AD Banker Life Insurance Exam Questions with
accurate answers
______ are primarily social organizations that engage in charitable and
benevolent activities consisting of members of a given faith, lodge, or
order, and are usually organized as non-profits. Ans✓✓✓ Fraternal
Benefit Societies
A _______________ policy has a death benefit that will increase or
decrease over time based on the performance of the separate account,
provides a guaranteed minimum death benefit, offers a choice of
subaccounts in which cash value may be allocated, and a has fixed
premium. Ans✓✓✓ Variable Life
A contract that is drafted by an insurer and receives no input or
alteration from the insured, is considered a(n): Ans✓✓✓ Contract of
Adhesion
A federal regulation called the ______________ protects consumer
privacy. Ans✓✓✓ Fair Credit Reporting Act
A generic brochure was developed by the ________ to assist prospective
buyers of life insurance, which includes descriptions of all the basic
types of life insurance and comparisons of their relative costs. Ans✓✓✓
NAIC
,A life insurance policy is being applied for on Z's life. In order for the
contract to be valid, all of the following have an insurable interest and
could be the owner of the policy, except:
-Z's spouse
-Z's neighbor
-Z
-Z's business partner Ans✓✓✓ Z's neighbor
Insurable interest is defined as having a relationship which would result
in a financial or economic loss if the insured dies. A neighbor is not an
example of a party that meets this definition.
A participating life insurance policy has a long-term care rider. The
insured qualifies for the benefit. Where does the initial benefit money
come from? Ans✓✓✓ It is an advance of the face amount of the policy
A producer provided a conditional receipt to an applicant on May 5 at
the time of an application based on a standard risk. The insurer required
a routine medical exam, which was completed on May 15. The policy
was issued based on a substandard risk on May 20 and the producer
delivered the policy on May 22. The effective date of coverage is:
,-May 22
-May 15
-May 20
-May 5 Ans✓✓✓ May 22
Since the policy was not issued as applied for, coverage is not effective
until the producer delivers the policy on May 22 and explains the
changes in coverage or increased premium due to a substandard risk.
The applicant must accept the counteroffer.
A relationship that must exist at the time of application in which a
potential for financial hardship exists in the event of a loss Ans✓✓✓ A
relationship that must exist at the time of application in which a potential
for financial hardship exists in the event of a loss
A statement that a person makes and guarantees to be true is a:
Ans✓✓✓ Warranty
A viatical settlement is an agreement between a third party and a(n)
___________. Ans✓✓✓ Policyowner insuring the life of a terminally
ill insured with 2 years or less life expectancy
A(n)____________ is the person or entity that is covered by an
insurance policy. Ans✓✓✓ Insured
, Admitted/Authorized Insurer Ans✓✓✓ Insurer who is approved to
transact insurance via a Certificate of Authority from the state's
Department of Insurance.
Adverse selection Ans✓✓✓ The selection of unhealthy or high risk
applicants
Agent's Report Ans✓✓✓ Personal statement submitted to insurer about
applicant's financial condition, personal knowledge of them etc.
*remains confidential and not apart of the entire contract; between the
agent and insurer*
Agreement (Offer and Acceptance) Ans✓✓✓ Typically, a person (the
applicant or insured) makes an offer by submitting an application to the
insurance company for insurance along with the initial premium.
In this case, acceptance takes the form of the approved application
allowing the policy to be issued.
premium and issued policy form the agreement
Aleatory Contract Ans✓✓✓ Based on the uncertainty of a loss, there
will likely be an unequal exchange of consideration by either party
accurate answers
______ are primarily social organizations that engage in charitable and
benevolent activities consisting of members of a given faith, lodge, or
order, and are usually organized as non-profits. Ans✓✓✓ Fraternal
Benefit Societies
A _______________ policy has a death benefit that will increase or
decrease over time based on the performance of the separate account,
provides a guaranteed minimum death benefit, offers a choice of
subaccounts in which cash value may be allocated, and a has fixed
premium. Ans✓✓✓ Variable Life
A contract that is drafted by an insurer and receives no input or
alteration from the insured, is considered a(n): Ans✓✓✓ Contract of
Adhesion
A federal regulation called the ______________ protects consumer
privacy. Ans✓✓✓ Fair Credit Reporting Act
A generic brochure was developed by the ________ to assist prospective
buyers of life insurance, which includes descriptions of all the basic
types of life insurance and comparisons of their relative costs. Ans✓✓✓
NAIC
,A life insurance policy is being applied for on Z's life. In order for the
contract to be valid, all of the following have an insurable interest and
could be the owner of the policy, except:
-Z's spouse
-Z's neighbor
-Z
-Z's business partner Ans✓✓✓ Z's neighbor
Insurable interest is defined as having a relationship which would result
in a financial or economic loss if the insured dies. A neighbor is not an
example of a party that meets this definition.
A participating life insurance policy has a long-term care rider. The
insured qualifies for the benefit. Where does the initial benefit money
come from? Ans✓✓✓ It is an advance of the face amount of the policy
A producer provided a conditional receipt to an applicant on May 5 at
the time of an application based on a standard risk. The insurer required
a routine medical exam, which was completed on May 15. The policy
was issued based on a substandard risk on May 20 and the producer
delivered the policy on May 22. The effective date of coverage is:
,-May 22
-May 15
-May 20
-May 5 Ans✓✓✓ May 22
Since the policy was not issued as applied for, coverage is not effective
until the producer delivers the policy on May 22 and explains the
changes in coverage or increased premium due to a substandard risk.
The applicant must accept the counteroffer.
A relationship that must exist at the time of application in which a
potential for financial hardship exists in the event of a loss Ans✓✓✓ A
relationship that must exist at the time of application in which a potential
for financial hardship exists in the event of a loss
A statement that a person makes and guarantees to be true is a:
Ans✓✓✓ Warranty
A viatical settlement is an agreement between a third party and a(n)
___________. Ans✓✓✓ Policyowner insuring the life of a terminally
ill insured with 2 years or less life expectancy
A(n)____________ is the person or entity that is covered by an
insurance policy. Ans✓✓✓ Insured
, Admitted/Authorized Insurer Ans✓✓✓ Insurer who is approved to
transact insurance via a Certificate of Authority from the state's
Department of Insurance.
Adverse selection Ans✓✓✓ The selection of unhealthy or high risk
applicants
Agent's Report Ans✓✓✓ Personal statement submitted to insurer about
applicant's financial condition, personal knowledge of them etc.
*remains confidential and not apart of the entire contract; between the
agent and insurer*
Agreement (Offer and Acceptance) Ans✓✓✓ Typically, a person (the
applicant or insured) makes an offer by submitting an application to the
insurance company for insurance along with the initial premium.
In this case, acceptance takes the form of the approved application
allowing the policy to be issued.
premium and issued policy form the agreement
Aleatory Contract Ans✓✓✓ Based on the uncertainty of a loss, there
will likely be an unequal exchange of consideration by either party
