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Exam Prep Questions

  1. Ralph is a producer for Hoosier Insurance Company. His contract states that he is allowed to put the company's logo on his business cards and the door to his office. This is an example of
    1. Express authority
    2. Implied authority
    3. Lingering implied authority
    4. Apparent authority
  2. Tom has always made a practice of having his policyholders mail their premium checks directly to him, and forwarding them on to the insurer, so that he is aware of anyone missing a payment and can contact policyowners directly if that should happen. His contract does not allow this, but the insurer is aware of the practice and has not asked him to stop. This practice is an example of
    1. Express authority
    2. Implied authority
    3. Lingering implied authority
    4. Apparent authority
  3. Gina accepts the initial premium when she sells an insurance policy and sends it to the company with the application. Nothing in her contract mentions handling of initial premiums. This is an example of
    1. Express authority
    2. Implied authority
    3. Lingering implied authority
    4. Apparent authority
  4. Albert's life insurance premium is due on the 10th of the month. Because he gets paid at the end of the month, he has always sent the premium late. The insurer has been accepting his premium this way for 3 years. A new CEO comes in and decides to crack down on late premiums, canceling Albert's policy for nonpayment of premium. Albert contests this decision legally and gets the policy reinstated. The decision to reinstate the policy is an example of
    1. Estoppel
    2. Waiver
    3. Contract of adhesion
    4. Express authority
  5. When representing an insurer, a producer acting as an agent has a responsibility to act with the degree of care that
    1. A licensed insurance producer would apply under similar circumstances
    2. A reasonable person would apply under similar circumstances
    3. A lawyer would apply under similar circumstances
    4. Any person would apply under similar circumstances
  6. Which element is not necessary for the formation of a valid contract?
    1. Consideration
    2. Competent parties
    3. Written document
    4. Legal purpose
  7. The initial premium payment sent with an application constitutes which part of the formation of an insurance contract?
    1. Consideration
    2. Acceptance
    3. Offer
    4. Legal purpose
  8. Life insurance contracts contain all the following except
    1. Policy folder
    2. Insuring clause
    3. Conditions
    4. Exclusions
  9. Ken has paid only four premiums on his health insurance policy when he is hit by a car. The insurance company pays out nearly half a million dollars to cover his treatment and a lengthy stay in intensive care. This is an example of
    1. Contract of adhesion
    2. Aleatory contract
    3. Unilateral contract
    4. Utmost good faith
  10. Carol applies for a life insurance policy and pays the initial premium. Carol has
    1. Accepted an offer from the insurer
    2. Made an offer to the insurer
    3. Accepted a counter offer from the insurer
    4. Made a counter offer to the insurer
  11. The insurer looks at Carol's application and decides to offer Carol a modified policy, including an exclusion Carol did not request. The insurer has
    1. Accepted an offer from Carol
    2. Made an offer to Carol
    3. Accepted a counter offer from Carol
    4. Made a counter offer to Carol
  12. The failure to disclose known facts is
    1. Misrepresentation
    2. Concealment
    3. Fraud
    4. Impersonation
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