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My Life and Health Insurance Study Guide- ExamFX Practice Questions and Answers 100% Pass
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My Life and Health Insurance Study Guide- ExamFX Practice Questions and Answers 100% Pass An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe? - ANSWER...

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  • November 19, 2024
  • 48
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • my life and health insurance study guide examfx p

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  • FX Insurance
  • FX Insurance

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My Life and Health Insurance Study
Guide- ExamFX Practice Questions and
Answers 100% Pass

An insured pays a $100 premium every month for his insurance coverage, yet the

insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance

contract does this describe? - ANSWER✔✔-Aleatory: an aleatory contract means

unequal amounts are exchanged between payments and benefits


What is the Federal Credit Reporting Act? - ANSWER✔✔-Establishes procedures that

consumer-reporting agencies must follow in order to ensure that records are

confidential, accurate, relevant, and properly used.




Also protects consumers against the circulation of inaccurate or obsolete personal or

financial information


What are consumer reports? - ANSWER✔✔-Written and/or oral information regarding

a consumer's credit, character, reputation, or habits collected by a reporting agency

from employment records, credit reports and other public sources




Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 1/48

,What is an investigative consumer report? - ANSWER✔✔-Also provide information on

the consumer's character, reputation, and habits, but obtained through an investigation

and interviews.




A reporting agency conducts an investigation and interviews associated, friends and

neighbors of the consumer. These reports can't be made unless the consumer is advised

within 3 days of the report request


What happens if someone knowingly and willfully obtains information on a consumer

from a consumer reporting agency under false pretenses? - ANSWER✔✔-They are not

complying with the Fair Credit Reporting Act and may be fined and/or imprisoned for

up to 2 years


What happens if someone unknowingly violates the Fair Credit Reporting Act? -

ANSWER✔✔-They become liable in the amount equal to the loss to the consumer as

well as any reasonable attorney fees incurred in the process


What happens when someone willfully violates the Act enough to constitute a general

pattern or business practice? - ANSWER✔✔-They are subject to a penalty of up to

$2,500


What rights does a consumer have if an insurance policy is declined or modified

because of information contained in either consumer report? - ANSWER✔✔-Must be

advised and provided with the name and address of the reporting agency

Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 2/48

,Has the right to know what was in the report


Has the right to know the identity of anyone who received a copy of the report during

the past year.


Has the right to challenge any information in the report and the agency is required to

reinvestigate and amend the report.


If the report is found to be wrong, it must be corrected and sent out to all parties that

have received a report in 2 years.


What is MIB? - ANSWER✔✔-The Medical Information Bureau (MIB)


A membership corportation owned by member insurance companies. It's a nonprofit

trade organization which receives medical information from insurance companies and

maintains confidential information on individuals.


It is only used as a way to compare the information you have with other insurance

companies and see where you need to look into more. A policy cannot be denied solely

because of these reports


What is HIPAA? - ANSWER✔✔-The Health Insurance Portability and Accountability

Act


A federal law that protects health information. Provide protection for the privacy of

certain individually identifiable health information




Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 3/48

, What are preferred risks? - ANSWER✔✔-A risk classification used when determining

how much risk a consumer is and how much their premium should be


Preferred risks are individuals who meet certain requirements and qualify for lower

premiums than the standard risk. They have superior physical condition, lifestyle, and

habits


What are standard risks? - ANSWER✔✔-A risk classification used when determining

how much risk a consumer is and how much their premium should be


Standard risks are entitled to insurance protection without extr rating or special

restrictions. They are representative of the majority of people their age and with similar

lifestyles, average risk.


What are substandard risks? - ANSWER✔✔-A risk classification used when

determining how much risk a consumer is and how much their premium should be


Substandard (high exposure) are not acceptable at standard rates because o physical

condition, personal or family history of disease, occupation, or dangerous habits


Also referred to as "rated" because they could be issued the premium "rated up", or

higher.


What are declined risks? - ANSWER✔✔-People who are rejected from life insurance




Copyright ©SOPHIABENNETT 2025 ACADEMIC YEARALL RIGHTS RESERVED. Page 4/48

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