An insured purchased an insurance policy 5 years ago. Last year, she
received a dividend check from the insurance company that was not
taxable. This
... [Show More] year, she did not receive a check from the insurer. From what
type of insurer did the insured purchase the policy?
a. mutual
b. reciprocal
c. nonprofit service organization
d. stock
(Ans- A. mutual
funds not paid out after paying claims and other operating costs are
returned to the policy owners in the form of a dividend. if all funds are paid
out, no dividends are paid
Following a career change, an insured is no longer required to perform
many physical activities, so he has implemented a program where he walks
and jogs for 45 minutes each morning. The insured has also eliminated
most fatty foods from his diet. Which method of dealing with risk does this
scenario describe?
a. retention
b. reduction
c. transfer
d. avoidance
(Ans- B. reduction
the insured's change in lifestyle and habits would likely reduce the chances
of health problems
In insurance, an offer is usually made when
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial premium
c. the agent hands the policy to the policyholder
d. an agent explains a policy to a potential applicant
(Ans- A. an applicant submits an application to the insurer
in insurance, the offer is usually made by the applicant in the form of an
application. acceptance takes place when an insurer's underwriter
approves the application and issues a policy
the causes of loss insured against in an insurance policy are known as
a. perils
b. losses
c. risks
d. hazards
(Ans- A. perils
perils are the causes of loss insured against in an insurance policy
what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions
(Ans- A. agents contract with the principal
the principal grants authority to an agent through the agent's contract
which of the following best describes an insurance company that has been
formed under the laws of this state?
a. domestic
b. sovereign
c. alien
d. foreign
(Ans- A. domestic
a company is domestic when doing business within the state in which it is
incorporated
which of the following factors is NOT considered by an underwriter when
determining the premium rates for an individual seeking insurance?
a. medical history
b. sex
c. age
d. race
(Ans- D. race [Show Less]