Life Insurance Exam (Texas) A+ Rating

Insurance (General concept) - Answer- - transfers the risk of loss from an individual to an insurer - based on the principle of indemnity - based on the principle of risk (risk pooling) insurable interest (General Concept) - Answer- - must exist at the time of the application - insuring one's own life, family member, or a business partner Solicitation and sales presentation - Answer- - illustration- presentation of nonguaranteed elements - buyer's guide is generic information about life polices which must be provided at the time of application - policy summary is a description of features and benefits of the policy being issued and must be provided when the policy is delivered. Underwriting (Field underwriting (by agent) - Answer- - application completed and signed - agent's report: agent's observation about the application that can assist in underwriting -premiums with application and conditional receipts underwriting ( company underwriting) - Answer- - multiple sources of information: applications, consumer reports, MIB (Medical Information Burea) - Risk Classification: 3 types of risk : standard, substandard, preferred Underwriting (Federal Regulation) - Answer- - Fair Credit Reporting Act: protect consumers against circulations of inaccurate or obsolete information - USE PATRIOT Act/ Anti-money Laundering and Suspicious Activity Reports Rules Premium Determination - Answer- - 3 key Factors for life insurance: mortality, interest, and expense - Mode: the more frequently premium is paid, the higher the premium