MA PRODUCER LIFE INSURANCE EXAM PREP

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MA PRODUCER LIFE INSURANCE EXAM PREP

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -50 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: The purpose for the Policy Summary, which must be given to every insurance

applicant before an application is signed, is to:

provide buyers with details of the specific insurance contract they are considering for purchase explain the step-by-step process involved in purchasing the recommended product explain the general features, benefits, and conditions of the type of insurance being considered disclose all the hidden costs associated with the policy being applied for

Answer:

provide buyers with details of the specific insurance contract they are considering for purchase Question 2: As a risk management technique, which of the following best illustrates risk transfer?Sheila refuses to drink alcoholic beverages if she expects to drive a car afterward.John refuses to buy life insurance because he figures he has enough money in his savings to pay for his burial when he dies.Robert purchases life insurance because he figures doing so is far less expensive than trying to save all the money his survivors would need upon his death.Carol eats a healthy diet and exercises regularly, hoping that doing so will keep her healthy.

Answer:

Robert purchases life insurance because he figures doing so is far less expensive than trying to save all the money his survivors would need upon his death.

Question 3: The insurer may cancel both types of policies if the policyowner does not pay the premiums.

Answer:

Sylvia's insurer guarantees a fixed death benefit for the policy she owns. Based on this, which one of the following benefits is also most likely guaranteed with this policy?policy dividends her ability to borrow an interest-free loan from the cash value payment of premiums on Sylvia's behalf in the event of emergencies the policy's cash value Question 4: The insured retains the right to designate the policy's beneficiary.

Answer:

All of the following statements about key person life insurance are correct, EXCEPT: Key person, or key employee, life insurance is an example of third-party ownership.Upon the insured employee's death, the employee's surviving family receives the policy's death benefit.Life insurance used as key person life is normally owned by the business rather than the insured.The business applies for, owns, and is the beneficiary of the policy covering the life of a key employee.Question 5: How often must the Commissioner examine the affairs and transactions of every authorized insurer?once every two years once every five years once every three years annually

Answer:

once every five years Question 6: The net single premium is the amount required to cover the policy's promised benefits, without accounting for the insurer's policy-related expenses.

Answer:

Alice wants to spread her life insurance premiums over the year, rather than pay a single annual premium. She asks her agent what that would mean in terms of the sum of premiums paid. Which of the following is the correct response?Whichever mode of premium she chooses, the sum of premiums over the course of the year is the same.The sum of premiums will be lower than if she paid a single annual premium.The sum of premiums may be higher or lower than the single annual premium, depending on whether the annual premium is paid at the start or end of the policy year.The sum of premiums will be higher than if she paid a single annual premium.

Question 7: Which of the following best describes insurable interest?

It refers to the role life insurance can play in protecting policyowners from investment fraud.It refers to the financial relationship between the policyowner and the insured person or property.It describes the basic relationship between the insurance company and the policyowner.It refers to the maximum amount of insurance that may be purchased on the insured person or property.

Answer:

Which of the following best describes insurable interest?It refers to the financial relationship between the policyowner and the insured person or property.It refers to the maximum amount of insurance that may be purchased on the insured person or property.It refers to the role life insurance can play in protecting policyowners from investment fraud.It describes the basic relationship between the insurance company and the policyowner.Question 8: Life insurance purchased on an important customer to make up for the financial losses that might occur when that customer dies.

Answer:

All of the following are automatically deemed to represent an insurable interest EXCEPT: ABC Corp. (the applicant) and its key executive Karen (the disabled applicant, age 28), and her father who cares for her.Sue (the applicant) and her husband Frank (the applicant) and his elderly neighbor

Question 9: participating whole life insurance

Answer:

All of the following statements about fixed whole life insurance cash values are correct EXCEPT: Cash values grow over the life of the policy and are calculated to equal the policy's face amount at the insured's age 120 (age 95 in the case of universal life insurance).Withdrawing or borrowing from the cash value will have no impact of the policy's death benefit.As long as premiums are paid, the insurance stays in force, the cash values grow, and the policy is guaranteed to pay its specified death benefit.The policyowner owns the cash value in the policy and can access it.Question 10: Which of the following pieces of legislation controls the manner in which businesses treat consumer information when it is used for insurance purposes?Fair Credit Reporting Act Consumer Privacy Act Fraud and False Statements section Interstate Commerce Clause

Answer:

Fair Credit Reporting Act

Question 11: An insurance producer tells a life insurance applicant that he has the authority to waive the medical exam that is normally required by the insurer with every application. The insurer may be required to accept the application without a medical exam due to the producer's: express authority imputed authority implied authority apparent authority

Answer:

apparent authority Question 12: A producer who disobeys a Commissioner's order to cease and desist from an illegal activity is not subject to which of the following?fine imprisonment license revocation license suspension

Answer:

imprisonment Question 13: Lucy is applying for an individual health insurance policy and discloses that she is diabetic, which is considered which of the following?a morale hazard a moral hazard a critical hazard a physical hazard

Answer:

a physical hazard

Question 14: Which of the following is NOT a prohibited marketing practice?

rebating premiums discrimination among risks fixing premium rates among insurers coercion

Answer:

discrimination among risks