Life Insurance Exam – Wisconsin Study
Guide Exam And Actual Answers.
Mortality - Answer The rate people will die
Morbidity - Answer The rate people will get sick
Peril - Answer The cause of loss and the event insured against.
Ex: premature death, dependency during old age, accident, and sickness
Adverse Selection - Answer The tendency for poorer than average risks to seek out insurance
Annuity - Answer Annuities protect against the risk of living longer than expected. Annuities
provide a guaranteed life income to protect against the risk of depleting retirement funds
Lloyds Associations - Answer Described as a market where individuals and groups gather to
exchange insurance, much like stock exchanges provide a place to buy, sell and trade stocks
Risk Retention Groups - Answer Llimited liability companies or member-owned corporations
that collectively assume and spread their members' liability risks through self-insurance. All
members of a risk retention group must be employed in similar types of businesses so that they
have similar liability exposures
Express Authority - Answer The explicit authority granted to the agent by the principal as
written in the agency contract
Implied Authority - Answer Not specifically expressed by the principal to the agent in the
agency contract, but is implicit in the agent's duties
Apparent Authority - Answer Is a situation in which the insurer gives the customer a
reasonable belief that an agent has the power and authority to bind the principal, even in cases
where the agent does not have such authority
, What cannot be in a consumer report unless for a life insurance policy of $150,000 or more: -
Answer -Bankruptcies dating back more than 10 years
-Civil suits and judgments dating back more than seven years or cases in which the statute of
limitations has expired, whichever period is longer
-Tax liens dating back more than seven years
-Adverse information dating back more than seven years
-Reports of a consumer's arrests, indictments or convictions
Guaranty Associations - Answer Provide a safety net for all member life, health and annuity
insurers in a particular state
Defamation - Answer Any false, maliciously critical, or derogatory communication - written or
oral - that injures another's reputation, fame, or character
Rebating - Answer If a buyer of an insurance policy is given anything of significant value as an
inducement to purchase or renew a policy- saying you'll give them something in addition like a
membership to a club
Twisting - Answer The unethical act of persuading a policyowner to drop a policy solely for the
purpose of selling another policy without regard to possible disadvantages to the policyowner-
Often, it involves encouraging an insured to lapse on their current policy and to take out
another.
Churning - Answer The practice of using misrepresentation to induce a policyholder to replace
a policy issued by the insurer the producer represents, rather than the policy of a competitor
Coercion - Answer Generally manipulates through the prospect of something desirable
Consideration - Answer Premium payment + application
Subrogation - Answer The right of the insurer to assume the rights of the insured and sue the
responsible third party for damages inflicted upon the insured.
Indemnity Insurance - Answer Insurance that compensates the beneficiaries of the policies for
their actual economic losses, up to the limiting amount of the insurance policy
Guide Exam And Actual Answers.
Mortality - Answer The rate people will die
Morbidity - Answer The rate people will get sick
Peril - Answer The cause of loss and the event insured against.
Ex: premature death, dependency during old age, accident, and sickness
Adverse Selection - Answer The tendency for poorer than average risks to seek out insurance
Annuity - Answer Annuities protect against the risk of living longer than expected. Annuities
provide a guaranteed life income to protect against the risk of depleting retirement funds
Lloyds Associations - Answer Described as a market where individuals and groups gather to
exchange insurance, much like stock exchanges provide a place to buy, sell and trade stocks
Risk Retention Groups - Answer Llimited liability companies or member-owned corporations
that collectively assume and spread their members' liability risks through self-insurance. All
members of a risk retention group must be employed in similar types of businesses so that they
have similar liability exposures
Express Authority - Answer The explicit authority granted to the agent by the principal as
written in the agency contract
Implied Authority - Answer Not specifically expressed by the principal to the agent in the
agency contract, but is implicit in the agent's duties
Apparent Authority - Answer Is a situation in which the insurer gives the customer a
reasonable belief that an agent has the power and authority to bind the principal, even in cases
where the agent does not have such authority
, What cannot be in a consumer report unless for a life insurance policy of $150,000 or more: -
Answer -Bankruptcies dating back more than 10 years
-Civil suits and judgments dating back more than seven years or cases in which the statute of
limitations has expired, whichever period is longer
-Tax liens dating back more than seven years
-Adverse information dating back more than seven years
-Reports of a consumer's arrests, indictments or convictions
Guaranty Associations - Answer Provide a safety net for all member life, health and annuity
insurers in a particular state
Defamation - Answer Any false, maliciously critical, or derogatory communication - written or
oral - that injures another's reputation, fame, or character
Rebating - Answer If a buyer of an insurance policy is given anything of significant value as an
inducement to purchase or renew a policy- saying you'll give them something in addition like a
membership to a club
Twisting - Answer The unethical act of persuading a policyowner to drop a policy solely for the
purpose of selling another policy without regard to possible disadvantages to the policyowner-
Often, it involves encouraging an insured to lapse on their current policy and to take out
another.
Churning - Answer The practice of using misrepresentation to induce a policyholder to replace
a policy issued by the insurer the producer represents, rather than the policy of a competitor
Coercion - Answer Generally manipulates through the prospect of something desirable
Consideration - Answer Premium payment + application
Subrogation - Answer The right of the insurer to assume the rights of the insured and sue the
responsible third party for damages inflicted upon the insured.
Indemnity Insurance - Answer Insurance that compensates the beneficiaries of the policies for
their actual economic losses, up to the limiting amount of the insurance policy
