Life Insurance Exam – Wisconsin Questions and Answers
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Course
Life Insurance – Wisconsin
Institution
Life Insurance – Wisconsin
Life Insurance Exam – Wisconsin
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 - A...
Life Insurance Exam – Wisconsin
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
Fair Credit Reporting Act (FCRA) - Answer- The Act requires consumer-reporting
agencies to implement policies and procedures to preserve the confidentiality,
accuracy, relevance, and appropriate utilization of consumer's private credit
information
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
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
Four elements that need to be in every contract: - Answer- Offer and acceptance,
consideration, competent parties, legal purpose
Four main parts of a life and health insurance contract - Answer- The policy face,
insuring clause, conditions, exclusions
Insurable interest must be present at what time - Answer- Time of the application
Aleatory contract - Answer- There is an unequal exchange of value. One party has
the potential to receive more benefit than the other
Personal contract - Answer- A contract between an individual and the insurer.
Personal contracts normally cannot be transferred to another individual without the
insurer's written consent- most insurance contracts are personal except life
Unilateral contract - Answer- Only the insurance company makes legally enforceable
promises to pay benefits in the event of a covered loss. The applicant does not make
any legally enforceable promises to the insurance company, not even the payment of
premiums
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