Review Practice Questions

The Federal Fair Credit Act... a. Regulates telemarketing b. prevents money laundering c. regulates consumer reports d protects customer privacy

C

Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process? a. policy summary b. illustrations c. buyers guide d. insurance insurance

C.

The full premium was submitted with the application for life insurance and the policy was issued two weeks later as requested. When does the policy coverage become effective? a. As of the first of the month after the policy issue b. As of the policy issue date c. As of the application date d. As of the policy delivery date

C.

Another name for a substandard risk classification is? a. elevated b. consumer report c. inspection report d. Agent's report

B

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 many contain all the following information EXCEPT the applicants.. a. Habits b. Prior insurance c. Ancestry d. Credit History

D.

A producer Agent must do all of the following when delivering a new policy to the insured EXCEPT? a. Explain the policy provisions, and exclusions b. collect any premium due c. Explain the rating procedures if the policy is rated differently than applied for. d. Disclose commissions earned from the sale of the policy

D.

If a policy includes a free-look period of at least 10-days, the buyers Guide may be delivered to the applicant. a. Upon issuance of the policy b. within 30 days after the first premium payment was collected c. Prior to filling out an application for insurance d. With the policy

D.

Which of the following best describes the aleatory nature of an insurance contract? a. Policies are submitted to the insurer on a take-it-or-leave- it basis. b. exchange of unequal values c. Only one of the parties being legally bound by the contract d. Ambiguities are interpreted in favor of the insured

B

Which of the following will be included in a policy summary? a. Primary and Secondary beneficiary designations b. Premium amounts and surrender values c. Copies of all illustrations and application d. Comparisons with similar policies

B

What is the purpose of a conditional receipt? a. it serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company. b. it is given by the agent only to applicants who fully prepay all scheduled premiums in advance of policy issue. c. it is intended to provide coverage on a date earlier than the date of the issuance of the policy. d. it guarantees the applicant that a policy will be issued in the amount applied for in the application

C

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will? a. Pay the policy proceeds up to an established limit b. Not pay the policy proceeds under any circumstances. c. Automatically pay the policy proceeds d. Pay the policy proceeds only if it would have issued the policy.

D

All of the following are requirements for life insurance illustrations EXCEPT a. They may only be used as approved b. They must identify non-guaranteed values. c. They must differentiate between guranteed and projected amounts d. They must be part of the contract

D

An insured stated on her application for Life Insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied? a. Waiver b. Utmost c. Estoppel D. Material Representation

D

If an agent fails to obtain an applicant's signature on the application, the agent must... a. sign the application, stating it was by the agent. b. Send the application to the insurer with a note explaining the absence of a signature. c. Return the application to the applicant for a signature. d. Sign the application to the applicant for a signature.

D.

In which of the following examples would a contract between an insurer and prospective insured be legal? a. the applicant is a 12-year old student b. the applicant is under the influence of medication at the time of application. c. the applicant has a prior felony conviction d. The applicant is intoxicated at the time of application

C

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe? a. Good Health b. Adhesion c. Conditional d. Aleatory

D.

If a change needs to be made to the application for insurance, the agent may do all the following EXCEPT... a. erase the incorrect answer and record the correct answer. b. Draw a line through the first answer, record the correct answer, and have the applicant initial the change c. Note on the application the reason for the change d. Destroy the application and record/complete a new one

A

An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information? a. interviews b. state records c. medical records d. application

D

Which of the following would provide an underwriter with the information concerning an applicant's health history? a. a medical examination b. the agents report c. the inspection report d. The medical information Bureau

D

Which is generally the regarding insureds who have been classified as preferred risk? a. They keep a higher percentage of any interest earned on their policies b. Their premiums are lower. c. They can borrow higher amounts off of their policies d. They can decide when to pay their monthly premiums.

B

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? a. Consumer Privacy Act b. The Fair Credit Reporting Act c. Unfair Trade Practices Law d. The Guaranty Association

B