Quiz 2
Which of the following applicants could the insurer charge a higher rate of premium and not violate regulations regarding unfair discrimination.
An applicant who is a smoker
What does "liquidity" refer to in life insurance policy?
Cash value can be borrowed at any time
How must a replacing producer respond to an applicant wishing to replace existing life insurance?
The producer must provide the applicant with a Notice Regarding Replacement.
What is the purpose of the buyer's guide?
To allow the consumer to compare the costs of different policies.
In the underwriting process, it was determined that the applicant for life insurance is in poor health and has some dangerous habits. Which of the following is true concerning the policy premium?
It will likely be higher because the applicant is a substandard risk.
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
If an agent fails to obtain the applicant's signature on the insurance application, what must the insurer do?
Return the application to the applicant for a signature
What is the purpose of key person insurance?
To lessen the risk of financial loss because of the death of a key employee.
If an applicant for a life insurance policy person to be insured by the policy are two different people, the underwriter would be concerned about.
Whether an insurable interest exists between the individuals
The mode of premium payment
Is defined as the frequency and the amount of the premium payment.
If an insured changes his payment plan from monthly to annually, what happens to the total premium?
It decreases
Which of the following statements is NOT true concerning insurable interest as it applies to life insurance.
A debtor has an insurable interest in the life of a lender.
When J.applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by.
A paramedic or examining physician at the insurer's expense.
Which of the following is usually true of a participating life insurance policy?
It may pay dividends to policyowners.
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?
Human life value approach?