ucanpass 214 license ch. 1
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
Which of the following statements is NOT true concerning insurable interest as it applies to life insurance? *A married person has an insurable interest in their spouse *An individual has an insurable interest in their own life *A debtor has an insurable interest in the life of a lender *Business partners have an insurable interest in each other
A debtor has an insurable interest in the life of a lender (If the lender dies you/debtor don't owe them anything anymore!) PS Remember that these wrong answers ARE true statements about insurable interest!
Fraud
A deliberate deception intended to secure an unfair or unlawful gain
When must insurable interest exist in a life insurance policy?
At the time of the application
Lapse
Cancellation due to non-payment
Applicant
Client; soon to be insured
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is
Conditional
Which of the following is NOT an example of a valid insurable interest? *Child in a parents' life *Debtor in the life of the collector *Business partners in each other's lives *Employers in key employee's life
Debtor in the life of the collector (You don't even want them calling you why would you want insurance for them?!) PS Remember that these wrong answers ARE good examples of insurable interest!
A producer agent must do all of the following when delivering a new policy to the insured EXCEPT *Explain the policy provisions, riders, and exclusions *Collect an premium due *Explain the rating procedures if the policy is rated differently than applied for *Disclose commissions earned from the sale of the policy
Disclose commissions earned from the sale of the policy (Don't rub in your pay check while they are paying you for expensive insurance! Ain't their business anyway!)
An applicant who receives a preferred risk classification qualifies for
Lower premiums than the person who receives a standard risk
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report
What is the definition of a unilateral contract?
One-sided: only one party makes an enforceable promise
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
Pay the policy proceeds only if it would have issued the policy
What describes the specific information about a policy?
Policy summary
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
Premium receipt
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 (Preferred risk insurance is for fancy healthy folks, they pay the lowest. Standard is in the middle)
Which of the following is NOT the consideration in a policy? *The application given to a prospective insured *Something of value exchanged between parties *The premium amount paid at the time of application *The promise to pay covered losses
The application given to a prospective insured (I don't know what this answer means but i do know that considerations ARE something of value that is exchanged between two parties and of course the client needs to know what they are paying and what they are receiving)
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 values
They must be part of the contract (for whatever reason you don't have to put illustrations in the contract.. just remember it)
Agent/Producer
a legal representative of an insurance company
Premium
an amount to be paid for an insurance policy.
Adverse Selection
insuring of risks that are more prone to losses than the average risk
Beneficiary
one who receives benefits from insurance policy
Death Benefit
the amount paid upon the death of the insured in a life insurance policy