Illinois Life Insurance Exam
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1. What is insur- The transfer of the risk of loss from the individual or business entity to an
ance? insurance company
2. What is included Solicitation, negotiating prior to execution of a contract, execution of a contract,
under the term in- and the transaction of any matters that arise as a result of the contract, as well
surance transac- as the actual process of insuring.
tion?
3. What is the An admitted or authorized insurer is qualified and received a Certificate of
difference Authority from the Department of Insurance to transact insurance in the state.
between an A nonadmitted or nonauthorized insurer is an insurance company that has not
authorized/ad- applied for, or has been denied a Certificate of Authority and may not transact
mitted and insurance.
unautho-
rized/nonadmit-
ted insurer?
4. What are the four AGREEMENT- offer/acceptance, consideration, competent parties, legal purpose
elements of an in-
surance contract?
5. What does rep- Representations are statements believed to be true to the best of one's knowl-
resentation mean edge. A warranty is an absolutely true statement upon which the validity of the
and how does it insurance policy depends.
differ from a war-
ranty?
6. What information Part 1 of the application includes the general questions about the applicant,
is gathered in including name, age, address, birth date, gender, income, marital status, and
Parts 1 & 2 of the occupation. Part 2 includes medical information about prospective insured.
application?
7.
, Illinois Life Insurance Exam
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What is the pur- The agent's (producer's) report is used by the agent to discuss his or her
pose of the personal observations concerning the proposed insured.
agent's report?
8. Who is required Both the agent and the proposed insured (usually the applicant) must sign the
to sign an applica- application
tion for life insur-
ance?
9. When does the in- The policy will go into effect when the first premium is paid and the policy has
surance policy go been delivered
in effect?
10. What is under- Underwriting is the risk selection and classification process
writing?
11. In a life insurance Insurable interest must exist between the policyowner and the insured at the
policy, when must time of application (or time of policy issue), but NOT at the time of loss
insurable interest
exist?
12. What is the pur- The act established procedures that consumer-reporting agencies must follow
pose of the Fair in order to ensure that records are confidential, accurate, relevant, and properly
Credit Reporting used. It also protects consumers against the circulation of inaccurate or obsolete
Act? information
13. What is the differ- Investigative consumer reports are similar to consumer reports in that they also
ence between a provide information on the consumer's character, reputation, and habits. The
consumer report primary difference is that the information is obtained through an investigation
and an investiga- and interviews with associates, friends and neighbors of the consumer
tive consumer re-
port?
, Illinois Life Insurance Exam
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14. How can an in- It can use MIB information to conduct further investigation into an applicant's
surance compa- current insurability
ny use the infor-
mation it obtains
from the MIB?
15. How does a sub- Substandard risk applicants are not acceptable at standard rates because of
standard risk pol- physical condition, personal or family history of disease, occupation, or danger-
icy differ from a ous habits. These policies could be issued with the premium rated-up (higher
standard risk? than the standard risk)
16. What is STOLI is an arrangement in which a person purchases an insurance policy on
stranger-originat- another without having insurable interest with the insured. STOLIs are purchased
ed life insurance with the intent to sell policies for life settlements
(STOLI)?
17. What information Basic information about life insurance policies and comparison of policy cost
does a Buyer's
Guide provide?
18. When would an If the initial premium is not paid with the application, the agent may need to
insured be re- obtain the statement of good health at policy delivery
quired to sign
a statement of
good health?
19. What are the char- It provides temporary, pure death protection, with no cash value
acteristics of term
life insurance?
20. What is annually Annually renewable term (ART) is the purest form of term life insurance in which
renewable tern in- the death benefit remains level; the policy may be guaranteed renewable each
surance?
Study online at https://quizlet.com/_a0931u
1. What is insur- The transfer of the risk of loss from the individual or business entity to an
ance? insurance company
2. What is included Solicitation, negotiating prior to execution of a contract, execution of a contract,
under the term in- and the transaction of any matters that arise as a result of the contract, as well
surance transac- as the actual process of insuring.
tion?
3. What is the An admitted or authorized insurer is qualified and received a Certificate of
difference Authority from the Department of Insurance to transact insurance in the state.
between an A nonadmitted or nonauthorized insurer is an insurance company that has not
authorized/ad- applied for, or has been denied a Certificate of Authority and may not transact
mitted and insurance.
unautho-
rized/nonadmit-
ted insurer?
4. What are the four AGREEMENT- offer/acceptance, consideration, competent parties, legal purpose
elements of an in-
surance contract?
5. What does rep- Representations are statements believed to be true to the best of one's knowl-
resentation mean edge. A warranty is an absolutely true statement upon which the validity of the
and how does it insurance policy depends.
differ from a war-
ranty?
6. What information Part 1 of the application includes the general questions about the applicant,
is gathered in including name, age, address, birth date, gender, income, marital status, and
Parts 1 & 2 of the occupation. Part 2 includes medical information about prospective insured.
application?
7.
, Illinois Life Insurance Exam
Study online at https://quizlet.com/_a0931u
What is the pur- The agent's (producer's) report is used by the agent to discuss his or her
pose of the personal observations concerning the proposed insured.
agent's report?
8. Who is required Both the agent and the proposed insured (usually the applicant) must sign the
to sign an applica- application
tion for life insur-
ance?
9. When does the in- The policy will go into effect when the first premium is paid and the policy has
surance policy go been delivered
in effect?
10. What is under- Underwriting is the risk selection and classification process
writing?
11. In a life insurance Insurable interest must exist between the policyowner and the insured at the
policy, when must time of application (or time of policy issue), but NOT at the time of loss
insurable interest
exist?
12. What is the pur- The act established procedures that consumer-reporting agencies must follow
pose of the Fair in order to ensure that records are confidential, accurate, relevant, and properly
Credit Reporting used. It also protects consumers against the circulation of inaccurate or obsolete
Act? information
13. What is the differ- Investigative consumer reports are similar to consumer reports in that they also
ence between a provide information on the consumer's character, reputation, and habits. The
consumer report primary difference is that the information is obtained through an investigation
and an investiga- and interviews with associates, friends and neighbors of the consumer
tive consumer re-
port?
, Illinois Life Insurance Exam
Study online at https://quizlet.com/_a0931u
14. How can an in- It can use MIB information to conduct further investigation into an applicant's
surance compa- current insurability
ny use the infor-
mation it obtains
from the MIB?
15. How does a sub- Substandard risk applicants are not acceptable at standard rates because of
standard risk pol- physical condition, personal or family history of disease, occupation, or danger-
icy differ from a ous habits. These policies could be issued with the premium rated-up (higher
standard risk? than the standard risk)
16. What is STOLI is an arrangement in which a person purchases an insurance policy on
stranger-originat- another without having insurable interest with the insured. STOLIs are purchased
ed life insurance with the intent to sell policies for life settlements
(STOLI)?
17. What information Basic information about life insurance policies and comparison of policy cost
does a Buyer's
Guide provide?
18. When would an If the initial premium is not paid with the application, the agent may need to
insured be re- obtain the statement of good health at policy delivery
quired to sign
a statement of
good health?
19. What are the char- It provides temporary, pure death protection, with no cash value
acteristics of term
life insurance?
20. What is annually Annually renewable term (ART) is the purest form of term life insurance in which
renewable tern in- the death benefit remains level; the policy may be guaranteed renewable each
surance?
