FIN 3320

Which of the following is correct about the group life conversion privilege?

. must be made available for 31 days

In the event of a licensed producer's death or disability, a temporary license may be issued to another individual for a period of:

180 days

If Anna is licensed to sell both Life/Health and Personal/Commercial insurance, how many hours of continuing education are required every 2 years?

24

A Louisiana resident life producer would be required to complete continuing education in the amount of:

24 CE hours to be completed before biennial renewal date

Upon completion of an examination of an insurer, the Louisiana Department of Insurance must send a written report no later than:

30 days after examination completion

The minimum number of members required to form a group life insurance policy is:

5

Notice of a Hearing involving a producer's misconduct must be made:

5 days in advance of hearing

When group insurance is written on a contributory basis, the minimum participation requirement is:

75%

When representing an insurer, a producer acting as an agent has a responsibility to act with the degree of care that

A reasonable person would apply under similar circumstances

Shane is a master carpenter in business for himself. His business is probably operated as

A sole proprietorship

Which of the following would NOT be funded with a life insurance policy?

A split-dollar plan

Beth is a 25-year-old who drinks very occasionally, does not smoke, and does not have any known health problems. Beth would probably be classified by an insurer as

A standard risk

Which of the following are duties of a producer upon the death of an insured?

A. Notify the company b. Contact the beneficiary c. Send the proof of death documents to the company d. All of the above.

Bob purchases a policy and tells the producer he wants immediate coverage, regardless of the underwriting outcome. To meet Bob's demand, the producer is most likely to

Accept the premium and set up a temporary insurance agreement

Which of the following is a risk?

An individual may need medical attention after slipping on the ice and falling.

A policy may be issued all of the following ways EXCEPT

As an exchange policy, covering someone other than the original applicant

Which of the following statements is true about submitting the application, premium, and other forms to the insurance company?

Because coverage is effective immediately, it is not necessary to send the forms to the home office underwriter more often than weekly.

Alice decides to buy a policy. She pays the first premium and the producer issues a receipt and tells her that she is covered immediately, until she is notified that the policy is either issued or declined. What kind of receipt has Alice received?

Binding receipt

Ana wishes to purchase enough insurance to support her husband for the rest of his life if she should die prematurely, and then leave a sizeable inheritance for her children upon his death. Which method should be used to calculate the amount of insurance necessary?

Capital conservation

The failure to disclose known facts is

Concealment

The initial premium payment sent with an application constitutes which part of the formation of an insurance contract?

Consideration

The premium is the insured's:

Consideration to enter into a contract

Which of the following regulates the Medical Information Bureau (MIB)?

Fair Credit Reporting Act

Ken has terminal cancer and wants to access the death benefit of his life insurance policy to pay medical expenses. How might he be able to do this?

He may access the funds either through a viatical settlement or by using the accelerated benefits provision

The type of estate transfer made while the estate owner is still alive is called a(n)

Inter vivos transfer

Bill dies without leaving a will. The distribution of her estate will be handled by a(n)

Intestate distribution

All have insurable interest in Joe's life EXCEPT?

Joe's neighbor

The insurer looks at Carol's application and decides to offer Carol a modified policy, including an exclusion Carol did not request. The insurer has

Made a counter offer to Carol

Carol applies for a life insurance policy and pays the initial premium. Carol has

Made an offer to the insurer

Which of the following statements describe the best use of a producer's time when personally delivering the policy?

Mrs. Ross delivers a policy and restates the advantages of the policy and how it can be amended to meet future insurance needs.

What is considered the BEST method for determining the amount and kind of insurance a prospect should buy?

Needs Approach

Richard applies for a policy, pays the initial premium, and receives a BINDING receipt on Friday, September 1. On Monday, September 4, the underwriting department decides not to issue the policy and places the file in a pile for notification letters to be sent out at the end of the week. On Wednesday, September 6, Richard is killed in an auto accident. On Thursday, September 7, the insurer receives the notice of claim. The insurer will

Pay the claim, because a binding receipt assures coverage until the potential insured is notified of a rejection.

Life insurance contracts contain all the following EXCEPT

Policy folder

Which of the following does NOT have an impact on insurance premium rates?

Producer certification

Which of the following statements is false?

Replacement is illegal.

If an individual decides to accept the risk associated with a loss and not purchase insurance, they are using what risk managing method?

Retaining

The type of estate transfer made after the estate owner dies is called a(n)

Testamentary transfer

An insurance producer analyzed Glenda's life insurance needs, taking into account Glenda's net annual salary, her expenses, her current age, and depreciation of the dollar over time. This producer was using

The human life value approach to needs analysis

An insurance producer analyzed Ken's life insurance needs, taking into account the amount of money Ken anticipated needing for his funeral and the amount of income that would be required to maintain his family's standard of living in the event of his death, including projected college costs and the costs of supporting his spouse. This producer was using

The needs approach to needs analysis

All of the following statements are true regarding an actuary EXCEPT?

They select the risk to be insured

All of the following are personal uses of life insurance EXCEPT?

To protect a corporation from the financial loss sustained when a key employee dies

Which type of risk management techniques are used when the insured buys insurance?

Transfer

Which of the following are costs associated with death?

a. Doctor or hospital bills from a final illness or accident b. Paying off debts such as credit cards or other loans c. Taxes d. All of the above

The tendency for less favorable risks to purchase insurance is called:

adverse selection

The practice of the Louisiana Life & Health Guaranty Association charging members in order to pay contractual obligations for an insolvent insurer is called?

assessment

In life insurance the "insurable interest" must exist:

at the time of application only

Several producers agree to control the market share of Cajun Mutual Insurance Company. What type of unfair trade practice is this?

boycott

The policyowner has the right to do all of the following EXCEPT?

change the conditions of the policy

Living benefits of life insurance include all of the following EXCEPT:

death benefit

The application of the law of large numbers enables insurers to

estimate the future losses of a class or group of people

Abby, a licensed producer, is moving to Kansas. What is Abby's responsibility under the Louisiana Insurance Code?

notify the Louisiana Department of Insurance of address change within 30 days

Julie's husband died 3 years ago, leaving her with two children in grade school. Julie is most likely in which income period?

family dependency period

All of the following are true regarding group life insurance EXCEPT?

group life insurance can be converted only with evidence of insurability

Which of the following should NOT be taken into account when a producer makes recommendations as to the amount and type of insurance needed by an individual?

how much commission does the product offer?

A group life underwriter would be concerned about all of the following EXCEPT?

individual health problems

Speculative risk involves all of the following EXCEPT?

insurance

The term used to describe the individual who is covered by the insurance is

insured

hich of the following penalties can the Louisiana Department of Insurance impose?

license revocation

Who receives the certificate of insurance in group insurance?

member

All of the following are considered sources of underwriting information of the applicant EXCEPT?

mortality tables

All of the following are possible premium modes EXCEPT?

nine months

Lee applies for a policy, pays the initial premium and receives a conditional receipt on March 14. On March 15, he passes the medical exam with flying colors. On March 16, an undiagnosed brain aneurysm bursts, killing Lee instantly. On March 17, the insurer receives the results of the medical exam, which includes no information about the aneurysm. On March 19, the insurer receives the notice of claim. The insurer will

pay the claim

All of the following are hazards in life insurance EXCEPT?

premature death

Which of the following is NOT considered an illegal act for a life producer?

premium savings offered by the insurer because the premium is bank drafted

The Louisiana Life & Health Insurance Guaranty Association:

requires all authorized insurers in the State be members of the Association

If William is a producer and lives in Texas but travels to Louisiana to solicit a policy of insurance, William must have a:

resident license for Texas and a non resident license for Louisiana

If the Louisiana Department of Insurance suspects a producer is using "Unfair Trade Practices," the first action taken is to:

send notice of a hearing

All of the following information would be included in a Notice of a Hearing by the Louisiana Department of Insurance EXCEPT?

state any precedence established by previous orders

Regarding the Medical Information Bureau (MIB), all of the following are true EXCEPT?

the insurer is obligated to supply applicants with the information contained in MIB files

Certain elements are necessary for a particular risk to be insurable. Which of the following would make a risk uninsurable?

the risk is of a catastrophic (war/nuclear) nature

The Louisiana Life & Health Guaranty Association would protect all of the following policies EXCEPT?

variable annuities

Group life insurance:

written on a one year level term policy basis