NM Life Insurance Exam Ch. 2
c
The agent must provide the buyer's guide to the applicant: Select one: a. Upon application b. When the conditional receipt is given to the applicant c. When the policy is delivered d. Upon application or at the time of policy delivery if a 10-day free look is provided
d
A client applied for a $100,000 whole life policy, but did not pay the initial premium at the time of application. When the agent later delivers the policy and collects the premium, which of the following statements must be obtained from the client? Select one: a. A statement of no material change in risks b. A statement of insurability c. A statement of continued representations and warranties d. A statement affirming continued good health
b
A life insurance application can usually be backdated for a maximum of how many months? Select one: a. 3 months b. 6 months c. 9 months d. 12 months
d
According to the U.S. PATRIOT Act, which of the following is money laundering? Select one: a. Fraudulent use of public funds b. Computer crimes c. Illegal exportation of controlled munitions d. All of the above
c
All of the following correctly demonstrate policy delivery, EXCEPT: Select one: a. The insurance company mails the policy to the policyowner b. The insurance agent delivers the policy in-person c. The application is approved by the underwriter d. The insurance company mails the policy to the insurance agent, who in turn, delivers the policy to the policyowner
c
All of the following statements are true regarding warranties, EXCEPT: Select one: a. Warranties are statements that are guaranteed to be true in every respect. b. Insurance companies are held to the principle of warranties. c. Insureds are held to the principle of warranties. d. Breach of warranty is grounds for voiding an insurance contract.
a
At what age may a minor purchase a life or health insurance contract? Select one: a. 15 b. 16 c. 18 d. 21
c
If a premium payment has not been given with the application, the policy becomes effective only when the producer delivers the policy and: Select one: a. Provides a conditional receipt b. Secures the applicant's signed application and statement of continued good health c. Explains its provisions, secures the initial premium, and a signed statement of continued good health d. Explains its provisions and leaves a receipt for policy delivery
c
Quentin applies for a whole life insurance policy. When he hands his application to the agent, he does not include a check for the initial premium. The insurance company approves the application, issues the policy, and the agent delivers the policy to Quentin with a premium invoice. Aside from the initial premium, what must the agent collect from Quentin when the policy is delivered? Select one: a. Quentin's inspection report b. Quentin's medical history report c. Quentin's signed statement of continued good health d. Quentin's conditional receipt
b
Sam submits an application with initial premium for a life insurance policy on July 6th. The agent issues Sam a conditional receipt at this time. Sam takes the required medical exam on July 10th. The insurer approves the policy on August 1st, and the agent delivers the policy to Sam on August 10th. Which day did Sam's coverage begin? Select one: a. July 6th b. July 10th c. August 1st d. August 10th
d
The PATRIOT Act: Select one: a. Gives law enforcement officials more leeway to search email records b. Provides authority to immigration officials to detain and deport immigrants suspected of terrorist acts c. Authorizes a $10,000 per day fee for bank accounts that have been ordered closed, after the 10-day grace period d. All of the above
c
When completing the application, a producer should do all the following, EXCEPT: Select one: a. Make sure the applicant has completely filled out the application. b. Determine whether or not the applicant understands questions asked on the application c. Obtain the spouse's signature on the application, if the applicant is married d. Write and sign an honest opinion of the applicant and their integrity in the section for the Agent's Statement.
c
When is a conditional receipt normally given to an applicant? Select one: a. When the agent and applicant are notified coverage is available b. Upon the delivery of the policy c. Upon payment of the initial premium d. Upon the initial meeting
a
Which of the following administers the Do Not Call List? Select one: a. The FTC b. The SSA c. The state insurance department d. The department of public welfare
a
Which of the following correctly identifies the two types of conditional receipts? Select one: a. Insurability and approval b. Insurability and binding c. Binding and approval d. Binding and nonnegotiable
a
Which of the following correctly identifies the two types of premium receipts? Select one: a. Conditional and binding b. Binding and guaranteed c. Conditional and aleatory d. Binding and temporary
d
All of the following are part of the consideration element of an insurance contract, EXCEPT: Select one: a. The insurer's promise to pay a covered loss b. The applicant's statements on the application c. The initial premium paid by the applicant d. The applicant's promises
c
Anna applied for a $1 million life insurance policy and paid the first premium. Later she was declared uninsurable. Her agent gave her a receipt that guarantees coverage until the insurer formally rejects the application. Which type of receipt did Anna receive? Select one: a. Conditional b. Insurability c. Binding d. Approval
b
Both the producer and the ___________ are required to sign the insurance application. Select one: a. Insured b. Applicant c. Beneficiary d. All of the above
d
Constructive delivery has occurred in all of the following, EXCEPT: Select one: a. The insurer mails the policy to the producer, who mails the policy to the insured b. The producer mails the policy to the insured c. The insurer mails the policy directly to the insured d. The producer receives the application and issues a conditional receipt
a
Coverage begins on the application date or date of medical exam for which of the following? Select one: a. Insurability receipt b. Nonnegotiable receipt c. Premium receipt d. Approval receipt
a
Coverage is effective: Select one: a. With collection of the initial premium, approval of the application, policy issuance and delivery b. Upon collection of the application only c. Upon collection of the initial premium only d. When the applicant makes an offer to the insurer
d
Dale fills out a health insurance policy application, and hands it to his agent. Of the following statements, which is correct? Select one: a. Dale's policy is in force when he pays the initial premium. b. Dale's policy is in force when he hands his application to the agent. c. Dale's policy is in force when the insurance company issues the policy. d. Dale's policy is in force when the agent deliver's Dale's policy.
b
If a life insurance applicant is given a binding receipt, when does their coverage become effective? Select one: a. Date the policy is issued b. Date the receipt is given c. Date the policy is delivered d. Date the applicant proves insurable
c
If required by the insurer, the statement of good health must be collected by the producer at the time of: Select one: a. Policy application b. Policy issuance c. Policy delivery d. None of the above
a
Jeanine submits an application with initial premium for a $100,000 life insurance policy. She is issued a conditional receipt and is not required to take a medical exam. If Jeanine dies in a plane crash a week later, what will the insurer do? Select one: a. Pay $100,000 to Jeanine's beneficiary if Jeanine's policy would have been issued as applied for b. Pay $50,000 to Jeanine's beneficiary since Jeanine's death resulted from an accident c. Refund the initial premium to Jeanine's named beneficiary d. Void the policy, refund the initial premium and deny payment of the claim because the insurer did not approve Jeanine's coverage
d
John purchases a life insurance policy for his wife Jean. Which of the following best describes who is legally bound to the policy's promise of benefits? Select one: a. The insurer, John and Jean b. The insurer and John c. The insurer and Jean d. The insurer
a
Of the following, who must explain the reason for premium increases to a life insurance applicant? Select one: a. The agent b. The insurer c. The underwriter d. None of the above
d
Wesley fills out an application for a life insurance policy and submits it to the agent on January 5th. He does not include the first premium payment. Wesley undergoes the required medical examination on January 7th. The insurance company approves Wesley's application on January 15th. Wesley's agent delivers the policy to Wesley on January 17th. At this time, Wesley writes out a check for the initial premium. On what date is Wesley's policy effective? Select one: a. January 5th b. January 7th c. January 15th d. January 17th
c
Which of the following does not demonstrate constructive delivery? Select one: a. The agent mails the policy to the insured b. The insurer mails the policy to the agent, who in turn, mails the policy to the insured c. A conditional receipt is issued to the applicant d. The insurer mails the policy to the insured
c
Which of the following individual's missing signature deems a life insurance application incomplete? Select one: a. The primary beneficiary b. The executive officer of the insurance company c. The prospective adult insured d. The underwriter
d
Which of the following is a true statement? Select one: a. If an applicant needs to makes changes in their application, the agent should create a new form. b. After the applicant's signature, no changes can be made to that particular application. c. Any changes in the application must be signed by both the applicant and the agent. d. Any changes in the application must be initialed by the applicant.
b
Which of the following statements about a temporary insurance agreement is CORRECT? Select one: a. Coverage begins when the application is signed and the premium is paid, assuming any required medical exam is scheduled within three days. b. It provides temporary coverage until an application is rejected or the policy is issued. c. It provides protection against death by accident, but not death from natural causes. d. It provides term insurance protection until the policy is converted to permanent insurance.
c
Which of the following terms accurately describes the fact that insurance policies are, take it or leave it, contracts? Select one: a. Personal contract b. Unilateral c. Contract of adhesion d. Aleatory
a
Why are life and health insurance contracts said to be contracts of adhesion? Select one: a. Because the insurer writes the contract, to which the insured must adhere b. Because only the insurer is bound to the promises made in the policy c. Because one party has the potential to receive more than the other d. Because certain conditions must be met by all parties of the contract in order for it to be a legally binding contract