General Insurance Quiz questions

-Family Dependency period -when bread maker dies and has children and spouse to support

A family's income need is greatest during which period?

-Family Dependency Period

A familys income need is greatest during which period

-commingling

A producer who fails to segregate premium monies from his own personal funds is guilty of what?

-Apparent

Because an agent is using stationary with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of the insurer, what type of agent authority does this describe?

-contracts of adhesion

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis

-Business partners in each other -Employer in Employee -Child in parent

Examples of insurable interest

-decreases

If an insured changes his payment plan from monthly to annually, what happens to the total premium?

-when an insurer's underwriter approves coverage

In forming a contract, when does acceptence usually occur?

-Waiver

In insurance policies, a ___________ is giving up ones known right or privilege

-not taxable since the IRS treats them as a return of a portion of the premium paid

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are

-Fraud

What is the intentional misrepresentation?

-vacation expenses for the family

Which of the following would Not be in the category of cost associated with death?

-Monthly

Which one of the following premium modes would result in the highest annual cost for an insurance policy?

-Putting the clients best interest before their own

In what way can you get an agent to demonstrate a high standard of ethics?

-express authority

The authority granted to an agent through the agents contract is referred to as

-Expenses

The factor added to the net premium to cover the cost of the insurer in obtaining and maintaining the business is called

-Social Security

Which of the following government programs allows a blackout period?

-representation

are statements that are true to the best of the applicants knowledge

-survivor protection

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

-certificate of authority

All insurers alien, foreign, and domestic must obtain a ____________ __ _________ before transacting business/insurance within a given state

-self insurance -co payments -deductibles -Premiums are NOT

All of the following are examples of risk retention

-"rated"

Another name for a substandard risk classification is

-unilateral contract

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe

-the frequency and the amount of premium payment

The mode of premium payment is defined as

-Blackout period

What begins when the youngest child reaches 16 and ends when the surviving spouse qualifies for the retirement benefits as early as age 60. No benefits are paid at this time.

-Agents contract with the principle

What documentation grants express authority to an agent?

-agent's contract with the principle

What documentation grants express authority to an agent?

-from the youngest child's age 16 -until surviving spouses age 60

Which of the following choices best describes the blackout period?

-policy summary

Which of the following documents delivered to the policy owner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years

-warranty

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

-cash value available to the policyowner

Which of the following is an example of liquidity in a life insurance contract?

-create an estate

Which of the following is the best reason to purchase life insurance rather than annuities?

-Admitted

Which of the following is the most precise synonym for an "authorized" insurer?

-rating the financial strength of insurance companies

Which services are associated with Standard & Poor's and AM Best?

-5 days

if a consumer request additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

-average risk (similar age / similar lifestyles)

standard risk means

-required a premium increase each renewal

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college, he discovered that his policy

-Retirement Period -Preretirement period -Family dependency period

All of the following are income periods

-Annually renewable Term

All other factors being equal, the least expensive first-year premium payment is found in

-moral hazard

An individuals tendency to be dishonest would be indicative of a

-31 days

Telemarketing organizations are required to consult the National Do Not Call Registry at least every

-As of the application date

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?

-conditional contract

The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved, this is an example of what kind of contract?

-Conditional Contract

What contracts requires both the insurer and policyowner to meet certain conditions before contract can be exceeded?

-Handling insurer funds in a trust capicity

What is Fiduciary Responsibility?

-Liquidation

What is the process of selling ones assets for money

-An applicant submits an application to the insurer

In insurance, an offer is usually made when?

-Agreement -Consideration -Competent Parties -Legal Purpose

In order for insurance contracts to be legally binding, they must have 4 essential elements

-promptly forwarding premiums to the insurance company

Pertaining to insurance, what is the definition of a fiduciary responsibility?

-as of the application date

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later. When does the policy coverage become effective?

-guides describing company financial integrity

What insurance concept is associated with the name Weiss and Fitch?

-Illustrations

What may not be altered by an agent and must clearly state that it is not part of the contract?

-National Do Not Call Registry

What was created to keep telemarketers from calling people who did not want to be contacted?

-National Do Not Call Registry

What was created to keep telemarketers from calling people who wish to not be contacted?

-implied

Which authority is not stated in an agents contract but is required for the agent to conduct business

-selection, classification, and rating of risk

Which of the following best details the underwriting process for life insurance?

-whether an insurable interest exist between the individuals

If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about what?

-debt status -income -mortgage -expenses -estimated longevity is NOT one of them

What are the 4 main types of information that an insurer needs to obtain in order to determine the value of someones life when using the NEEDS approach

-offer and acceptance -consideration -competent parties -legal purposes

What are the four essential elements of all legal insurance contracts?

-Policy Summary

What describes the the specific information about a policy?

-insureds cannot be randomly selected

Which statement regarding insurable risk is NOT correct?

-they may only be used as approved -they must identify non guaranteed values -they must differentiate between guaranteed and projected amounts -they must be part of the contract is NOT one of them

All of the following are requirements for life insurance illustrations

-waiver

An insurance company receives an application with some of the information missing and issues the policy anyways. What is this called?

-Consideration -Competent Parties -Offer and Acceptance

An insurance contract must contain all of the following to be considered legally binding

-Guides describing company financial integrity

What insurance concept is associated with the names Weiss and Fitch?

-an statement made by the applicant that upon discovery, would affect the underwriting decision of the insurance company

What is a material misrepresentation?

-the trust that a client places in the producer in regard to handling premiums

What is an example of a producer's fiduciary duty?

-family dependency period

What is the period, when the insured should die prematurely, the surviving spouse will have dependent children to support?

-to allow the consumers to compare the costs of different policies

What is the purpose of the buyer's guide?

-principal

What is the term for the entity that an agent represents regarding contractual agreements with third parties?

-liquidation

What is the term used when a person sells his assets as a way to gain money?

-Concealment

What is the witholding of information that will result in an imprecise underwriting decision?

-conditional

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

-Payment of Premium Clause

Which clause stipulates that life insurance premiums can be paid in advance of policy issuance?

-their premiums are lower

Which is generally true regarding insureds who have been classified as preferred risk?

-express and implied

Which of the following are authorities that an agent can hold?

-Annual cost of mortality + expenses

Which of the following best describes gross annual premium?

--morale

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

-Captive agent

An insurance producer who by contract is bound to write insurance for only one company is classified as a

-mutual

An insured purchased a life insurance policy 5 years ago. Last year, she received a dividend check from an insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

-Jumping Juvenile Policy

If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specific age, what type of policy is this?

-premium amounts -surrender values

Which of the following will be included in a policy summary?

-statement of good health -payment of premium -delivery receipt -signed waiver of premium is NOT one of them

Upon policy delivery, the producer may be required to obtain all of the following

-Human Life Value Approach

Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?

-private insurers may be authorized to transact insurance by state insurance departments

Which of the following statements is an accurate comparison between private and government insurers?

-calls based outside the US

Which of the following would NOT be considered an exception to the National Do Not Call Registry