Questions for FIN 3320 Final
Abby, a licensed producer, is moving to Kansas. What is Abby's responsibility under the Louisiana Insurance Code? a.notify the Louisiana Department of Insurance of address change within 30 days b.notify the Louisiana Department of Insurance of address change upon license expiration c.notify the Kansas Insurance Department of address change d.no notification is required
A
All of the following are considered sources of underwriting information of the applicant EXCEPT? a.mortality tables b.application c.Medical Information Bureau (MIB) d.producer
A
All of the following statements are true regarding an actuary EXCEPT? a.They select the risk to be insured b.They are mathematicians c.They work for the insurer d.They establish rates
A
Ana wishes to purchase enough insurance to support her husband for the rest of his life if she should die prematurely, and then leave a sizeable inheritance for her children upon his death. Which method should be used to calculate the amount of insurance necessary? a.Capital conservation Your answer is correct. b.Capital liquidation c.Human life value d.Needs analysis
A
Ana wishes to purchase enough insurance to support her husband for the rest of his life if she should die prematurely, and then leave a sizeable inheritance for her children upon his death. Which method should be used to calculate the amount of insurance necessary? a.Capital conservation b.Capital liquidation c.Human life value d.Needs analysis
A
Bill dies without leaving a will. The distribution of her estate will be handled by a(n) a.Intestate distribution b.Inter vivos distribution c.Testamentary distribution d.Vivos testate distribution
A
Bob purchases a policy and tells the producer he wants immediate coverage, regardless of the underwriting outcome. To meet Bob's demand, the producer is most likely to a.Accept the premium and set up a temporary insurance agreement b.Accept the premium and issue an inspection receipt c.Accept the premium and issue a binding receipt d.Accept the premium and issue a conditional receipt
A
Group life insurance: a.written on a one year level term policy basis b.has cash value c.automatically renews every month d.cannot be converted to an individual policy
A
If Anna is licensed to sell both Life/Health and Personal/Commercial insurance, how many hours of continuing education are required every 2 years? a.24 b.36 c.64 d.8
A
Julie's husband died 3 years ago, leaving her with two children in grade school. Julie is most likely in which income period? a.family dependency period b.preretirement period c.retirement period d.grieving period
A
Larry was declined insurance coverage based on negative information received in a consumer report. Under the Fair Credit Reporting Act, the producer should do all of the following EXCEPT? a.advise Larry of the negative information found in the consumer report b.advise Larry of the right to receive a copy of the consumer report c.advise Larry the insurer must provide the applicant with the name and address of the consumer-reporting agency d.advise Larry the consumer reporting agency must provide the information
A
Lee applies for a policy, pays the initial premium and receives a conditional receipt on March 14. On March 15, he passes the medical exam with flying colors. On March 16, an undiagnosed brain aneurysm bursts, killing Lee instantly. On March 17, the insurer receives the results of the medical exam, which includes no information about the aneurysm. On March 19, the insurer receives the notice of claim. The insurer will a.pay the claim b.return the premium c.pay the claim plus the amount of the first premium d.pay the claim minus a processing fee
A
Notice of a Hearing involving a producer's misconduct must be made: a.5 days in advance of hearing b.20 days in advance of hearing c.30 days in advance of hearing d.45 days in advance of hearing
A
Several producers agree to control the market share of Cajun Mutual Insurance Company. What type of unfair trade practice is this? a.boycott b.twisting c.unfair discrimination d.this is legal and not a violation of the Insurance Code
A
The application of the law of large numbers enables insurers to a.estimate the future losses of a class or group of people b.predict the future losses of specific individuals c.charge higher premiums for insurance d.calculate mortality charges
A
The premium is the insured's: a.Consideration to enter into a contract b.Formal offer to enter into a contract c.Acceptance of a contract d.Agreement to purchase a contract
A
When an employee terminates membership in an insured group plan, the group life conversion privilege provides which of the following: a.convert to individual policy without evidence of insurability b.convert to individual policy with evidence of insurability c.convert to individual policy if the employee is over the age of 50 d.conversion is not an option on group insurance
A
When the producer delivers the policy, all of the following should be explained EXCEPT? a.actuarial calculations b.riders c.exclusions d.rating classification
A
Which element is not necessary for the formation of a valid contract? a.Written document b.Legal purpose c.Competent parties d.Consideration
A
Which of the following is correct about the group life conversion privilege? a.must be made available for 31 days b.if the eligible dependent dies within 31 days of the conversion, the death benefit is denied c.a dependent 23 years of age and a full-time student is not eligible to be covered under the group plan d.the individual policy written would normally be less expensive
A
Which of the following statements is false? a.Replacement is illegal. b.Replacement is the purchase of one life insurance policy to replace another. c.Replacement laws are designed to protect the interests of life insurance purchasers. d.Replacement laws concern themselves with the use of false and misleading statements used in the sale of insurance.
A
Which of the following would NOT be funded with a life insurance policy? a.A buy-sell agreement b.A stock purchase plan c.A cross-purchase agreement d.A split-dollar plan
A
A Louisiana resident life producer would be required to complete continuing education in the amount of: a.24 CE hours to be completed before December 31 each year b.24 CE hours to be completed before biennial renewal date c.12 CE hours to be completed before December 31 each year d.36 clock hours to be completed every year before producer's license renewal
B
Alice decides to buy a policy. She pays the first premium and the producer issues a receipt and tells her that she is covered immediately, until she is notified that the policy is either issued or declined. What kind of receipt has Alice received? a.Conditional receipt b.Binding receipt c.Inspection receipt d.Premium receipt
B
All of the following are possible premium modes EXCEPT? a.twelve months b.nine months c.one month d.three months
B
An insurance producer analyzed Glenda's life insurance needs, taking into account Glenda's net annual salary, her expenses, her current age, and depreciation of the dollar over time. This producer was using a.The analytical approach to needs analysis b.The human life value approach to needs analysis c.The needs approach to needs analysis d.The planning approach to needs analysis
B
Carol applies for a life insurance policy and pays the initial premium. Carol has a.Made a counter offer to the insurer b.Made an offer to the insurer c.Accepted a counter offer from the insurer d.Accepted an offer from the insurer
B
Certain elements are necessary for a particular risk to be insurable. Which of the following would make a risk uninsurable? a.the risk of loss can be measured in dollars b.the risk is of a catastrophic (war/nuclear) nature c.the risk can be predicted because of the large number of people exposed d.the risk exposure is of an accidental nature
B
If an individual decides to accept the risk associated with a loss and not purchase insurance, they are using what risk managing method? a.Avoiding b.Retaining c.Transferring d.Sharing
B
Shane is a master carpenter in business for himself. His business is probably operated as a.A corporation b.A sole proprietorship c.A partnership d.A limited liability company
B
The Louisiana Life & Health Insurance Guaranty Association: a.is an association of only domestic insurers that promotes the insurance industry in the State of Louisiana b.requires all authorized insurers in the State be members of the Association c.insures up to $300,000 total net cash surrender values on any one life d.insures up to $100,000 total life insurance death benefits
B
The minimum number of members required to form a group life insurance policy is: a.2 b.5 c.10 d.25
B
The practice of the Louisiana Life & Health Guaranty Association charging members in order to pay contractual obligations for an insolvent insurer is called? a.premium adjustment b.assessment c.audit d.your fair share
B
The term used to describe the individual who is covered by the insurance is a.insurer b.insured c.policyowner d.risk
B
The type of estate transfer made while the estate owner is still alive is called a(n) a.Inter venous transfer b.Inter vivos transfer c.Testamentary transfer d.Trustee transfer
B
What is considered the BEST method for determining the amount and kind of insurance a prospect should buy? a.Human Life Value Approach b.Needs Approach c.Capital Conservation d.Capital Liquidation
B
When representing an insurer, a producer acting as an agent has a responsibility to act with the degree of care that a.A lawyer would apply under similar circumstances b.A reasonable person would apply under similar circumstances c.Any person would apply under similar circumstances d.A licensed insurance producer would apply under similar circumstances
B
Which of the following is a risk? a.A car may need to have new brakes installed after several years of regular driving. b.An individual may need medical attention after slipping on the ice and falling. c.Both are examples of risk. d.Neither is an example of risk.
B
Which of the following penalties can the Louisiana Department of Insurance impose? a.$5,000 criminal fine b.license revocation c.5 years in jail d.return of commission from life insurance sale considered to be unfair trade practice
B
Which of the following would be considered competent to enter into a contract? a.individual having a difficult time walking after leaving a tavern b.person confined to a hospital due to a heart attack c.a Girl Scout, age 11, selling Girl Scout cookies d.person committed to a mental hospital
B
Which type of risk management techniques are used when the insured buys insurance? a.Peril b.Transfer c.Avoid d.Reduce
B
A group life underwriter would be concerned about all of the following EXCEPT? a.group participation b.composition of the group c.individual health problems d.group eligibility
C
A policy may be issued all of the following ways EXCEPT a.As applied for b.As a modified or amended policy c.As an exchange policy, covering someone other than the original applicant d.With a waiver excluding death by a certain cause
C
All of the following are personal uses of life insurance EXCEPT? a.Cash for funeral costs and related expenses b.College education for surviving children c.To protect a corporation from the financial loss sustained when a key employee dies Your answer is correct. d.Peace of mind and financial security for a family
C
All of the following are personal uses of life insurance EXCEPT? a.Cash for funeral costs and related expenses b.College education for surviving children c.To protect a corporation from the financial loss sustained when a key employee dies d.Peace of mind and financial security for a family
C
All of the following are true regarding group life insurance EXCEPT? a.group life insurance is written as one year level term insurance b.the employee determines the beneficiary c.group life insurance can be converted only with evidence of insurability d.the employer cannot be the beneficiary
C
All of the following information would be included in a Notice of a Hearing by the Louisiana Department of Insurance EXCEPT? a.provisions in the Insurance Code that have been violated b.state the purpose of the Hearing c.state any precedence established by previous orders d.provide the date and time of the Hearing
C
An insurance producer analyzed Ken's life insurance needs, taking into account the amount of money Ken anticipated needing for his funeral and the amount of income that would be required to maintain his family's standard of living in the event of his death, including projected college costs and the costs of supporting his spouse. This producer was using a.The analytical approach to needs analysis b.The human life value approach to needs analysis c.The needs approach to needs analysis d.The planning approach to needs analysis
C
If an applicant for life insurance lies on the application regarding a material fact, it is called? a.representation b.fraud c.misrepresentation d.concealment
C
If the Louisiana Department of Insurance suspects a producer is using "Unfair Trade Practices," the first action taken is to: a.issue a cease and desist order b.immediately revoke the producer's license c.send notice of a hearing d.non-renew the producer's license
C
In life insurance the "insurable interest" must exist: a.at the time of application and at the time of loss b.at the time of application or at the time of loss c.at the time of application only d.at the time of loss
C
In the event of a licensed producer's death or disability, a temporary license may be issued to another individual for a period of: a.30 days b.90 days c.180 days d.365 days
C
Living benefits of life insurance include all of the following EXCEPT: a.Loan values b.Cash withdrawals c.death benefit d.Dividends
C
Richard applies for a policy, pays the initial premium, and receives a BINDING receipt on Friday, September 1. On Monday, September 4, the underwriting department decides not to issue the policy and places the file in a pile for notification letters to be sent out at the end of the week. On Wednesday, September 6, Richard is killed in an auto accident. On Thursday, September 7, the insurer receives the notice of claim. The insurer will a.Return the premium and not pay the claim, because the underwriting decision had been made. b.Return the premium and not pay the claim, because death occurred before the policy was issued. c.Pay the claim, because a binding receipt assures coverage until the potential insured is notified of a rejection. d.Pay the claim, because ANY receipt assures coverage until the potential insured is notified of a rejection.
C
Speculative risk involves all of the following EXCEPT? a.uncertainty of loss b.gambling c.insurance d.chance of gain
C
The Louisiana Life & Health Guaranty Association would protect all of the following policies EXCEPT? a.fixed annuities b.whole life c.variable annuities d.term life
C
The insurer looks at Carol's application and decides to offer Carol a modified policy, including an exclusion Carol did not request. The insurer has a.Made an offer to Carol b.Accepted a counter offer from Carol c.Made a counter offer to Carol d.Accepted an offer from Carol
C
The type of estate transfer made after the estate owner dies is called a(n) a.Inter venous transfer b.Inter vivos transfer c.Testamentary transfer d.Trustee transfer
C
To be certain the insurer has the money available to pay claims as they arise, it is required to maintain a.Reinsurance b.Expense ratios c.Reserves d.A risk-based capital ratio
C
Upon completion of an examination of an insurer, the Louisiana Department of Insurance must send a written report no later than: a.10 days after examination completion b.20 days after examination completion c.30 days after examination completion d.45 days after examination completion
C
Which of the following is NOT likely to be contained in an MIB report? a.Mr. Jones reported a heart condition on an insurance application two years ago b.Mr. Green's information has been requested 14 times in the previous two years c.Mr. Smith was turned down for insurance by two companies in the past year d.Mr. Brown reported a hobby as a flight instructor a year ago
C
Which of the following should NOT be taken into account when a producer makes recommendations as to the amount and type of insurance needed by an individual? a.how much premium can the individual afford to pay? b.should the premium be level, increasing, or decreasing? c.how much commission does the product offer? d.is the individual insurable?
C
Which of the following statements describe the best use of a producer's time when personally delivering the policy? a.Mr.Jones delivers a policy and makes a special point of finding out how the insured's son performed in the gymnastics competition. b.Ms. King delivers a policy and reiterates the same sales pitch she used to make the initial sale. c.Mrs. Ross delivers a policy and restates the advantages of the policy and how it can be amended to meet future insurance needs. d.Mr. Bourne delivers a policy early in the morning, before the client is home, so that he can simply leave the policy in the mailbox.
C
Which of the following statements is true about submitting the application, premium, and other forms to the insurance company? a.The application and any questionnaires must be signed by the beneficiary b.The producer must keep accurate records of all transactions involving the applicant's money. c.Because coverage is effective immediately, it is not necessary to send the forms to the home office underwriter more often than weekly. d.A life insurance policy may be issued only as applied for or rejected.
C
All have insurable interest in Joe's life EXCEPT? a.Joe's employer b.Joe c.Joe's spouse d.Joe's neighbor
D
All of the following are hazards in life insurance EXCEPT? a.not exercising b.smoking c.overeating d.premature death
D
If William is a producer and lives in Texas but travels to Louisiana to solicit a policy of insurance, William must have a: a.foreign license for Louisiana b.resident license for Louisiana c.resident license for Texas only d.resident license for Texas and a non resident license for Louisiana
D
If an applicant is rated or declined an insurance policy, the reasons for this decision will be explained to the applicant by a.The insurer b.The underwriter c.The Insurance Commissioner d.The producer
D
John fills out an application for a life insurance policy to insure his own life, and for which he plans to pay the premiums. John is playing all the following roles EXCEPT? a.Applicant b.Policyowner c.Insured d.Beneficiary
D
Ken has terminal cancer and wants to access the death benefit of his life insurance policy to pay medical expenses. How might he be able to do this? a.He won't be able to access the policy funds until after his death b.He may access the funds through accelerated benefits c.He may access the funds through a viatical settlement d.He may access the funds either through a viatical settlement or by using the accelerated benefits provision
D
What is the group member called? a.insurer b.sponsor c.employer d.insured
D
When one party writes the contract and the other party has no input, it is known as a(n): a.offer and acceptance b.unilateral contract c.conditional contract d.contract of adhesion
D
Which of the following are costs associated with death? a.Doctor or hospital bills from a final illness or accident b.Paying off debts such as credit cards or other loans c.Taxes d.All of the above
D
Which of the following are duties of a producer upon the death of an insured? a.Notify the company b.Contact the beneficiary c.Send the proof of death documents to the company d.All of the above
D
Which of the following is NOT considered an illegal act for a life producer? a.sharing commission with the applicant for an insurance policy b.offering a gift of airline tickets as an inducement to purchase insurance c.sharing life commission with a licensed personal lines property & casualty producer d.premium savings offered by the insurer because the premium is bank drafted
D
Which of the following regulates the Medical Information Bureau (MIB)? a.Policy Replacement Law b.National Association of Insurance Commissioners (NAIC) c.Louisiana Department of Insurance (LDI) d.Fair Credit Reporting Act
D
Which of the following would NOT be funded with a life insurance policy? a.A buy-sell agreement b.A stock purchase plan c.A cross-purchase agreement d.A split-dollar plan
D
Who receives the certificate of insurance in group insurance? a.sponsor b.member and family member c.employer d.member
D