CT INSURANCE LIFE PRODUCER EXAM QUESTIONS
Chapter I: Completing the Application, Underwriting, and Delivering the Policy. What is
insurance? - Answers - Insurance transfers the risk of loss from an individual or
business entity to an insurance company, which in turn spreads the costs of unexpected
losses to many individuals.
In life insurance, when must insurable interest exist? - Answers - Insurable interest
must exist between the policyowner and the insured at the time of application, but not at
the time of loss.
What are the four elements of an insurance contract? - Answers - Agreement - offer
and acceptance, consideration, competent parties, and legal purpose
What does representation mean and how does it differ from a warranty? - Answers -
Representations are statements believed to be true to the best of one's knowledge. A
warranty is an absolutely true statement upon which the validity of the insurance policy
depends.
What does insurance solicitation mean? - Answers - In simplest terms, solicitation of
insurance means an attempt to persuade a person to buy an insurance policy, and it
can be done orally or in writing.
What information does a Buyer's Guide provide? - Answers - Basic information about
life insurance policies and comparison of policy cost
What is underwriting? - Answers - Underwriting is the risk selection and classification
process.
What information is gathered in Parts 1 & 2 of the application? - Answers - Part 1 of
the application includes the general questions about the applicant, including name, age,
address, birth date, gender, income, marital status, and occupation. Part 2 includes
medical information about prospective insured.
What is the purpose of the agent's report? - Answers - The agent's (producer's) report
is used by the agent to discuss his or her personal observations concerning the
proposed insured.
Who is required to sign an application for life insurance? - Answers - Both the agent
and the proposed insured (usually the applicant) must sign the application.
When does an insurance policy go in effect? - Answers - The policy will go into effect
when the first premium is paid and the policy has been delivered.
, How can an insurance company use the information it obtains from the MIB? - Answers
- It can use MIB information to conduct further investigation into an applicant's current
insurability.
What is the purpose of the Fair Credit Reporting Act? - Answers - The act established
procedures that consumer-reporting agencies must follow in order to ensure that
records are confidential, accurate, relevant, and properly used. It also protects
consumers against the circulation of inaccurate or obsolete information.
What is the difference between a consumer report and an investigative consumer
report? - Answers - Investigative consumer reports are similar to consumer reports in
that they also provide information on the consumer's character, reputation, and habits.
The primary difference is that the information is obtained through an investigation and
interviews with associates, friends and neighbors of the consumer.
How does a substandard risk policy differ from a standard risk? - Answers -
Substandard risk applicants are not acceptable at standard rates because of physical
condition, personal or family history of disease, occupation, or dangerous habits. These
policies could be issued with the premium rated-up (higher than the standard risk).
What is stranger-originated life insurance (STOLI)? - Answers - STOLI is an
arrangement in which a person purchases an insurance policy on another without
having insurable interest with the insured. STOLIs are purchased with the intent sell
policies for life settlements.
What are the 3 factors that determine the premium for a particular policy? - Answers -
Mortality, interest, and expense
When would an insured be required to sign a statement of good health? - Answers - If
the initial premium is not paid with the application, the agent may need to obtain the
statement of good health at policy delivery.
Chapter II: Types of Life Policies What are the characteristics of term life insurance? -
Answers - It provides temporary, pure death protection, with no cash value.
What is annually renewable term insurance? - Answers - Annually renewable term
(ART) is the purest form of term insurance in which the death benefit remains level; the
policy may be guaranteed renewable each year without proof of insurability, but the
premium increases annually according to the attained age.
What are the characteristics of whole life insurance? - Answers - Permanent protection
to the insured's age 100, with living benefits such as cash value, policy loans, and
nonforfeiture options.
How does continuous premium straight life differ from 20-year limited pay life? -
Answers - The premiums for straight life will be spread over the insured's lifetime, thus
Chapter I: Completing the Application, Underwriting, and Delivering the Policy. What is
insurance? - Answers - Insurance transfers the risk of loss from an individual or
business entity to an insurance company, which in turn spreads the costs of unexpected
losses to many individuals.
In life insurance, when must insurable interest exist? - Answers - Insurable interest
must exist between the policyowner and the insured at the time of application, but not at
the time of loss.
What are the four elements of an insurance contract? - Answers - Agreement - offer
and acceptance, consideration, competent parties, and legal purpose
What does representation mean and how does it differ from a warranty? - Answers -
Representations are statements believed to be true to the best of one's knowledge. A
warranty is an absolutely true statement upon which the validity of the insurance policy
depends.
What does insurance solicitation mean? - Answers - In simplest terms, solicitation of
insurance means an attempt to persuade a person to buy an insurance policy, and it
can be done orally or in writing.
What information does a Buyer's Guide provide? - Answers - Basic information about
life insurance policies and comparison of policy cost
What is underwriting? - Answers - Underwriting is the risk selection and classification
process.
What information is gathered in Parts 1 & 2 of the application? - Answers - Part 1 of
the application includes the general questions about the applicant, including name, age,
address, birth date, gender, income, marital status, and occupation. Part 2 includes
medical information about prospective insured.
What is the purpose of the agent's report? - Answers - The agent's (producer's) report
is used by the agent to discuss his or her personal observations concerning the
proposed insured.
Who is required to sign an application for life insurance? - Answers - Both the agent
and the proposed insured (usually the applicant) must sign the application.
When does an insurance policy go in effect? - Answers - The policy will go into effect
when the first premium is paid and the policy has been delivered.
, How can an insurance company use the information it obtains from the MIB? - Answers
- It can use MIB information to conduct further investigation into an applicant's current
insurability.
What is the purpose of the Fair Credit Reporting Act? - Answers - The act established
procedures that consumer-reporting agencies must follow in order to ensure that
records are confidential, accurate, relevant, and properly used. It also protects
consumers against the circulation of inaccurate or obsolete information.
What is the difference between a consumer report and an investigative consumer
report? - Answers - Investigative consumer reports are similar to consumer reports in
that they also provide information on the consumer's character, reputation, and habits.
The primary difference is that the information is obtained through an investigation and
interviews with associates, friends and neighbors of the consumer.
How does a substandard risk policy differ from a standard risk? - Answers -
Substandard risk applicants are not acceptable at standard rates because of physical
condition, personal or family history of disease, occupation, or dangerous habits. These
policies could be issued with the premium rated-up (higher than the standard risk).
What is stranger-originated life insurance (STOLI)? - Answers - STOLI is an
arrangement in which a person purchases an insurance policy on another without
having insurable interest with the insured. STOLIs are purchased with the intent sell
policies for life settlements.
What are the 3 factors that determine the premium for a particular policy? - Answers -
Mortality, interest, and expense
When would an insured be required to sign a statement of good health? - Answers - If
the initial premium is not paid with the application, the agent may need to obtain the
statement of good health at policy delivery.
Chapter II: Types of Life Policies What are the characteristics of term life insurance? -
Answers - It provides temporary, pure death protection, with no cash value.
What is annually renewable term insurance? - Answers - Annually renewable term
(ART) is the purest form of term insurance in which the death benefit remains level; the
policy may be guaranteed renewable each year without proof of insurability, but the
premium increases annually according to the attained age.
What are the characteristics of whole life insurance? - Answers - Permanent protection
to the insured's age 100, with living benefits such as cash value, policy loans, and
nonforfeiture options.
How does continuous premium straight life differ from 20-year limited pay life? -
Answers - The premiums for straight life will be spread over the insured's lifetime, thus
