AD Banker Retention Questions Ch. 2

J is named in a policy as the individual who is entitled to receive the policy proceeds upon the death of T. Which of the following statements best applies to this scenario?

• J is named as the owner of T's policy

• T is the insured in the policy and J is the named beneficiary

• T is the owner and beneficiary of the policy

• J is the insured and beneficiary of the policy

A life insurance policy is being applied for on Z's life. In order for the contract to be valid, all of the following have an insurable interest and could be the owner of the policy, EXCEPT:

• Z

• Z's wife

• Z's neighbor

• Z's business partner

At the time of a life insurance policy delivery, a producer must provide which of the following?

• A copy of the insurance company's most recent annual report

• A copy of the fact finding data collected on the initial sales appointment

• A copy of the Buyer's Guide to Health Insurance, if interest was expressed in buying health insurance

• A copy of the illustration that matches the policy for which was approved

Who is required to sign a completed application?

• The producer

• The beneficiary

• Any insurance company officer

• The producer's manager

An applicant for life insurance realizes several days later that she may have answered a question about a health issue incorrectly. She should do which of the following?

• Nothing. Answers in the application must only be true to the best of her knowledge at the time she submits the application

• Wait to find out if she is approved for the insurance first, and then she can let the company know she may have made a mistake

• Contact either her agent or the insurance company and make sure they have the correct information

• Hope that nothing happens in the first year after the policy is issued, because after that it won't matter if the answer was or wasn't correct

Information from a third party collected by the insurance company in the application for insurance and during underwriting of the policy may be subject to the jurisdiction of the:

• Unfair Claims Practices Act

• Deceptive Trade Practices Act

• Fair Claims Reporting Act

• Fair Credit Reporting Act

Which of the following is NOT true about life insurance applications?

• The application more fully identifies the insured

• The application is confidential communication between the agent and the insurer

• The application may contain all the information underwriting needs to approve the insured

• Applications for life insurance are typically divided into two parts: General Information and Health History

Which of these modes would result in the insured paying the least annual outlay for life insurance?

• Annual

• Semi-annual payroll deduction

• Monthly automatic bank draft

• Quarterly

Which of the following statements correctly describes the difference between gross premium and net premium?

• Net premium is the cost per $1,000 of insurance; Gross premium excludes insurance company expenses

• Gross premium is what the insured pays to the insurance company each month; Net premium is what the agent's commission is based on

• Gross premium is the total amount paid for the policy. Net premium does not include the insurance company's cost of doing business

• Net premium is the total paid to the insurance company each month; Gross premium is described in terms of the number of dollars per $1,000 a person pays for their insurance

A personal use of life insurance does which of the following?

• Creates an insurance interest

• Creates an immediate estate

• Provides protection against living too long

• Compensates a business for the death of a key person