Completing the Application, Underwriting, Delivering Policies, Contract Law
Why is a life insurance policy classified as an aleatory contract?
Answer and explanation
Answer: D. An aleatory contract turns on chance: a policyowner may pay one premium and the beneficiary collect the full face amount, or the owner may pay for decades. The values exchanged need not be equal.Source: NAIC Life Insurance Buyer's Guide — The policy as a contract: aleatory nature of insurance
More completing the application, underwriting, delivering policies, contract law questions
- Why is an insurance contract classified as a conditional contract?
- Why should a producer provide a policy summary and buyer's guide to an applicant at or before policy delivery?
- A client applies for life coverage without a temporary receipt. The insurer approves and issues the policy as applied for. Under standard application provisions, when does company liability actually begin?
- A consumer report plays a small part in an insurer's decision to charge a higher life premium. What does the FCRA require?
- A corporation is applying to own a life insurance policy. Which signature best evidences a competent party acting on behalf of the corporation?
- A delivered policy has a higher premium because underwriting classified the insured for a risky occupation. Which explanation is appropriate?
590 Texas questions like this one.
Every answer explained, the ones you miss come back on a spaced schedule, and a plan built from your exam date.