ucanpass 214 license ch. 1

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What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

Which of the following statements is NOT true concerning insurable interest as it applies to life insurance? *A married person has an insurable interest in their spouse *An individual has an insurable interest in their own life *A debtor has an insurable interest in the life of a lender *Business partners have an insurable interest in each other

A debtor has an insurable interest in the life of a lender (If the lender dies you/debtor don't owe them anything anymore!) PS Remember that these wrong answers ARE true statements about insurable interest!

Fraud

A deliberate deception intended to secure an unfair or unlawful gain

When must insurable interest exist in a life insurance policy?

At the time of the application

Lapse

Cancellation due to non-payment

Applicant

Client; soon to be insured

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

Conditional

Which of the following is NOT an example of a valid insurable interest? *Child in a parents' life *Debtor in the life of the collector *Business partners in each other's lives *Employers in key employee's life

Debtor in the life of the collector (You don't even want them calling you why would you want insurance for them?!) PS Remember that these wrong answers ARE good examples of insurable interest!

A producer agent must do all of the following when delivering a new policy to the insured EXCEPT *Explain the policy provisions, riders, and exclusions *Collect an premium due *Explain the rating procedures if the policy is rated differently than applied for *Disclose commissions earned from the sale of the policy

Disclose commissions earned from the sale of the policy (Don't rub in your pay check while they are paying you for expensive insurance! Ain't their business anyway!)

An applicant who receives a preferred risk classification qualifies for

Lower premiums than the person who receives a standard risk

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report

What is the definition of a unilateral contract?

One-sided: only one party makes an enforceable promise

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Pay the policy proceeds only if it would have issued the policy

What describes the specific information about a policy?

Policy summary

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a

Premium receipt

Which of the following types of risk will result in the highest premium? *Substandard risk *Standard risk *Preferred risk *All risks pay equal premiums

Substandard risk (Preferred risk insurance is for fancy healthy folks, they pay the lowest. Standard is in the middle)

Which of the following is NOT the consideration in a policy? *The application given to a prospective insured *Something of value exchanged between parties *The premium amount paid at the time of application *The promise to pay covered losses

The application given to a prospective insured (I don't know what this answer means but i do know that considerations ARE something of value that is exchanged between two parties and of course the client needs to know what they are paying and what they are receiving)

All of the following are requirements for life insurance illustrations EXCEPT *They must differentiate between guaranteed and projected amounts *They must be part of the contract *They may only be used as approved *They must identify nonguaranteed values

They must be part of the contract (for whatever reason you don't have to put illustrations in the contract.. just remember it)

Agent/Producer

a legal representative of an insurance company

Premium

an amount to be paid for an insurance policy.

Adverse Selection

insuring of risks that are more prone to losses than the average risk

Beneficiary

one who receives benefits from insurance policy

Death Benefit

the amount paid upon the death of the insured in a life insurance policy


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