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1.
Which of the following is NOT a variable that influences the premium charge for insurance coverage?
Uninsurable conditions. An uninsurable condition would make it impossible to set a premium. It is not a variable; it is a roadblock.
2.
Insurance applicants who are neither ideal customers nor completely uninsurable are called _______.
Substandard risks. Substandard risk applicants seeking coverage are those who are neither ideal nor completely uninsurable.
3.
If you are turned down for life insurance, you will not qualify for long-term care insurance either.
False. Some people who have unsuccessfully applied for life insurance incorrectly assume they cannot qualify for long-term care insurance either.
4.
The most important principle of insurance underwriting is that the covered risk must be _______.
Either accidental or unforeseen. The most important principle of all insurance underwriting is that the loss to be covered must be accidental or unforeseeable by the party seeking to buy the insurance.
5.
Insurers are required to set long-term care insurance premiums high enough to minimize the likelihood of future rate increases.
True. The regulations require insurance companies to set adequate premiums on new policies when sold, to minimize the chance of rate hikes in years to come.