Insurance MCQ

Doug approaches Ed about purchasing term life insurance. Ed has access to many different life insurance companies to get the best quote for Doug. In this situation, Ed would best be described as a(an)? A) Broker. B) Contractor. C) Agent. D) Fiduciary. Answer: A) Broker.

Which is considered a statement made by an applicant that he/she believes to be true? A) Concealment. B) Good Faith. C) Warranty. D) Representation. Answer: D) Representation.

Which of the following terms is used for the voluntary relinquishment of a known right? A) Unilateral. B) Estoppel. C) Adhesion. D) Waiver. Answer: D) Waiver.

The authority of an agent which is spelled out in the written words of the agency contract between the agent and the insurer is called? A) presumed authority. B) implied authority. C) expressed authority. D) apparent authority. Answer: C) expressed authority.

All of the following are considered to be typical characteristics describing the nature of an insurance contract EXCEPT? A) Unilateral. B) Adhesion. C) Aleatory. D) Bilateral. Answer: D) Bilateral.

Which of the following statements about authority is NOT correct? A) Express authority is determined by a principal's conduct. B) Express authority is granted by means of the agent's contract. C) Implied authority is not overtly extended in the agent's contract but does permit many of the agent's operations. D) Apparent authority can be assumed from the actions of the principal. Answer: A) Express authority is determined by a principal's conduct.

When an agent is provided the materials from his/her company, which category of authority is the one which allows those items to be used? A) Apparent. B) Implied. C) Intended. D) Obvious. Answer: A) Apparent.

All are competent parties who can enter into insurance contracts EXCEPT? A) Applicants. B) Business entities. C) Those under influence of alcohol. D) Trusts and estates. Answer: C) Those under influence of alcohol.

The following are all characteristics of insurance contracts EXCEPT? A) insurable interest. B) unilateral. C) unconditional. D) valued or indemnity. Answer: C) unconditional.

The authority given by an insurer or employer to a licensee to transact insurance or adjust claims on their behalf is called? A) appointment. B) certification. C) authorization. D) representation. Answer: C) authorization.

Special features of insurance contracts include all of the following EXCEPT? A) aleatory. B) estoppel. C) conditional. D) unilateral. Answer: B) estoppel.

Because an insurance contract has been prepared by an insurance company with no negotiation it is considered? A) a unilateral contract. B) an aleatory contract. C) a contract of adhesion. D) a commutative contract. Answer: C) a contract of adhesion.

An agreement without legal effect is? A) void. B) fraudulent. C) parole evidence. D) estoppel. Answer: A) void.

An agent is an individual who has been authorized by an insurer to be its representative and to perform all of the following acts EXCEPT? A) collect premiums from policyowners. B) render services to prospects. C) authorize payment of certain claims. D) solicit applications for insurance. Answer: C) authorize payment of certain claims.

All of the following would be considered non-competent parties in an insurance contract EXCEPT? A) minors. B) the disabled. C) those under the influence of drugs or alcohol. D) the mentally infirm. Answer: B) the disabled.

A life insurance policy would be considered a wagering contract WITHOUT? A) agent solicitation. B) premium payment. C) constructive delivery. D) insurable interest. Answer: D) insurable interest.

In insurance, an offer is usually made when? A) The application is submitted. B) An agent explains a policy to a potental applicant. C) The agents hands the policy to the policyholder. D) The insurer approves the application and receives initial premium. Answer: A) The application is submitted.

Insurable interest must exist at what time? A) At the time of death. B) At all times. C) At the time of application. D) At the time of delivery. Answer: C) At the time of application.

Which of the following best describes the concept that the consideration is not equal in contract law? A) Adhesion. B) Aleatory. C) Subrogation. D) Warranty. Answer: B) Aleatory.

An agent is an individual that represents whom? A) Himself/Herself. B) Broker. C) Insurer. D) Insured. Answer: C) Insurer.