FL LIFE INSURANCE SAMPLE QUIZ

WHICH OF THE FOLLOWING INDIVIDUALS WOULD RECEIVE THE DEATH BENEFIT FROM A LIFE INSURANCE POLICY?

A BENEFICIARY IS A PERSON OR ENTITY TO WHICH THE POLICY PROCEEDS WILL BE PAID UPON THE DEATH OF THE INSURED.

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?

ANSWER: BUYER'S GUIDE EXPLANATION: 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, INSTEAD EXPLAINING LIFE INSURANCE IN A WAY THAT THE AVERAGE CONSUMER CAN UNDERSTAND.

AN APPLICANT WHO RECEIVES A PREFERRED RISK CLASSIFICATION QUALIFIES FOR

ANSWER: LOWER PREMIUMS THAN A PERSON WHO RECEIVES A STANDARD RISK. EXPLANATION: THE PREFERRED RISK CATEGORY IS RESERVED FOR THOSE PERSONS WITH A SUPERIOR PHYSICAL CONDITION, LIFESTYLE, AND HABITS.

WHICH OF THE FOLLOWING IS THE BASIC SOURCE OF INFORMATION USED BY THE COMPANY IN THE RISK SELECTION PROCESS?

APPLICATION - THE APPLICATION IS THE BASIC SOURCE OF INFORMATION AN INSURER USED IN THE RISK SELECTION PROCESS.

IF AN INSURER ISSUED A POLICY BASED ON THE APPLICATION THAT HAD UNANSWERED QUESTIONS, WHICH OF THE FOLLOWING WILL BE TRUE?

ANSWER: THE POLICY WILL BE INTERPRETED AS IF THE INSURER WAIVED ITS RIGHT TO HAVE AN ANSWER ON THE APPLICATION. EXPLANATION: ANY UNANSWERED QUESTIONS NEED TO BE ANSWERED BEFORE THE POLICY IS ISSUED. IF A POLICY IS ISSUED WITH QUESTIONS LEFT UNANSWERED, THE CONTRACT WILL BE INTERPRETED AS IF THE INSURER WAIVED ITS RIGHT TO HAVE AN ANSWER FOR THE QUESTION, AND WILL NOT BE ABLE TO DENY COVERAGE LATER BECAUSE OF UNANSWERED QUESTIONS.

IN CLASSIFYING A RISK, THE HOME OFFICE UNDERWRITING DEPARTMENT WILL LOOK AT ALL OF THE FOLLOWING EXCEPT

ANSWER: APPLICANT'S PAST INCOME EXPLANATION: IN CLASSIFYING A RISK, THE HOME OFFICE UNDERWRITING DEPARTMENT WILL LOOK AT THE APPLICANT'S PAST MEDICAL HISTORY, PRESENT PHYSICAL CONDITION, OCCUPATION, HABITS AND MORALS.

MOST AGENTS TRY TO COLLECT THE INITIAL PREMIUM FOR SUBMISSION WITH THE APPLICATION. WHEN AN AGENT COLLECTS THE INITIAL PREMIUM FROM THE APPLICANT, THE AGENT SHOULD ISSUE THE APPLICANT A

ANSWER: PREMIUM RECEIPT EXPLANATION: WHEN COLLECTING THE INITIAL PREMIUM, THE AGENT SHOULD ISSUE THE APPLICANT A PREMIUM RECEIPT.

WHY SHOULD THE PRODUCER PERSONALLY DELIVER THE POLICY WHEN THE FIRST PREMIUM HAS ALREADY BEEN PAID?

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.

WHICH OF THE FOLLOWING INDIVIDUALS MUST HAVE INSURABLE INTEREST IN THE INSURED?

POLICYOWNER - THE POLICYOWNER MUST HAV AN INSURABLE INTEREST IN THE INSURED ( HIS/HER OWN LIFE IF THE POLICYOWNER AN DTHE INSURED IS THE SAME PERSON), OR IN THE LIFE OF A FAMILY MEMBER OR A BUSINESS PARTNER.

HOW LONG IS THE GRACE PERIOD IN INDIVIDUAL LIFE INSURANCE POLICIES?

THE GRACE PERIOD IS THE PERIOD OF TIME AFTER THE PREMIUM DUE DATE THAT THE POLICYOWNER HAS TO PAY THE PREMIUM BEFORE THE POLICY LAPSES ( USUALLY A MONTH - 30 OR 31 DAYS.

WHEN Y APPLIED FOR INSURANCE AND PAID THE INITIAL PREMIUM ON AUGUST 14, HE WAS ISSUED A CONDITIONAL RECEIPT. DURING THE UNDERWRITING PROCESS, THE INSURANCE COMPANY FOUND NO REASON TO REJECT THE RISK OR CLASSIFY IT OTHER THAN AS STANDARD. Y WAS KILLED IN AN AUTOMOBILE ACCIDENT ON AUGUST 22, BEFORE THE POLICY WAS ISSUED. IN THIS CASE, THE INSURANCE COMPANY WILL

ANSWER: ISSUE THE POLICY ANYWAY AND PAY THE FACE VALUE TO THE BENEFICIARY. EXPLANATION: 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 TO BE INSURABLE AS A STANDARD RISK, AND POLICY IS ISSUED EXACTLY AS APPLIED FOR.

AN INDIVIDUAL APPLIED FOR AN INSURANCE POLICY AND PAID THE INITIAL PREMIUM. THE INSURER ISSUED A CONDITIONAL RECEIPT. FIVE DAYS LATER THE APPLICANT HAD TO SUBMIT TO A MEDICAL EXAM. IF THE POLICY IS ISSUED, WHAT WOULD BE THE POLICY'S EFFECTIVE DATE?

IF THE COMPANY ACKNOWLEDGES RECEIPT OF THE PREMIUM WITH A CONDITIONAL RECEIPT, THE POLICY IS IN EFFECT ON THE DATE OF THE APPLICATION OR THE DATE OF THE MEDICAL EXAM (WHICHEVER IS LATER), PROVIDED THAT THE APPLICANT IS FOUND INSURABLE AT THE RATE APPLIED FOR.

WHICH OF THE FOLLOWING BEST DETAILS THE UNDERWRITING PROCESS FOR LIFE INSURANCE?

ANSWER: SELECTION, CLASSIFICATION, AND RATING OF RISKS. EXPLANATION: THE UNDERWRITING PROCESS IS ACCOMPLISHED BY REVIEWING AND EVALUATING INFORMATION ABOUT AN APPLICANT AND APPLYING WHAT IS KNOWN OF THE INDIVIDUAL AGAINST THE INSURER'S STANDARDS AND GUIDELINES FOR INSURABILITY AND PREMIUM RATES.

AN APPLICANT SIGNS AN APPLICATION FOR A $25,000 LIFE INSURANCE POLICY, PAYS THE INITIAL PREMIUM, AND RECEIVES A CONDITIONAL RECEIPT. IF THE APPLICANT DIES THE FOLLOWING DAY, WHICH OF THE FOLLOWING IS TRUE?

ANSWER: THE BENEFICIARY WILL RECEIVE THE FULL DEATH BENEFIT IF IT IS DETERMINED THAT THE APPLICANT QUALIFIED FOR THE POLICY. EXPLANATION: THE CONDITIONAL RECEIPT PROVIDES THAT WHEN THE APPLICANT PAYS THE INITIAL PREMIUM, COVERAGE IS EFFECTIVE ON THE CONDITION THAT THE APPLICANT PROVES TO BE INSURABLE EITHER ON THE DATE THE APPLICATION WAS SIGNED OR THE DATE OF THE MEDICAL EXAMINATION, IF ONE IS REQUIRED.

WHICH OF THE FOLLOWING BEST DESCRIBES INSURANCE?

INSURANCE IS DEFINED AS THE TRANSFER OF RISK FROM AN INDIVIDUAL OR BUSINESS ENTITY TO AN INSURANCE COMPANY. THE INSURANCE COMPANY RECEIVES THE RISK AND SPREADS THE COSTS OF UNEXPECTED LOSSES TO MANY INDIVIDUALS.

WHICH OF THE FOLLOWING TERMS MEANS SOMETHING OF VALUE THAT EACH PARTY GIVES TO THE OTHER UNDER AN INSURANCE CONTRACT?

CONSIDERATION - THE BINDING FORCE IN ANY CONTRACT IS THE ONSIDERATION. CONSIDERATION IS SOMETHING OF VALUE THAT EACH PARTY GIVES TO THE OTHER. THE CONSIDERATION ON THE PART OF THE INSURED IS THE PAYMENT OF PREMIUM AND THE REPRESENTATIONS MADE IN THE APPLICATION. THE CONSIDERATION ON THEPART OF THE INSURER IS THE PROMISE TO PAY IN THE EVENT OF LOSS.

ANOTHER NAME FOR A SUBSTANDARD RISK CLASSIFICATION IS

RATED - SUBSTANDARD RISK CLASSIFICATION IS ALSO REFERRED TO AS "RATED" SINCE THESE POLICIES COULD BE ISSUED WITH THE PREMIUM RATED-UP, RESULTING IN A HIGHER PREMIUM.

INSURANCE IS THE TRANSFER OF

RISK - INSURANCE IS THE TRANSFER OF FINANCIAL RESPONSIBILITY ASSOCIATED WITH A POTENTIAL OF A LOSS (RISK) TO AN INSURANCE COMPANY.

CONTRACTS THAT ARE PREPARED BY ONE PARTY AND SUBMITTED TO THE OTHER PARTY ON A TAKE-IT-OR-LEAVE-IT BASIS ARE CLASSIFIED AS

CONTRACTS OF ADHESION - INSURANCE POLICIES ARE WRITTEN BY THE INSURER AND SUBMITTED TO THE INSURED ON A TAKE-IT-OR-LEAVE-IT BASIS. THE INSURED DOES NOT HAVE ANY INPUT INTO THE CONTRACT, BUT SIMPLY ADHERES TO THE CONTRACT.

INSURANCE POLICIES ARE NOT DRAWN UP THROUGH NEGOTIATIONS, AND AN INSURED HAS LITTLE TO SAY ABOUT ITS PROVISIONS. WHAT CONTRACT CHARACTERISTIC DOES THIS DESCRIBE?

ANSWER: ADHESION EXPLANATION: A CONTRACT OF ADHESION IS PREPARED BY ONLY THE INSURER; THE INSURED'S ONLY OPTION IS TO ACCEPT OR REJECT THE POLICY AS IT IS WRITTEN.

THE FULL PREMIUM WAS SUBMITTED WITH THE APPLICATION FOR LIFE INSURANCE, AND THE POLICY WAS ISSUED TWO WEEKS LATER AS REQUESTED. WHEN DOES THE POLICY COVERAGE BECOME EFFECTIVE?

ANSWER: AS OF THE APPLICATION DATE EXPLANATION: IF THE FULL PREMIUM WAS SUBMITTED WITH THE APPLICATION AND THE POLICY WAS ISSUED AS REQUESTED, THE POLICY COVERAGE EFFECTIVE DATE WOULD GENERALLY COINCIDE WITH THE DATE OF APPLICATION.