Which of the following will be included in a policy summary?
-Comparisons with similar policies
-Primary and secondary beneficiary designations
-Premium amounts and surrender values
-Copies of illustrations and application
-Premium amounts and surrender values
A policy summary must be delivered along with the policy and will provide the producer's name and address, the insurance company's home office address, the generic name of the policy issued, and premium, cash value, s
If an agent fails to obtain an applicant's signature on the application, the agent must
-Sign the application for the applicant.
-Sign the application, stating it was by the agent.
-Send the application to the insurer with a note explaining the absence of
-Return the application to the applicant for a signature.
All applications must have the appropriate authorized signatures.
Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?
-Issue a policy anyway since the application has been submitted
-Ask the producer who solicited the policy to complete and resign the application
-Return the application to the applicant for completion
Any unanswered questions need to be answered before the policy is issued. If the insurer receives incomplete applications, they need to be returned to the applicants for completion.
If a telemarketer wants to make an unsolicited sales call to a potential customer, what is the earliest time the telemarketer can call the prospect's residence?
-7 am
-8 am
-9 am
-Noon
-8 am
Permissible calling hours for telemarketers are between 8am and 9pm.
Why should the producer personally deliver the policy when the first premium has already been paid?
-To find out how the family has been doing since the initial presentation
-To make sure the policy is not stolen or lost
-To help the insured understand al
-To help the insured understand all aspects of the contract
It is the producer's responsibility to make sure that the policy is understood by the insured and all of their questions are satisfied, and the delivery receipt is signed.
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
-Pay the policy proceeds up to an established limit.
-Not pay the policy proceeds under any circumstances.
-Automatically pay the policy proceeds.
-Pay the policy proceeds only if it would have issued the policy.
The conditional receipt says that coverage will be effective either on the date of the application or the date of the medical exam, whichever occurs last, as long as the applicant is found
What was created to keep telemarketers from calling consumers who do not wish contacted?
-Freedom of Information Act
-Call Control Registry
-National Do Not Call Registry
-Confidential No Call Act
-National Do Not Call Registry
The National Do Not Call Registry was created to allow consumers the choice to not be contacted by telemarketers.
Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?
-Policy Summary
-Illustrations
-Buyer's Guide
-Insurance Index
-Buyer's Guide
The Buyer's Guide is a consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process. It is a generic guide that does not address the specific policy of the insurer, inste
A producer agent must do all of the following when delivering a new policy to the insured EXCEPT
-Collect any premium due.
-Explain the rating procedures if the policy is rated differently than applied for.
-Disclose commissions earned from the sale of th
-Disclose commissions earned from the sale of the policy.
A producer must explain policy provisions, exclusions, and riders at the time of delivery, as well as the rating procedures, especially if the policy is rated differently than applied for. The prod
Which of the following is a risk classification used by underwriters for life insurance?
Excellent
Standard
Poor
Normal
Standard
The three ratings classifications that denote the risk level of insureds are standard, substandard, and preferred. This classification system helps insurers to decide if an insured should pay a higher premium.
An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?
Inspection Report
Medical Information Bureau's report
Agent's Report
Underwriter's Report
Inspection Report
Inspection reports cover moral and financial information regarding a potential insured, usually supplied by private investigators and credit agencies. Companies that use inspection reports are subject to the rules outlined in the Fair Cr
All of the following are requirements for life insurance illustrations EXCEPT
-They must differentiate between guaranteed and projected amounts.
-They must be part of the contract.
-They may only be used as approved.
-They must identify nonguaranteed valu
-They must be part of the contract.
An illustration may not be altered by an agent and must clearly state that it is not part of the contract. It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, no
Which of the following would NOT be considered an exception to the National Do Not Call List?
-Calls based from outside of the United States
-Calls for which the consumer has given prior written permission
-Calls which are not commercial or do not include
-Calls based from outside of the United States
Calls from outside the United States are not an exception to the National Do Not Call List.
Which of the following entities established the Do-Not-Call Registry?
The Better Business Bureau
The NAIC
The Consumer Protection Agency
The Federal Trade Commission
The Federal Trade Commission
The FTC established the do-not-call list in order to protect consumers against unwanted solicitations.
Which of the following is a term for a person who seeks insurance from an insurer?
Beneficiary
Applicant
Agent
Insured
Applicant
The applicant is the person who is seeking insurance from an insurer.
An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n)
Attending Physician Statement.
Inspection report.
Medical Information Bureau report.
Medical examination.
Inspection report.
An applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant is killed in an automobile accident the next day,
-The company could reject the application on the basis
-The beneficiary would receive $25,000 if it was determined that the insured qualified for the policy applied for.
The conditional receipt provides that when the applicant pays the initial premium, coverage is effective on the condition that the applicant
If a loss occurs, insurance policies pay the proceeds to
Beneficiary
Applicant
Insurer
Agent
Beneficiary
The beneficiary is the person who receives the benefits from the insurance policy.
What do individuals use to transfer their risk of loss to a larger group?
Insurance
Insurable interest
Exposure
Indemnity
Insurance
Insurance is the mechanism whereby an insured is protected against loss by a specified future contingency or peril in return for the present payment of premium. Because many other individuals with the same or similar risk of loss are paying prem
If a consumer requests additional information concerning an Investigative Consumer Report, how long does the insurer or reporting agency have to comply?
7 days
10 days
3 days
5 days
5 days
Consumers must be advised that they have a right to request additional information concerning Investigative Consumer Reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.
What is the purpose of a conditional receipt?
-It serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company.
-It is given by the agent only to applicants who fully prepay all scheduled premiums
-It is intended to provide coverage on a date earlier than the date of the issuance of the policy.
Coverage commences on the date of the application or the date of a medical examination, whichever is later, on the condition that the applicant is determine
Which of the following is NOT an example of insurable interest?
Business partners in each other
Employer in employee
Child in parent
Debtor in creditor
Debtor in creditor
The three recognized areas in which insurable interest exists are as follows: a policyowner insuring his or her own life, the life of a family member (relative or spouse), or the life of a business partner, key employee, or someone who
Which of the following types of risk will result in the highest premium?
Substandard risk
Standard risk
Preferred risk
All risks pay equal premiums
Substandard risk
The "substandard" rating indicates that an individual represents an under-average insurance risk because of physical condition, personal or family history of disease, occupation, habits or hobbies. This rating incurs the highest premium i
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Indemnity
Representation
Warranty
Concealment
Warranty
A warranty in insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract, the statements he or she makes are generally not warranties, but representations. Representations are statements that are true
Insurance is a contract by which one seeks to protect another from
Uncertainty.
Hazards.
Loss.
Exposure.
Loss.
Insurance will protect a person, business or entity from loss.
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
-When the agent submits th
-When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
If the initial premium is not paid with the application, the agent will be required to collect the premium at the time of