Credit Life and Disability Test

The term of the coverage, for a credit life or credit health policy, may not exceed more than ____ days beyond the scheduled maturity date of the debt, except when extended without additional cost pursuant to written agreement.

15

The contestable period becomes effective after?

2 years

The time limit on certain defenses is:

2 years from the effective date of the policy.

An applicant that has been denied an insurance license has how may days to request a hearing to protest the denial?

30

Proof of insurance (a certificate of insurance) must be delivered to the insured debtor within ___ days of incurring the debt.

30

The commissioner has _____ days after receipt to approve or disapprove policies, forms, premiums, etc.

30

The commissioner must be notified of any change of mailing address of producer within:

30 days

The Commissioner is the chief executive officer of the Office of Financial and Insurance Regulations. The Commissioner is appointed by the Governor, with the consent of the Senate, for a term of ___ years.

4

Per the insurance rules in the state of Michigan, as it pertains to credit life insurance, insurers shall not refuse to insure, refuse to continue to insure, or limit the amount of insurance available to an individual because the person is age:

70

A producer cannot complete his continuing education before his review date. He is given a grace period of how many days?

90

Any producer of insurer that is in violation of the credit insurance act is subject to a minimum penalty of:

A fine of $250

Which of the following would not have to be licensed?

A person collecting premiums in a home office

Which of the following is true regarding licensing of producers?

A salaried officer of an insurer may function as a producer without being licensed.

Which of the following is not a risk classification involved in a life and health insurance application?

Adverse risks

Which of the following is considered a risk?

An individual may may need to seek medical attention after falling off a ladder.

Which of the following would be true concerning risk?

An insurable pure risk only involves the possibility of loss.

Which of the following is not a standard provision in a life insurance contract?

Backdating a policy

The type of payment is simply an installment loan with a single, usually large payment due as the loan matures best describes?

Balloon Payment

Which of the following would NOT be considered to have an insurable interest?

Business Owner and customer.

Insurance

Can be defined as the spreading of financial risk over a large group of people in order to ;minimize the potential economic loss to any one individual.

Which of the following is not considered a credit transaction?

Cash purchase of an I-pod

In accordance with the Credit Insurance Act, an automobile dealership which leases vehicles to customers is a (an):

Creditor

Is the lender of money or vendor or lessor of goods, services, property, rights or privileges, for which payment is arranged through a credit transaction or any successor to the right, title or interest of any such lender, vendor or lessor.

Creditor

Coverage offered for the full term of the loan, but with the benefit limited to a specified number of monthly payments, or the remaining payments if less, best defines:

Critical Period Disability coverage

Credit Life insurance generally uses which type of term insurance?

Decreasing term.

The term used to describe a statement(s) which are false, malicious or derogatory regarding an insurer or any person engaged in the business of insurance is.

Defamation

With regards to credit unemployment insurance, which of the following is not considered involuntary termination:

Disability

The Office of Financial and Insurance Regulations (OFIR) primary function is to

Enforce insurance laws

The provision which states that the policy is complete, and there are no other agreements as part of the policy is the:

Entire contract provision

Which of the following would not be an element of an insurance contract?

Incompetent party

Which of the following concepts is considered the ability to predict the approximate number deaths or frequency of disabilities within a certain group during a specific time?

Law of Large Numbers

Which of the following is NOT considered a characteristic of an insurable risk?

Loss must be small

Mark has an insurance policy whereby he votes at company annual meetings, and shares in any profits of the company. Mar's policy was issued by which type of insurer?

Mutual Company

Mike, a producer, has lost his appointment with the insurer due to embezzlement. The insurer must:

Provide supporting evidence to the Commissioner regarding the cancellation of the appointment

Is any inducement in the sale of insurance which is not specified in the insurance contract.

Rebating

Which of the following would NOT be a method of handling (coping with) risk?

Risk Reliance

Which of the following is a type of insurance company that is owned by its shareholders?

Stock

Adverse selection means

That there are more insurance risks selected that have a possibility of loss than standard risks.

Which of the following is not considered to be a source of underwriting information?

The Department of Insurance (OFIR)

The law of large numbers states that:

The accuracy with which an insurer can predict the likelihood of a particular event increases as the number of people that share the risk of that particular event increases.

A fraternal benefit society member wrote life insurance on 35 lives last year with a total death benefit of $75,000. Which of the following is correct?

The individual must be licensed as a producer.

A producer has a fiduciary responsibility to all of the following except:

The insurance commissioner

Which of the following is true with regard to the minimum time that the insured may bring legal action against an insurer?

The insured may bring legal action against the insurer after 60 days of filing a claim.

Which of the following would not be classified as an insurable pure risk?

The loss must be catastrophic

Which of the following is not required to be included on a Certificate of Insurance?

The name and address of the insurance producer.

A stock insurance company pays dividends to:

The stockholders of the insurance company

Statements made on an application for insurance are considered to be representations. This means:

Those statements concerning a material fact are true to the best of knowledge and belief of the applicant.

Coverage offered during a portion of term of the loan. Benefits are paid only if the disability occurs during the term of coverage. Monthly benefit payments continue only until the end of the term of insurance. this best defines:

Truncated Coverage

Which of the following is correct regarding approved credit policy forms which are disqualified by the commissioner?

With 20 days prior notice and a hearing, the commissioner may withdraw approval of policy forms.

All of the following are true regarding credit insurance except:

a certificate of group credit insurance must be delivered with 60 days of incurring the debt.

Providing an incomplete comparison of two company's products for the purpose of inducing a person to drop an existing policy is an example of:

a misrepresntation

An individual who refers large numbers of consumers to lenders for credit transactions is a (an):

affiliate

A producer has all of the following duties except:

annually providing the commissioner with a list of all policies sold.

Upon an insured's death, the indebtedness is paid off, but there is a $500 of excess credit life insurance. This excess will:

be paid to the debtor's beneficiary.

An applicant will be denied an insurance license for:

convicted of a felony.

Open end credit insurance refers to:

credit card transactions

Is a borrower of money or a purchaser or lessee of goods, services, property, rights or privileges for which payment is arranged through a credit transaction

debtor

Circulating derogatory or malicious information with the intent to do harm to an insurer is:

defamation

All credit insurance sold shall be evidenced by a (an):

either an insurance policy or a certificate of insurance.

The change of occupation provision

is an optional provision

An appointment:

is needed to sell insurance in Michigan

The credit insurance license is a:

limited lines license

If an indebtedness matures early, existing credit insurance premiums:

may be refunded or creditor to the debtor

A debtor's indebtedness matures on June 1. The term of the debtor's credit life insurance:

may extend until June 15

A consumer:

may purchase credit insurance as part of a credit transaction.

Brokerage is permitted in Michigan if:

never.

Credit A&H insurance is designed to:

pay monthly credit installments when the debtor is totally disabled.

A one-time period of time that begins with the effective date of the policy and does not pay for sickness claims for the first 30, 60 or 90 days of the policy best describes:

probationary period

Which of the following is not required to form a valid contract?

promise on the part of both parties.

The purpose of the Michigan Life and Health Insurance Guaranty Association is:

protect the policyowner against failure in the performance of contractual obligations of certain insurance policies

All of the following would be considered coercive occupations except:

real estate sales person

Offering a prospect one-half of the commission as part of an insurance transaction is an example of:

rebating

Which of the following is true regarding the Licensed Insurance Counselor's license?

the counselor may receive fees.

The total amount payable by a debtor to a creditor as part of a credit transaction is:

the indebtedness

In accordance with the Credit Insurance act, the commissioner has all of the following authorities except:

the issuance of a Licensed Insurance Counselor's License for the purpose of transacting credit insurance business.

The insurance commissioner has all of the following responsibilities except:

to charge witnesses with contempt of court.

"The inability to perform the duties of your occupation", best defines:

total disability

Buying insurance is a means of

transferring risk

A producer is convicted of routinely misrepresenting benefits in insurance policies, he may be fined up to:

$25,000 for all violations

If a producer writes $20,000 of life insurance premium in a 12 month period, how much of this amount can be controlled business?

$3,000