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level: Level 1

Questions and Answers List

Question	Answer
Policy termination due to nonpayment of premium.	Lapse
1. Agreement- offer and acceptance 2. Consideration' 3. Competent parties; and 4. Legal purpose	Elements of a legal contract
Insuring of risks that are more prone to losses than the average risk.	Adverse selection
The money paid to the insurance company for the insurance policy.	Premium
The person entitled to exercise the rights and privileges in the policy.	Policyowner
A legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents are the agents of the insurer.	Agent/Producer
A person applying for insurance.	Applicant or proposed insured
A person who receives the benefits of an insurance policy.	Beneficiary
The amount paid upon the death of the insured in a life policy	Death benefit
A contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events.	Insurance policy
Person covered by the insurance policy; may or may not be the policyowner.	Insured
The company who issues an insurance policy.	Insurer (Principal)
Coverage on human lives.	Life insurance