Life Insurance Questions Part 2

Under which of the following employers provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? A. Disability income B. Major Medical C> Dental Expense D. Basic Medical Expense

A. Disability income The part of the benefits that is provided by the employers's contribution is income taxable to the employee

All of the following are licensing requirement for a business entity EXCEPT? A. Having all employees complete continuing education course once every 2 years. B. Demonstrating general fitness, competence and reliability C. Maintaining on staff at least 1 licensed person in good standing D. Applying for a license in the same line of Authority as held by licensed designees.

A. Having all employees complete continuing education course every 2 years

What is a foreign insurer? A. An insurer with licensed agents who are citizens in more than one country B. An insurer with a home office in another state C. An Insurer with a home office in another country D. An insurer with licensed agents doing business in other countries

B. An insurer with a home office in another state A domestic insurer's home office is in this state, a foreign insurer's is in another state and an alien insurer's is in another country

All of the following are characteristics of a Major Medical Expense policy EXCEPT? A. Blanket coverage B. Coinsurance C. Low maximum limits D. Deductibles

C. Lower maximum limits Major Medical Expense contract are characterized by high maximum limits, Blanket coverage, coinsurance and a deductible

The Federal Fair Credit Report Act? A. Regulates telemarking B. Prevents money laundering C. Regulates consumer reports D. Protects customer privacy

C. Regulates consumer reports The Fair Credit Reporting Act regulates consumer reports, also known as consumer investigative reports, or credit report

Which nonforfeiture option provides coverage for the longest period of time? A. Extended term B. Paid up option C. Accumulated at interest D. Reduced paid up

D. Reduced paid up the reduced paid up nonforfeiture option would provide protection until the insured reaches 100 but the face amount is reduced

Peril is most easily defined as A. The cause of loss insured against B. An unhealthy attitude about safety C. The chance of loss occurring D. Something that increase the chance of loss

A. The cause of loss insured against Peril are the cause of loss insured against in an insurance policy

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy? A. The death benefits will be smaller B. The death benefits will be forfeited. C. The death benefits will be the same as the original face amount D. The death benefits will be larger

A. The death benefits will be smaller If an insured withdraws a portion of the death benefits by uses of this rider, the benefits payable at death will be reduced by that amount, plus the amount of earnings lost by the insurance company in interest income

At the time of initial licensing, what fee must a viatical settlement provider pay? A. $50 B. $100 C. $200 D. $300

D. $300 Viatical settlement providers must pay a fee of $3000 at the time of their initial and renewal application

Which of the following is the most common time for errors and omission to occur on the part of an insurer? A. Application process B. Policy delivery C. Policy renewal D. Underwriting

B. Policy delivery Insurers are encouraged to document all conversations and correspondence that occurs

Annuities can be used to fund which of the following? A. Group life insurance B. Estate creation C. Retirement plans D. Variable life insurance

C. Retirement plans Since annuities are a popular mean to provide retirement income, they are often used to fund qualified retirement plans

Which of the following is an example of a peril covered in an accident and health insurance policy? A. Smoking B. Death C. Sickness D. Alcoholism

C. Sickness There are two major causes of loss (or perils) covered under a. health insurance policy.: sickness and accident. Smoking and alcoholism would be considered hazards that may cause a loss

All of the following coverage are usually included under a dental insurance plan EXCEPT? A. Routine examinations B. Braces and appliances C. Teeth whitening D. Oral surgery

C. Teeth whitening Diagnostic care and preventative care are both included in a dental insurance plan, including oral surgery, routine examinations, and braces or other appliances.

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? A. The Guaranty Association B. Consumer Privacy Act C. The Fair Credit Reporting Act D. Unfair Trade Practice Law

C. The Fair Credit Reporting Act The purpose of the Fair Credit Reporting Act is to protect consumers against the circulation of inaccurate or obsolete information and to ensure that consumer reporting agencies are fair and equitable in their treatment of consumers.

The two types of assignments are? A. Absolute and collateral B. Absolute and partial C. Complete and partial D. Complete and proportionable

A. Absolute and collateral Absolute assigns the entire policy, Collateral assigns a part or all of the benefits.

Which of the following would be considered an unfair claims settlement practice? A. Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered. B. Requesting the insured to submit a signed proof of loss statement, after the insured has already verbally advised the insurer of the claim C. Requesting the insured swear under oath concerning the facts of the claim D. Delaying the settlement of a claim for 30 days in order for the insured

A. Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following informationEXCEPT the applicant's? A. Ancestry B. Credit history C. Habits D. Prior insurance

A. Ancestry The Fair Credit Act regulates what information may be collected and how the information may be used. Ancestry is not a relevant factor assessed in these reports

An insured receives an annual life insurance dividend check. What term best describes this arrangement? A. Cash option B. Reduction of Premium C. Annual Dividend Provision D. Accumulation at interest

A. Cash option The cash option allows an insurer to send the policyholder an annual, nontaxable dividend check.

When the commissioner suspects that a person is violating an insurance law or other regulation, what can be issue that would order the person to stop committing the act of violation? A. Cease and Desist Order B. Stop Action Order C. Limitation of Authority Order D. Suspension of Power Order

A. Cease and Desist Order Whenever it appears that any person is violating an insurance law of Pennsylvania or any rule or regulation made by the Commissioner, the Commissioner may issue a cease and desist order

If an applicant for health insurance policy is found to be a substandard risk, the insurance company is most likely to? A.Charge an extra premium' B. Require a yearly medical examination C. Lower its insurability standards D. Refuse to issue the policy

A. Charge an extra premium The premium rate will be adjusted to reflect the insurer's increased risk

Which of the following increases in the increasing term insurance? A. Death benefits B. Cash value C. Interest on the proceeds D. Premium

A. Death benefits Increasing term feature level annual premiums and a death benefits that increase each year over the duration of the policy term

What is an important feature of a dental expense insurance plan that is NOT typically in a medical expense insurance plan? A. Diagnostic and preventive care B. A broad coverage area C. A low monthly premium D Low cost deductibles

A. Diagnostic and preventive care Dental expense insurance is a form of medical health insurance that covers the treatment, care and prevention of dental disease and injury to the insured/s teeth.

Which is TRUE about the cash surrender nonforfeiture option? A. Funds exceeding the premiums paid are taxable as ordinary income B. After the cash surrender, the insured is covered for a grace period of one moth C. The policy remains active for some time after the policyholder opts for cash surrender. D. The policyholder receives the original cash value of the policy

A. Funds exceeding the premiums paid are taxable as ordinary income The insurers surrender the policy at its current cash value. Only any excess of value is taxable as income. Once the policyholder opts for cash surrender, the policy is immediately inactive

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. Guaranteed surrender value B. No payments C. Annuity dividends D. Full premium refund without any charges

A. 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

Which of the following does a producer NOT have the authority to do? A. Issue policies B. Deliver policies C. Solicit insurance contracts D. Negotiate contract of insurance

A. Issue policies AN insurance producer sells, solicits or negotiate contracts of insurance

All of the following are considered unfair trade practice in the business of insurance EXCEPT? A. Sharing commissions B. Boycott C. Rebating D. Defamation

A. Sharing Commissions Sharing commissions is allowed as long as both producers are properly licensed.

Events in which a person has both the chance of winning or losing are classified as? A. Speculative risk B. Insurable C. Pure risk D. Retained risk

A. Speculative risl Speculative risk involves the chance of gain or loss and is not insurable

Which of the following types of risk results in the highest premium? A. Substandard risk B. Standard risk C. Preferred risk D. All risks pay equal premiums

A. Substandard risk The "Substandard" rating indicates that an individual represents an under- average insurance risk because of physical condition, personal or family history of disease, occupation, habits or hobbies.This rating incurs the highest premiums if policy is issued.

Which of the following is NOT true of basic medical expense plans? A. Low dollar limits B. Coverage for catastrophic medical expenses C. No deductibles D. First dollar coverage

B. Coverage for catastrophic medical expenses Basic medical expense plan were characterized by first dollar coverage (no deductible) and low dollar limits, which meant they afforded no protection to an individual or family against catastrophic medical expenses that could be financially disastrous

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT? A. An offer to share in commissions generated by the sale B. Dividends from a mutual insurer. C. An offer of employment D. Stocks, securities or bonds

B. Dividends from mutual insurer Dividends paid to policyholders of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid

The provision that states that both the printed contract and a copy of the contract between the policyowner and the insurer is called? A. Master policy B, Entire contract C. Certificate of insurance D. Aleatory contract.

B. Entire contract The policy together with the attached application, constitutes the entire contract. This provision limits the use of evidence other than the contract and the attached application in a test of the contracts validity. This is a mandatory provision in life insurance.

All of the following violations may be results in an agent's imprisonment EXCEPT? A. Engaging in the business of insurance after being convicted of breach of trust. B. Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction C. Embezzling funds from another insurer D. Knowingly obtaining information about about consumer under false pretenses.

B. Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction While the agents are required to notify the department about any administrative action or criminal prosecution taken against them, that act alone will not result in imprisonment. all the others re violations that may be punished by imprisonment

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describe this practice? A. Defamation B. Illegal C. A legal advertising strategy D. Unfair Discrimination

B. Illegal It is illegal to participate in any boycott, coercion, or intimidation that is intended to restrict fair trade or create a monopoly

Which of the following statements is true concerning the creditors of the deceased insured? A. The creditors of the deceased insured have no right to the proceeds of life insurance under any circumstances B. The creditors have rights to the proceeds if they can show evidence of valid assignments C. Anyone may put a lien against the proceeds of a life insurance policy D. Non of the above is true

B. The creditors have rights to the proceeds if they can show evidence of valid assignments. Proceeds of life insurance are exempt from claims of creditors except in certain situations,. If creditors can show evidence of valid assignment, if premiums were used to defraud creditors, or if the insured had filed for bankruptcy in the last two years creditors have rights to the proceeds of life insurance

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? A. The customer has no knowledge of his action B. The customer's associates, friends, and neighbors provides the report's data C. They provide additional information from an outside source about.a particular risk D. They provide information about a customer's character and reputation

B. The customer's associates, friends, and neighbors provides the report's data Both consumer reports and investigative consumer reports provide additional information from an outside source about a customer's character and reputation, and both types of reports are used under the Fair Credit Reporting Acts. The main difference in that the information for investigative consumer reports is obtained through an investigative and interviews with associates, friends and neighbors of the consumer.

All fo the following are TRUE regarding the convertibility option under a term life insurance EXCEPT? A. Upon conversion, the premiums for the permanent policy will be based upon attained age B. Upon conversion, the death benefits of the permanent policy will be reduced by 50% C. Evidence of insurability is not required D. Most term policies contain a convertibility option

B. Upon conversion, the death benefits of the permanent policy will be reduced by 50% Convertible term insurance is convertible without proof of insurability up to the full term benefit. However, upon conversion the premium for the permanent policy will be based on the insured's on the insured's attained age.

An insured purchased a 15 yer level term life insurance policy with a face amount of $100,000. The policy contained an accident death rider, offering a double indemnity benefits. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injured. what amount would his beneficiary receive as a settlement? A. $0 B. $1000,000 C. $200,000 D. $100,000 plus the total of paid premiums

C. $200,000 The beneficiary would most likely receive twice the face value of the policy since his injures were caused by an accident and he died within the 90 day benefit limit stipulated in most policies

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statement related to the business of insurance may be imprisoned for up to? A. 3 years B. 5 years C. 10 years D. 12 years.

C. 10 years Anyone engaged in the business of insurance whose activities affect interstate commerce, and who knowingly makes false material statement may be fined, imprisoned for up to 10 years or both. if the activity jeopardized the security of the accompanied insurer, the punishment can be up to 15 years.

Which of the following is TRUE about a class designation? A. It is not allowed B. It determines the succession of beneficiaries C. Beneficiaries are not identified by name D, Beneficiaries must be part of the insured's immediate family

C. Beneficiaries are not identified by name A class of beneficiary is using a designation such as "my children" This can be a vague term if the insured has been married more than once, or has adopted or illegitimate children. Many insurers encourage the insured to name each child specifically and to state the percentage of benefit they are to receive.

An agent selling variable annuities must be registered with A. The Guaranty Association B. SEC C. FINRA D. Department of Insurance

C. FINRA Because variable annuities are considered to be securities, a person must be registered with the FINRA and hold a securities license in addition to a life agent's license in order to sell variable annuities

All of the following would fall under the definition of Durable Medical Equipment EXCEPT? A. Wheel chairs B. Hospital Bed C. Hospital Blankets D. Oxygen equipment

C. Hospital blankets Durable Medical Equipment is medical equipment such as oxygen equipment, wheel cars and other medically necessary equipment that a doctor prescribes for use in the home

When would a misrepresentation on the insurance application be considered fraud? A When the application is incomplete B. Any misrepresentation is considered fraud C. If it is intentional and material D. never: statements by the applicant are only representation

C. If it is intentional and material A misrepresentation would be considered fraud If it is intentional and material Fraud would be grounds for voiding the contract.

Which of the following factors about insured determines the amount of disability Benefits that the insured will receive? A. Marital status B. Age C. Income D. Gender

C. Income Disability benefits are paid to those who are unable to work as they normally would, due to an accident or illness, Benefits are designed to help the insured recover income lost as a result of the disability

State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT A. Promising returns and profits from the purchase of insurance B. Offering benefits certificate or securities in return for purchasing insurance C. Inviting prospective clients to the gran opening of the company's new office D. Issuing or delivering insurance company stock in return for purchasing insurance

C. Inviting prospective clients to the grand opening of the company's new office Inducement is an illegal practice. it involves offering anything of value to a prospective client that is not specified in the policy as an incentive to buy insurance. Stock, bonds, benefits certificates, dividends or profits could be used as inducement

What is the benefits of choosing extended term as a nonforfeiture option? A. It allows for coverage to continue beyond maturity date B. It can be converted to fix annuity C. It has the highest amount of insurance protection D. It matures at age 100

C. It has the highest amount of insurance protection Under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy. The duration of the new term coverage lasts for as long as.a period as the amount of the cash value will purchase.

Which of the following riders added to a life insurance policy can pay part of the death benefits to the insured to cover expenses incurred in. a nursing or convalescent home? A. Guaranteed insurability B. Payor benefits C. Long term care D. Accident death

C. Long term care Long term care rider provides for the payment of part of the death benefits ( called accelerated benefits) in order to take care of the insured's health care expenses, which are incurred in a nursing or convalescent home.

An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits? A. Partial benefits B. Full benefits until blindness lifts C. no benefits D. Full benefits

C. No benefits Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness , or loss of speech or hearing. Benefits are paid even if the insured is able to work. Because the insured blindness was only temporary and the loss of use in only 1 leg. he does not qualify for presumptive disability benefits

Which of the following provision would prevent an insurance company from paying a reimbursement claim to someone other than the policy owner? A. Entire contract clause B. Proof of loss C. Payment of claims D. Change of beneficiary

C. Payment of claim The Payment of claim provision states that the claim must be paid to the policyowner, unless the death proceeds need to be paid to the beneficiary

Which of the following best describes a pure life annuity settlement option? A. Benefits are paid for a fixed period of time, specified when the policy begins to pay B. Pure life provides payment for as long as both the annuitant and the spouse are living C. Pure life provides payment for as long as the annuitant is alive D. Pure life guarantees that all the proceeds will be paid out

C. Pure life provides payment for as long as the annuitant is alive Pure or straight life annuity settlement option will pay for as long as the annuitant lives.

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statement is TRUE? A. A corporation can be an annuitant as long as the beneficiary is a natural person B. The contract can be issued without an annuitant C. The annuitant must be a natural person D. A corporation can be an annuitant as long as it is also the owner.

C. The annuitant must be a natural person Owners of annuities can be individuals or entitles like corporations and trust, but the annuitant must be a natural person, whose life expectancy is taken into consideration for the annuity

All of the following are true of an annuity owner EXCEPT? A. The owner has the right to name the beneficiary' B. The owner is the party who may surrender the annuity' C. The owner must be the party to receive benefits D. The owner pays the premiums on the annuity.

C. The owner must be the party to receive benefits The "owner" is the person who purchase the contract and has all of the following rights such as naming the beneficiary and surrendering the annuity. The owner, however does not have to be the one who receives the benefits, it could be the annuitant (if different from the owner) or the beneficiary

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of? A. Misrepresentation B. Rebating C. Twisting D. Defamation

C. Twisting Twisting is a misrepresentation that persuades an insured or a policy owner, to his or her detriment, to cancel, lapse or switch policies.

Who is involved in completing the agent's report A. The agent and the applicant B. Only the underwriter, if no agent C. Attending physician and the agent D. Only the Agent

D, Only the agent Only the agent is involved in completing the agent's report. It asks questions about the length of time that the applicant has been known to the agent, an estimate of the applicant/s income and net worth and whether the agent knows any reason that the contract should not be issued. The agent statement does not become part of the "entire contract"

Jason is insured under his employer's group health insurance. He splits the cost of the premium with his employers. this is an example of? A. A noncontributory plan B. A half and half plan C. A copay plan. D. A contributory plan

D. A contributory plan With a contributory plan the eligible employees contributes to payment of the premium (both the employee and employers pay part of the premium

Which of the following would be required to be licensed as an insurance producer? A. A person whose activities are limited to producing insurance advertisement B. A salaried full time employee who furnishes information for group insurance C. An insurance company director who performs executive, administrative and managing duties D. A salaried employee who advertises and solicits insurance

D. A salaried employee who advertises and solicits insurance A person does not require an insurance producer license if he or she only advertise without intent to solicit insurance. However once these is solicitation, a license is required

A producer who fails to separates premium monies from his own personal funds is guilty of A. Larceny B. Embezzelment C. Theft D. Commingling

D. Commingling It is illegal for insurance producer to commingle premiums collected from the applicant with their oen personal funds

If an annuitant dies before annuitization occurs, what will the beneficiary receive? A. Either the amount paid into the plan or the cash value of the plan, whichever is the least amount B. Amount paid into the plan C. Cash value of the plan D. Either the amount paid into the plan or the cash value, whichever is the greatest amount.

D. Either the amount paid into the plan or the cash value, whichever is the greatest amount If an annuitant dies before annuitization, the beneficiary will receive Either the amount paid into the plan or the cash value, whichever is the greatest amount

Why is it essential for an insurer to document all correspondence with an insured? A. Statistic gathering B. State law C. Federal Law D. Errors and omissions

D. Errors and Omissions Insures are encouraged to document all conversations and correspondence that occurs with an insured, in the event that crucial errors and omission should occur. The most common times for those errors are during the sale interview and policy delivery. it is essential to have proof of these interaction, in the event that in insured would sue the insurer

What type of insurance would be used for a Return of Premiums rider? A.Level Term B. Decreasing Term C. Annually Renewable Term D. Increasing Term

D. Increasing Term The Return of Premiums Rider is achieved by using increasing term insurance. When added to a whole life policy, it provides that at death prior to a given age, not only is the original face amount payable, but also all premiums previously paid are payable to the beneficiary

Under which of the following annuity options does the annuitant select the time period for the benefits and the insurer determines how much each payment will be? A. Installment for a fixed amount B. Installment refund C. Cash refund D. Installment for a fixed period

D. Installment for a fixed period Under the installment for a fixed period option the annuitant selects the time period of the benefits and the insurer determines how much each payment will be.

The selection of a health policy that states the cause of eligible loss under which insured is assumed to be disabled is the A. Incontestability clause B. Consideration clause C. Probationary period D. Insuring clause

D. Insuring clause The insuring clause is a provision on the first page of the policy that states the coverage and when it applies

Which of the following best describes a misrepresentation? A. Making a deceptive or untrue statement about a person engaging in the insurance business B. Making a maliciously critical statement that is intended to injure another person C. Discriminating among individuals of the same insuring class D. Issuing sales material with exaggerated statement about policy benefits.

D. Issuing sales material with exaggerated statement about policy benefits Misrepresentation is issuing, publishing or circulating any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. this includes oral statements

All of the following statement about Medicare Part B are correct EXCEPT? A. It covers services and supplies not covered by Part A. B. It is financed by monthly premiums C. It is financed by tax revenues D. It is compulsory program

D. It is compulsory program Part B elective. Individual become eligible for Part B at the same time they become eligible for Part A, however, Part B requires that a monthly premium be paid

Variable whole life insurance is based on what type of premiums A. Increasing B. Flexible C. Graded D. Level fixed

D. Level fixed Variable Whole life insurance is a level fixed premium investment based product

What are the licensing requirement for someone who sells variable Universal life insurance? A. Life Insurance B. Securities C. Universal and variable products D. Life insurance and securities

D. Life insurance and securities An individual must be licensed for both securities and life insurance in order to sell variable universal life

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims, The company is guilty of A. Concealment B. Unfair claim practice C. Rebating D. Misrepresentation

D. Misrepresentation Issuing or circulating any sales material is false or misleading would be considered misrepresentation and is illegal

Which of the following do the Standard and Preferred risk categories share? A. More medical evaluation are required. B. Possible modification to include expanded coverage C. Permanent coverage D. Premiums are not elevated

D. Premiums are not elevated The "Standard" rating indicates that an individual represents a similar level of health and lifestyle quality as other members of the same age cohort.

An inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as? A. Twisting B. False advertising C. Coercion D. Rebating

D. Rebating Rebating is defined as any inducement offered to the insured in to the sale of insurance production that is not specified in the policy. Both the offer and acceptance of a rebate are illegal

Which type of dental care would cover the cost of fillings. A. Endodontic B. Orthodontics C. Oral Surgery D. Restorative

D. Restorative Restorative care re-establishes functional use to natural teeth, such as the application of fillings and crowns

A domestic insurer issuing variable contracts must establish one ore more? A. Liability accounts B. Annuity accounts C. General accounts D. Separate accounts

D. Separate account Any domestic insurer issuing variable contrast must establish one or more separate accounts. The insurer must maintain in each separate account assets with a value at least equal to the reserves and other other contract liabilities connected to the account.

According to the privacy of consumer financial information regulation, if a consumer decides to opt out, this means? A, The consumer gives the licensee an in conditional right to share the consumer's nonpublic financial information with a third part B. The consumer has chosen not to participate in insurance contracts with the insurer C. The consumer declined the nonforfeiture options available in the policy D. The consumer directs the licensee not to disclose the consumer's nonpublic personal financial information a a third party

D. The consumer directs the licensee not to disclose the consumer's nonpublic personal financial information a a third party As it pertains to the privacy of consumer financial information regulation, the term opt out means a direction by the consumer that the licensee not disclose his or her nonpublic personal financial information to a third party.

Which is generally true regarding insureds who have been classified as preferred risks? A. They can borrow higher amounts off their policy B. They can decide when to pay their monthly premiums C. They keep a higher percentage of any interest earned on their policies D. Their premiums are lower

D. Their premiums are lower The preferred risk classification indicates that an insured is in excellent physical condition and employs healthy lifestyles and habits. These individuals qualify for lower premiums than those in other categories

All of the following are requirements for life insurance illustration EXCEPTS? A. They may only be used as approved B. They must identify non-guaranteed values C. They must differentiate between guaranteed and projected amounts D. They must be part of the contract

D. They must be part of the contract An Illustration may not be altered by an agent and must clearly state that it is not part of the contract. It is legal to list non-guaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values.

An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this? A. Legal action B. Proof of loss C. Payment of claims D. Unpaid premium

D. Unpaid Premiums If a premium is past due and the insurer owes claim payment, the amount of the premium will be deducted from the amount of the claim. For example if a claim is worth $500 and the premium cost $200, the insured would receive the net total of $300 from the insurer

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report? A. Are entitled to obtain a copy of the report from the party who ordered it B. Must be advise that a copy of the report is available to anyone who request it C. May sue the reporting agency in order to get inaccurate data corrected D. Must be informed of the source of the report.

D. must be informed of the source of the report Under the Fair Credit Reporting Act, if an insurance policy is declined or modified because of information contained in a consumer report, the consumer must be advised and provided with the name and address of the reporting agency