Insurance Test Question

All of the following are examples of risk retention EXCEPT a) Premiums. b) Deductibles. c) Copayments. d) Self-insurance.

A. Premiums Retention is a planned assumption of risk, or acceptance of responsibility for the loss by an insured through the use of deductibles, copayments, or self-insurance.

Which of the following types of agent authority is also called "perceived authority"? A. Fiduciary B. Apparent C. Express D. Implied

B. Apparent Apparent Authority (also known as perceived authority) is the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.

Pertaining to insurance, what is the definition of a fiduciary responsibility? A. Offering additional coverage to clients B. Promptly forwarding premiums to the insurance company C. Helping insureds to file claims D. Performing reviews of insured's coverage

B. Promptly forwarding premiums to the insurance company. Fiduciary refers to a position of trust. When an agent is handling the premiums that belong to an insurance company, they are acting in a fiduciary capacity.

The following are features of the Indexed Universal Life EXCEPT a) Policy's cash value is dependent on the performance of the equity index. b) Sale of this product requires a securities license. c) Flexible premium. d) Adjustable death benefit.

B. Sale of this product requires a securities license. Indexed Universal Life policies have name of the same features as the Universal Life: flexible premiums, adjustable death benefits, and an investment component. However, the policy's cash value is dependent upon the performance of the equity index. Sale of the Indexed Universal Life products does not require a securities license.

Once a producer's appointment is filed, within how many days will the Commissioner verify the appointment (for eligible producers)? a) 3 days b) 10 days c) 15 days d) 30 days

C. 15 Days If the producer is eligible, the Commissioner will verify the appointment by electronic message within 15 days of receiving the notice from the insurer. However, if the producer is deemed ineligible, the Commissioner will notify the insurer within 10 days.

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be a)Qualified. b)Approved. c)Authorized. d)Certified.

C. Authorized Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.

In insurance transactions, fiduciary responsibility means A. Being liable with respect to payment claims B. Commingling premiums with agent's personal funds. C. Handling insurer funds in a trust capacity D. Maintaining a good credit record

C. Handling insurer funds in a trusted capacity An agent's fiduciary responsibility includes handling insurer funds in a trust capacity

In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT a) The premium. b) The amount of insurance. c) The type of investment. d) The length of coverage.

C. The Type of Investment Typically, the owner of an adjustable life policy has the following privileges: increasing or decreasing the premium, changing the premium-paying period, increasing or decreasing the face amount of coverage, or changing the period of protection.

All of following are the general qualifications for a producer's license EXCEPT a) Pass any required examination. b) Be a trustworthy person. c) Pass a criminal background check. d) Be at least 21 years of age.

D. Be at least 21 years of age. The minimum age for insurance licensing in the state of Washington is 18 years of age or older.

When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having sever chest pains. This is an example of: A. Misrepresentation B. Fraud C. Warranty D. Concealment

D. Concealment Concealment occurs when a person withholds a material fact that is crucial to making a decision. In insurance, this involves withholding information that would be crucial to underwriting decisions.

According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following? a) No payments b) Annuity dividends c) Full premium refund without any charges d) Guaranteed surrender value

D. Guaranteed surrender value The nonforfeiture law stipulates that a deferred annuity must have a guaranteed surrender value that is available if the owner decides to surrender the annuity prior to annuitization.

Agent J offers his clients free tickets to sporting events in exchange for the purchase of an insurance policy. J is guilty of a)Coercion. b)Nothing. c)Misrepresentation. d)Rebating.

D. Rebating Rebating is defined as any inducement offered in the sale of insurance products that is NOT specified in the policy. Rebates include money, prizes, or merchandise, and could also include reductions in commissions, promises, employment, dividends, stocks, and personal services. Rebating is a violation of insurance law.

When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit? a) The insurance company b) The insured's estate c) The primary beneficiary's estate d) The insured's contingent beneficiary

D. The insured's contingent beneficiary Under the Uniform Simultaneous Death Law, the law will assume that the beneficiary dies first in a common disaster. This provides that the proceeds will be paid to the contingent beneficiary or to the insured's estate if none is designated.