150 questions #1

In the Michigan Insurance Code, Chapter 45, insurance fraud defines financial loss as all of the following EXCEPT

additional premiums

A foreign insurance company doing business in Michigan

is a company domiciled under the laws of another state

An insurance producer license is required for which of the following?

A business entity soliciting insurance

Before operating under an assumed name, a producer MUST notify the

Commissioner

In Michigan, legal action may be taken against an insurer for up to ___ years for failing to pay a life insurance claim after proof of loss was submitted.

6

Under federal income tax law, life insurance death benefit proceeds paid to a beneficiary are:

Not subject to income tax

After 14 years, Jamal cancels his universal life policy and takes the cash surrender value. He paid $18,400 in total premiums and receives $22,900. What amount is taxable?

$4,500

Suppose an insurance contract contains inconsistent or contradictory provisions. Various parts of the contract are printed, typewritten, and handwritten. In seeking to determine the original intent, a court is likely to rely on

The handwritten material first, then the typewritten, and then the printed

An agreement without legal effect is

void

According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's

promises made

Health insurance is intended to cover losses arising from which type of risk?

pure risk

Which of the following statements regarding types of insurers is NOT correct?

Reinsurers usually deal with group policyowners.

Which of the following describes statements made by an insurance applicant that are guaranteed to be true?

Warranty

All of the following have a restricted ability to enter into a contract EXCEPT

Small employer

Which of the following is NOT a commercial insurer

Fraternal Company

A tornado is an example of

a peril

Which type of authority is not stated in writing yet permits an insurance agent to perform the customary duties necessary to conduct an insurer's business?

implied authority

Which of the following statements is correct when comparing participating policies with non-participating policies?

Premiums for participating policies are usually higher than for non-participating policies

The cause of a loss is referred to as a(n)

peril

As it relates to insurance, risk is best defined as a/an __________ of loss?

uncertainty