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Questions and Answers
Who is considered the legal representative of an insurance company?
Who is considered the legal representative of an insurance company?
- Applicant
- Agent/Producer (correct)
- Insured
- Policyowner
What is required for a policyowner to have an insurable interest?
What is required for a policyowner to have an insurable interest?
- Insurer's consent
- Legal permission from the insurer
- Potential loss of something of value (correct)
- Possession of a physical item
What does the term 'premium' refer to in insurance?
What does the term 'premium' refer to in insurance?
- The legal rights of the policyowner
- The insurance policy itself
- The money paid for coverage (correct)
- The reimbursement amount after a claim
Which statement correctly describes an insurance policy?
Which statement correctly describes an insurance policy?
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In an insurance context, what does the term 'consent' mean?
In an insurance context, what does the term 'consent' mean?
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Study Notes
Insurance Terminology
- Agent/Producer: Represents an insurance company; includes agents and brokers. Agents act on behalf of the insurer.
- Applicant or Proposed Insured: The individual seeking to obtain insurance coverage.
- Consent: Refers to the permission granted for specific actions or agreements.
- Insurable Interest: A requirement where the policyowner must have a potential financial loss related to the insured item or individual in case of a covered event.
- Insurance Policy: A legal contract detailing the agreement between the policyowner and the insurer, outlining the terms under which compensation is provided for losses due to specified events.
- Insured: The individual or entity that is covered by the insurance policy; this may differ from the policyowner.
- Insurer (Principal): The organization or company that issues the insurance policy and agrees to indemnify the insured.
- Policyowner: The individual who holds the insurance policy and possesses the rights to make changes or claim benefits outlined within the policy.
- Premium: The amount of money that the policyowner pays to the insurer in exchange for coverage under the insurance policy.
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