life insurance

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

2,500

Risk classification

3 types of risks: standard, substandard, preferred

The term "illustration" in a life insurance policy refers to

A presentation of nonguaranteed elements of a policy

Agent's report

Agent's observations about the applicant that can assist in underwriting

An insurance offer is usually made when?

An applicant submits an application to the insurer

Conditional

Certain conditions must be met

Application

Completed and signed

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following Insurance principles has the insurer violated?

Consideration

Aleatory

Exchange of unequal amounts

Legal purpose

Not against public policy

Fixed annuities

Guaranteed, fixed payment amount; premiums in general account

Indexed annuities

Interest rate tied to an index; earn higher rate than fixed annuities, not as risky as variable annuities or mutual funds

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date prior to the policy issue

Competent parties

Of legal age, sound mental capacity, and not under the influence of drugs or alcohol

Agreement

Offer and acceptance

Adhesion

One party prepares the contract; the other party must accept it as is

Unilateral

Only one of the parties to the contract is legally bound to do anything

Variable annuities

Payment not guaranteed; premiums in separate account, and invested in stocks and bonds

Which of the following individuals must have insurable interest in the insured?

Policy owner

Which of the following will be included in a policy summary?

Premium amounts and surrender values

Consideration

Premiums and representations on the part of the insured; payment of claims on the part of the insurer

Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?

Return the application to the applicant for completion

Which of the following best details the underwriting process for life insurance?

Selection, Classification, and Rating of risk

Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?

Standard risk is representative of the majority of people

Mode

The more frequently premium is paid, the higher the premium

Whose responsibility is it to make certain that an application for the insurance is filled out completely and correctly?

The producer

Which is generally true regarding insureds who have been classified as preferred risk?

Their premiums are lower

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

Warranty