WV State Life Insurance Exam Questions and Answers Already Passed
Question : A group-owned insurance company that is formed
to assume and spread the liability risks of its members is
known as a:
CORRECT ANSWER : Risk retention group
Question : Which of the following requires insurers to
disclose when an applicant's consumer or credit history is being investigated?
CORRECT ANSWER : 1970-Fair Credit Reporting Act
Question : Q purchases a $500,000 life insurance policy and
pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?
CORRECT ANSWER : Aleatory
Question : The stated amount or percent of liquid assets that
an insurer must have on hand that will satisfy future
obligations to its policyholders is called:
CORRECT ANSWER : Reserves
Question : All of the following are considered to be typical
characteristics describing the nature of an insurance contract,
EXCEPT:
CORRECT ANSWER : Bilateral
Question : What year was the McCarran-Ferguson Act
enacted?
CORRECT ANSWER : 1945
Question : Which of the following consists of an offer,
acceptance, and consideration?
CORRECT ANSWER : Contract
Question : Who elects the governing body of a mutual
insurance company?
CORRECT ANSWER : Policyholders
Question : Insurance policies are considered aleatory
contracts because:
CORRECT ANSWER : Performance is conditioned upon a
future occurrence
Question : Who makes the legally enforceable promises in a
unilateral contract?
CORRECT ANSWER: Insurance company
Question : Insurance contracts are known as _____ because
certain future conditions or acts must occur before any claims can be paid.
CORRECT ANSWER : Conditional
Question : A life insurance arrangement which circumvents
insurable interest statutes is called:
CORRECT ANSWER : Investor-Originated Life Insurance
Question : In an insurance contract, the insurer is the only
party who makes a legally enforceable promise. What kind of contract is this?
CORRECT ANSWER : Unilateral
Question : When third-party ownership is involved, applicants
who also happen to be the stated primary beneficiary are
required to have:
CORRECT ANSWER : Insurable interest in the proposed
insured
Question : Which of these arrangements allows one to bypass
insurable interest laws?
CORRECT ANSWER : Investor-Originated Life Insurance
Question : When must insurable interest exist for a life
insurance contract to be valid?