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Lesson 2 Quiz

The following quiz is provided for your information to help you measure your retention level on the material covered within this lesson. It is not graded. Only the final examination is graded.

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1

A life insurance contract is considered a valued contract because it pays a predetermined amount with no way to assess loss.

a)
b)
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2

In order for a contract to be legally binding, the process must include four elements. Match the following elements with their respective descriptions.

a)
b)
c)
d)
a) Offer and Acceptance b) Legal Purpose c) Consideration d) Competent Parties (Lesson 2.1)
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3

Which of the following would NOT be considered "competent parties" in a life insurance contract?

a)
b)
c)
d)
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4

Insurable interest can be established in all of the following ways EXCEPT:

a)
b)
c)
d)
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5
Contract Types

A(n) _______________ contains unequal contingencies on the potential for profit or loss upon both parties in the insurance contract.

a)
b)
c)
d)
e)
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6

A life insurance contract is a(n) _________________ because buyers must adhere to the terms of the contract already in existence with no opportunity to negotiate terms, rates, values, etc.

a)
b)
c)
d)
e)
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7

A(n) ______________ obligates one party (the insurer) in the contract.

a)
b)
c)
d)
e)
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8

A(n) ____________________ pays a predetermined amount with no way to assess loss.

a)
b)
c)
d)
e)
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9

A(n) ___________________ pays the amount of loss only thereby returning the insured to the same position he/she was in before the loss occurred.

a)
b)
c)
d)
e)
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10

If fraud is discovered after the contract has been in force for _______ years, it cannot be contested and any otherwise legitimate claims cannot be denied based on fraud, misrepresentation or concealment.

a)
b)
c)
d)
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11

The voluntary surrendering of a legal, given right is known as:

a)
b)
c)
d)
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12

The __________________ prohibits making any additional verbal changes to a contract once it becomes a written document.

a)
b)
c)
d)
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13

is the legal enforcement of a(n) .


Word bank: Estoppel, Waiver

Estoppel is the legal enforcement of a(n) Waiver.

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14
Authority

____________ authority spells out in contract form the activities that the agent has the power to perform on behalf of the insurer?

a)
b)
c)
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15

The appearance of power on behalf of the insurer through the actions or use of identifying materials by the agent, such as company advertising material, is called _____________ authority.

a)
b)
c)
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16

______________ authority is established through verbalization and occurs when appropriate actions are taken to carry out the authority granted to fulfill the principal's goals.

a)
b)
c)
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17

It is absolutely necessary that the policyowner continue to have insurable interest in the insured until the insured dies.

a)
b)
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