True.
What age do insurance company statistics assume everyone has died by? - Answer-100
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