MN LIFE ACCIDENT HEALTH PRODUCER EXAM EXAM

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QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Insurance

Answer:

The transfer of risk from one to many

Question 2: Automatic premium loans

Answer:

-allows insurance company to deduct unpaid premiums from policies cash value if they have not been received by the end of the grace period

Question 3: Spendthrift trust

Answer:

designed to protect insurance proceeds that haven't been paid to the beneficiary, prevents the commuting of money to creditors

Question 4: Universal Life Insurance

Answer:

• provides perm insurance protection + cash value
• provides *

additional flexibility * (may pay as little or as much w/ in limits) (may reduce the death benefit at any time, but needs insurability is required to increase the death)

• guarantees a minimum interest rate that will be paid on the cash value regardless of the market &

economic conditions death benefit comes from cash value + pure insurance -* flexible premium adjustable life *

Question 5: Specialized Life insurance

Answer:

• adjustable life insurance (may change between term and perm coverage (death benefit may be

increased, but with proof of insurability)

• joint life (first to die)
• survivorship (last to die/ second to die)

Question 6: apparent authority

Answer:

powers NOT given by the agency agreement, but that a reasonable person would presume the agent has

Question 7: War Exclusions

Answer:

• if insured dies because of war, the death benefit won't be paid
• the beneficiary will receive a refund of any prems paid + interest

Question 8: Moral Hazard

Answer:

dishonest tendencies (Fraud)

Question 9: Aviation exclusions`

Answer:

• if private pilot, death benefit won't be paid if died in an aviation accident

Question 10: Riders

Answer:

modifications to life & health policy: must be in writing & are attached to policies

Question 11: Guaranteed Insurability Rider

Answer:

• policyowner to purchase additional insurance at specified times w/o having to prove insurability
• premiums ar based off the attained age at time coverage is added
• expires typically at age 40

Question 12: Policy loan & withdrawal options

Answer:

• interest on policy loans may be deferred up to 6 months
• loan + accrued interest will be repaid upon the insureds death or policy surrender

Question 13: Pre- Trial ( criminal prosecution)

Answer:

30 days of the initial pre- trial hearing date & include a copy of initial complaint

Question 14: Twisting

Answer:

replacing insurance to the detriment of the insured

Question 15: collateral assignment

Answer:

is used to temporarily pledge a life insurance policy as security for a loan

Question 16: Primary & excess indemnity

Answer:

primary insurer pays first, then once exhausted, the excess insurer pays too

Question 17: waiver of premium rider/ w/ disability

Answer:

-if disabled, no premiums are due for the duration of the disability, but policy remains in force

• + continues to fund the cash value for the duration of the disability
• when policy owner & insured as the same person

Question 18: Certificate of Insurance

Answer:

• used after policy is issued
• contains summary of policy coverage & limits
• required in loan transactions and other matters

Question 19: Gramm Leach Bliley Act

Answer:

• advises companies to disclose their privacy policy and how a customers personal info may be used

Question 20: Discrimination

Answer:

making or permitting any unfair discrimination between individuals in the same class of insureds when setting rates or renewal of coverage, no discrimination of racial or gender ect.

Question 21: Insuring agreement

Answer:

-Named peril: policies only cover losses from perils that are specifically listed in policy

- open peril: policies cover all losses except those listed in the policy

Question 22: Regulation periods

Answer:

• complaint records- 4 years
• policy forms and applications- 3 years after effective date
• claim records- 3 years

Question 23: Whole Life Insurance

Answer:

• provides protection until age 100, provides cash value + insurance protection
• has higher premiums =

prems remain level for the life of insured + cash value provides savings + insurance protection

• money needed for death benefit comes from=

cash value & pure insurance (mortality charge) -endows @ age 100

• loan doesn't need to be repaid, but interest payments are deferred for up to 6 months