Insurance Exam #4

Which of the following is NOT allowed in credit life insurance?

Creditor requiring that a debtor buys insurance from a certain insurer

In which of the following situations is it legal to limit coverage based on marital status?

It is never legal to limit coverage based on marital status.

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income and period certain

What are the licensing requirements for someone who sells variable universal life insurance?

Life insurance and securities

What describes the specific information about a policy?

Policy Summary

According to the state nonforfeiture law for life insurance policies, insurers must offer at least one of the following nonforfeiture options EXCEPT

Reduction of premium

An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?

Reduction of premium

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

SEC Registration

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

Which of the following best describes fixed-period settlement option?

Both the principle and interest will be liquidated over a selected period of time

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated

The owner of a small restaurant submits a claim to his insurer after a loss due to fire. The insurer's investigation finds a police report that shows that a fire may have been of suspicious origin. The insurer can do which of the following?

Delay an acceptance or rejection decision

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

Interest only option

A license may NOT be denied, suspended, or revoked if the licensee

Submits an unsigned insurance policy application

All of the following are unfair claims settlement practices EXCEPT

Suggesting negotiations in settling the claim

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

The following are all causes for the Insurance Commissioner to suspend or impose conditions upon the continuance of an agent's license EXCEPT

The applicant has shown to be a poor personal credit risk

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data

A temporary license holder can receive a commission from a sale made to all of the following EXCEPT

The license holder's sister-in-law

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

After filing a claim, an insured tells the insurer that there is more than one insurance policy in force. That insurer sets aside the claim until it hears what the other company will pay. The insurer's action will be classified as

Unfair