3

A producer who engages in material misrepresentation which contributes to the financial impairment of an insurer or who engages in embezzlement, may be subject to a federal prison sentence of: 5 years 10 years 15 years 20 years

15 years

Alex is covered by a $100,000 whole life policy. He borrows $4,000 against the cash value without repayment. A $1,000 premium is owed on January 2nd but is not paid. If Alex dies on January 15th, what will be paid to his primary beneficiary? $95,000 $100,000 $96,000 $99,000

95

Rhonda purchases a health insurance policy that is characterized as nonoccupational. This type of insurance contract would cover each of the following contingencies, EXCEPT: Rhonda contracts pneumonia Rhonda suffers an injury after being struck by an errant golf shot Rhonda is hurt at work Rhonda injures her ankle while walking on public property

Rhonda is hurt at work

There are numerous ways in which to manage risk. One of these methods involves a concept referred to as avoidance. Each of the following would be considered to be an illustration of risk avoidance, EXCEPT: Deciding not to engage in bungee jumping Installing a sprinkler system throughout a building Refusing to purchase stocks, bonds or other investments Receiving an inoculation

installing a sprinkler system throughout a building

Which of the following types of insurance carrier is formed without any capital stock? Stock company Mutual company Foreign company Authorized company

mutual company

An independent financial rating service evaluates all of the following criteria regarding an insurance company, EXCEPT: Claims paid Available products Personnel practices Claim reserves

personnel practices

Waldo purchases a disability income policy covering him in his occupation as a teacher at a local high school. Six years later, Waldo accepts a new position as a demolition expert. What action will his insurer take after he notifies them of his occupational change? Cancel the policy Reduce the monthly benefit amount Reduce the annual premium amount Nonrenew the policy on its next anniversary date

reduce the monthly benefit amount

The binding force in an insurance contract is: The legal purpose The consideration The agreement Legal capacity

the consideration

A Comprehensive Major Medical insurance policy may be characterized by basic expenses and coinsurance. All of the following are true regarding this type of insurance policy, EXCEPT: There are no first dollar benefits It consists of basic expenses and major medical coverages It may include a corridor deductible The insured must pay a coinsurance amount

there are no first dollar benefits

Which of the following best describes a producer providing an incomplete comparison of policies in order to persuade an individual to lapse an existing policy voluntarily? Twisting Defamation Coercion Larceny

twisting

Which of the following parties transfers ownership of a life insurance policy to a viatical settlement firm? Viator Viatee Viatical settlement broker Beneficiary

viator

In order for an insurance contract to be legal and enforceable it must contain four elements. One of these elements is called a consideration. A consideration is something of value that must be exchanged between the parties to the contract. Which of the following is the consideration on the part of the policyowner or insured? Premium paid and application representations Premium paid and promise to pay Representations on the application and the promise The promise to pay only

Premiums paid and application representations