Health and Life Insurance Study Guide with Questions and Correct Answers

Health and Life Insurance Study Guide with Questions and Correct Answers According to the laws of agency, an insurance agent appointed by an insurance company acts on behalf of: the appointing insurer Which characteristic about an insurance policy prevents the policyowner from transferring it to a third party without the insurer's consent? personal Which entity spreads the cost of losses among its members by having each member pay a pro-rata share of these losses? reciprocal insurer How do independent agents differ from captive agents? They can sell policies for several insurers. Which is not a means of regulating the insurance business? producer peer review Which of the following best illustrates risk transfer? Anita buys health insurance to protect herself in case of serious illness. Although most insurance policies are personal contracts between the insurer and the policyowner, which type is not a personal contract? Life Insurance Emily postpones buying a life insurance policy, believing that her family will use its savings to pay her final expenses if she dies prematurely. Which method is she using to deal with risk? retention Which describes the type of relationship based on trust that exists between the insurer and its appointed agent? fiduciary Which type of insurance company pays dividends to its stockholders? stock company Robin falls while snow skiing and breaks a leg. She decides to never again attempt this activity. What method is she using to manage this risk of falling? risk avoidance What happens if an insured stops paying premiums for an insurance policy? The insurance company is released from its promise to pay benefits and the contract expires. To boost her sales at the end of the year, Agent Trudy started offering potential clients a $250 cash gift card in exchange for purchasing a life insurance policy. Which ethical sales practice has Agent Trudy violated? rebating Which entity protects policyowners, insureds, and beneficiaries if an insurer cannot perform its contractual obligations because of impairment or insolvency? Florida Life and Health Guaranty Association When asked about the payment of dividends by a prospect, Agent Maloney states that policy dividends are always guaranteed, even though they are not. Which unfair trade practice has the agent committed? misrepresentation Conrad obtained a life insurance agent's license primarily to write insurance for his family members and friends. Which unfair trade practice has Conrad engaged in? controlled business ABC Life Insurance Co. sells term and whole life insurance policies through agents. If it sells a policy, it must give the customer the right to examine the policy for at least how long? 14 Days The Department cannot suspend or revoke an agent's license for which of the following reasons? failing to meet projected sales goals When holding insurance premiums and other funds, agents must act in a what role? a fiduciary capacity