CT insurance life producer exam
questions and verified answers | grade
a+
Chapter I: Completing the Application, Underwriting, and Delivering the Policy. What is
insurance? CORRECT 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? CORRECT 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? CORRECT ANSWERS
Agreement - offer and acceptance, consideration, competent parties, and legal purpose
What does representation mean and how does it differ from a warranty? CORRECT
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? CORRECT 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? CORRECT ANSWERS Basic
information about life insurance policies and comparison of policy cost
What is underwriting? CORRECT ANSWERS Underwriting is the risk selection and
classification process.
What information is gathered in Parts 1 & 2 of the application? CORRECT 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? CORRECT 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? CORRECT ANSWERS Both
the agent and the proposed insured (usually the applicant) must sign the application.
, When does an insurance policy go in effect? CORRECT 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?
CORRECT 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? CORRECT 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? CORRECT 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? CORRECT 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)? CORRECT 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? CORRECT
ANSWERS Mortality, interest, and expense
When would an insured be required to sign a statement of good health? CORRECT
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?
CORRECT ANSWERS It provides temporary, pure death protection, with no cash
value.
What is annually renewable term insurance? CORRECT 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.
questions and verified answers | grade
a+
Chapter I: Completing the Application, Underwriting, and Delivering the Policy. What is
insurance? CORRECT 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? CORRECT 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? CORRECT ANSWERS
Agreement - offer and acceptance, consideration, competent parties, and legal purpose
What does representation mean and how does it differ from a warranty? CORRECT
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? CORRECT 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? CORRECT ANSWERS Basic
information about life insurance policies and comparison of policy cost
What is underwriting? CORRECT ANSWERS Underwriting is the risk selection and
classification process.
What information is gathered in Parts 1 & 2 of the application? CORRECT 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? CORRECT 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? CORRECT ANSWERS Both
the agent and the proposed insured (usually the applicant) must sign the application.
, When does an insurance policy go in effect? CORRECT 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?
CORRECT 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? CORRECT 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? CORRECT 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? CORRECT 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)? CORRECT 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? CORRECT
ANSWERS Mortality, interest, and expense
When would an insured be required to sign a statement of good health? CORRECT
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?
CORRECT ANSWERS It provides temporary, pure death protection, with no cash
value.
What is annually renewable term insurance? CORRECT 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.
