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- 1. Multiple Choice
A life insurance arrangement that circumvents insurable interest statutes is called:
contract of adhesion
an indemnity contract
key person insurance
investor-originated life insurance
- 2. Multiple Choice
Insurance policies are considered aleatory contracts because
they are "take it or leave it" contracts
both parties consent to the contract
performance is conditioned upon a future occurrence
the contract is voidable upon proof of fraud
- 3. Multiple Choice
When must insurable interest be present in order for a life insurance policy be valid?
When the insured dies
Within the incontestability period
When the application is made
Before the insured dies
- 4. Multiple Choice
A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of
adherence
assimilation
aleatory
adhesion
- 5. Multiple Choice
A life insurance policy would be considered a wagering contract without
insurable interest
premium payment
agent solicitation
constructive delivery
- 6. Multiple Choice
The exchange of unequal values reflects which of the following insurance contract features?
Aleatory
Adhesion
Unilateral
Consideration
- 7. Multiple Choice
When must insurable interest exist for a life insurance contract to be valid?
inception of the contract
throughout the entire length of the contract
when the insured dies
during the contestable period
- 8. Multiple Choice
What is the consideration given by an insurer in the Consideration clause of a life policy?
promise to never cancel coverage
promise to pay a death benefit to a named beneficiary
promise to not raise premiums
promise to accept an insured assignment of benefits
- 9. Multiple Choice
A policy of adhesion can only be modified by whom?
the agent
the applicant
the primary beneficiary
the insurance company
- 10. Multiple Choice
Insurance policies are offered on a "take it or leave it" basis, which make them:
Conditional contracts
Aleatory contracts
Unilateral contracts
Contracts of adhesion
- 11. Multiple Choice
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor?
insurer
beneficiary
reinsurer
insured
- 12. Multiple Choice
Stranger Originated Life Insurance has been found to be in violation of which of the following contractual elements?
Consideration
Competent parties
offer/acceptance
Legal purposes (insurable interest)
- 13. Multiple Choice
Which of the following consists of an offer, acceptance, and consideration?
warranty
estoppel
contract
representation
- 14. Multiple Choice
Which of these is not considered to be an element of an insurance contract?
the offer
acceptance
negotiating
consideration
- 15. Multiple Choice
Taking receipt of premiums and holding them for the insurance company is an example of
Commingling
Misappropriation
Theft
Fiduciary responsibility
- 16. Multiple Choice
The consideration clause of an insurance contract includes:
the buyer's guide
a summary of the coverage provided
the named beneficiaries
the schedule and amount of premium payments
- 17. Multiple Choice
At what point does an informal agreement become a binding contract?
When one party makes an invitation and the other makes an offer
When an offer is made by one party and the other party rejects the offer & makes a counter offer
When one party makes an offer and the other party accepts that offer
When consideration is provided by one of the parties to the contract
- 18. Multiple Choice
Which of these arrangements allows one to bypass insurable interest laws?
Concealment
Indemnity contract
Contract of adhesion
Investor-originated life insurance
- 19. Multiple Choice
Which of the following best describes a warranty?
Guarantees that an insurance company will pay a benefit
Statement believed to be true to the best of one's knowledge
Cannot be used to void the contract
Statement guaranteed to be true
- 20. Multiple Choice
Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called:
representations
consideration
warranties
guarantees
- 21. Multiple Choice
Who makes the legally enforceable promises in a unilateral policy?
beneficiary
insurance company
insured
applicant
- 22. Multiple Choice
When a third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have:
all statements be warranties
insurable interest in the proposed insured
the agent complete a third-party application
all those involved be family-related
- 23. Multiple Choice
A life insurance arrangement that circumvents insurable interest statutes is called:
a contract of adhesion
an indemnity contract
key person insurance
Investor-originated life insurance
- 24. Multiple Choice
When must insurable interest be present for a life insurance policy to be valid?
When the insured dies
Within the incontestability period
When the application is made
Before the insured dies
- 25. Multiple Choice
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent
- 26. Multiple Choice
What is the consideration given by an insurer in the Consideration clause of a life policy?
Promise to never cancel coverage
Promise to pay a death benefit to a named beneficiary
Promise to not raise premiums
Promise to accept insured's assignment of benefits
- 27. Multiple Choice
Life and health insurance policies are
multi-lateral contracts
bilateral contracts
unilateral contracts
non-lateral contracts
- 28. Multiple Choice
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
subrogation
unenforceable
adhesion
unilateral
- 29. Multiple Choice
A life insurance policy would be considered a wagering contract without:
insurable interest
premium payment
agent solicitation
constructive delivery
- 30. Multiple Choice
The part of the life insurance policy guaranteed to be true is called a(n):
representation
exclusion
warranty
waiver
- 31. Multiple Choice
All of the following are considered to be typical characteristics describing the nature of an insurance contract except:
bilateral
unilateral
aleatory
adhesion
- 32. Multiple Choice
Insurance contracts are known as ___because certain future conditions or acts must occur before any claims can be paid.
consideration
unilateral
aleatory
conditional
- 33. Multiple Choice
Insurance policies are considered aleatory contracts because
they are take it or leave it contracts
both parties consent to the contract
performance is conditioned upon a future occurrence
the contract is voidable upon proof of fraud
- 34. Multiple Choice
Which of these is not considered to be an element of an insurance contract?
the offer
acceptance
negotiating
consideration
- 35. Multiple Choice
In regards to representations or warranties, which of these statements is true?
Warranties are statements considered to be true to the best of the applicant's belief
If material to the risk, false representations will void a policy
Representations are statements guaranteed to be true in every respect
If material to the risk, false representations will not void a policy
- 36. Multiple Choice
Which of these is considered a statement that is assured to be true in every respect?
Estoppel
Warranty
Guarantee
Representation
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