Life Insurance
What is the term for replacing insurance policies for the purpose of making commissions?
Churning
What is the maximum penalty for violating the Fair Credit Reporting Act?
$2,500
How many days must an existing insurer provide policy owners with a policy summary?
10 days
How often does the agent's insurance license expire?
2 years
How long should a replacing insurer maintain a replacement register regarding the policy for the next regular examination by the Insurance Department?
3 years
How long should insurers keep advertisements on file?
4 years
What is Apparent authority?
Appearance or the assumption of the authority grants the agent more powers to assist the client
Generic publication that explains insurance in general terms, to help with decision making
Buyer's Guide
T/F: A signed waiver of premium is somthing that can be collected/obtained from the applicant
F: Waiver or prem is a rider that can be added to the policy, but not collected from the applicant
Which act require that a company supply an applicant with the name & address of the consumer reporting company?
Fair Credit Reporting Act
When would misrepresentation be considered fraud?
If it is intentional and material
Life insurance illustrations
Must - Identify non guaranteed values -differentiate guaranteed & projected amount -Only be used as approved
Which individuals must have insurable interest in the insured?
Policyowner
What is another name for substandard risk classification?
Rated
What is rebating?
Special offers or favors, outside of the contract
What is material misrepresentation?
Statement by the applicant that would affect the underwriting decision, if discovered.
What is a warranty in insurance?
Statement guaranteed to be true
What is speculative risk?
The chance of gain or loss and is not insurable
What is the premium?
The fee the policy-owner pays to the insurer
What is the purpose of a disclosure statement in life insurance policies?
To explain features & benefits of a proposed policy to the consumer
What is the significance of a conditional receipt?
To provide coverage on an earlier date than the policy
What type of insurance would the following acts be: -Solicitation -Preliminary insurance negotiations -Execution of insurance contracts -Transactions of matters arising out of the contracts
Transacting insurance
What is Conservation effort?
Trying to discourage a policyholder to drop an existing policy
What term is used for tricking policyholders by using fraudulent comparisons of policies to persuade the insured to switch or take out another policy with another insurer?
Twisting
When does the policy begin, if the initial premium is not paid?
When the agent delivers the policy -Collects the initial premium -Applicant completes an acceptable Statement of Good Health