Podcast
Questions and Answers
What occurs when Alice passes away after receiving a conditional receipt for her life insurance policy?
What occurs when Alice passes away after receiving a conditional receipt for her life insurance policy?
What happens to Mark's life insurance policy after he is diagnosed with a permanent disability and holds a waiver of premium rider?
What happens to Mark's life insurance policy after he is diagnosed with a permanent disability and holds a waiver of premium rider?
What unethical practice is exemplified by an agent persuading Julia to replace her whole life policy without informing her of surrender charges?
What unethical practice is exemplified by an agent persuading Julia to replace her whole life policy without informing her of surrender charges?
In John's health insurance application, what is the underwriting action called when he is approved with a higher premium due to health risks?
In John's health insurance application, what is the underwriting action called when he is approved with a higher premium due to health risks?
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What regulation is violated when an agent shares a client’s medical history with an unauthorized third party during the application process?
What regulation is violated when an agent shares a client’s medical history with an unauthorized third party during the application process?
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What characteristic of insurance contracts is demonstrated when Peter pays $1,000 annually and receives $200,000 for a claim after three years?
What characteristic of insurance contracts is demonstrated when Peter pays $1,000 annually and receives $200,000 for a claim after three years?
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Which scenario indicates that Alice was given a conditional receipt for her life insurance application?
Which scenario indicates that Alice was given a conditional receipt for her life insurance application?
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What action must Mark take regarding premiums after his permanent disability, considering he has a waiver of premium rider?
What action must Mark take regarding premiums after his permanent disability, considering he has a waiver of premium rider?
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Which unfair practice involves an agent charging a client for an additional rider without their knowledge?
Which unfair practice involves an agent charging a client for an additional rider without their knowledge?
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What is the reason that Jane's application for life insurance on her elderly neighbor is likely to be denied?
What is the reason that Jane's application for life insurance on her elderly neighbor is likely to be denied?
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What unethical practice does the agent demonstrate by convincing Robert to switch policies without disclosing higher premiums?
What unethical practice does the agent demonstrate by convincing Robert to switch policies without disclosing higher premiums?
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Which type of insurance is most likely to assist Susan, who is unable to work due to a workplace injury?
Which type of insurance is most likely to assist Susan, who is unable to work due to a workplace injury?
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How does the Florida guaranty fund ensure Betty receives protection after her insurer goes bankrupt?
How does the Florida guaranty fund ensure Betty receives protection after her insurer goes bankrupt?
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What fiduciary responsibility has an agent violated by depositing premium payments into a personal account?
What fiduciary responsibility has an agent violated by depositing premium payments into a personal account?
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What action can David take if he decides to cancel his life insurance policy under the free-look provision?
What action can David take if he decides to cancel his life insurance policy under the free-look provision?
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What additional step must Linda take when replacing her health insurance policy?
What additional step must Linda take when replacing her health insurance policy?
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What aspect of the FCRA is violated if Alex is not informed of the source of the credit report after a denial?
What aspect of the FCRA is violated if Alex is not informed of the source of the credit report after a denial?
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How much will Tom receive per month if he has a disability income insurance policy that pays 60% of his $5,000 salary?
How much will Tom receive per month if he has a disability income insurance policy that pays 60% of his $5,000 salary?
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Study Notes
Conditional Receipt
- Alice applied for a $500,000 life insurance policy and received a conditional receipt.
- She died before the policy was issued, and underwriting confirmed she would have been approved.
- The insurer is obligated to pay the claim based on the conditional receipt.
Policy Riders
- Mark had a life insurance policy with a waiver of premium rider.
- He became permanently disabled and could no longer work.
- The premiums are waived, maintaining the policy's activity.
Replacement Policy
- Julia was persuaded to replace a whole life policy with a term life policy.
- The agent failed to disclose surrender charges and cash value loss.
- This is an example of twisting.
Underwriting
- John, with a history of smoking and heart disease, applied for health insurance.
- The insurer approved but with a higher premium.
- This is a substandard rating.
HIPAA Compliance
- An agent shared a client's medical history with an unauthorized third party.
- This violates the Health Insurance Portability and Accountability Act (HIPAA).
Aleatory Contract
- Peter's homeowner's insurance policy had no claims for three years.
- A hurricane devastated his home.
- The insurer paid $200,000. This illustrates an aleatory nature where the payout is disproportionate to the premium paid.
Sliding
- An agent sold a policy and added an accidental death rider without client knowledge or consent.
- This is considered sliding.
Insurable Interest
- Jane applied for a life insurance policy on her elderly neighbor.
- This applcation is likely to be denied due to a lack of insurable interest.
Twisting
- Robert was convinced by an agent to cancel a policy and switch to a new one.
- The agent failed to disclose higher premiums and fewer benefits.
- This is twisting.
Social Insurance
- Susan was injured at work and couldn't return to her job.
- She applied for benefits.
- Workers' Compensation is likely to assist.
Florida Guaranty Fund
- ABC Insurance Company went bankrupt, affecting Betty's active policy.
- The Florida Guaranty Fund ensures claims are paid up to certain limits.
Fiduciary Responsibility
- An agent deposited client premiums into a personal account before remitting them to the insurer.
- This violates premium accountability.
Free Look Period
- David purchased a life insurance policy and decided to cancel within a week.
- The free-look provision allows cancellation for a refund.
Replacement Documentation
- Linda replaced a health insurance policy.
- The agent completed a replacement notice and submitted it.
- The client's written acknowledgment is required.
Fair Credit Reporting Act
- An insurer denied Alex's application based on a credit report without disclosure.
- This violates the FCRA's disclosure requirement.
Medical Exam Requirements
- Michelle applied for life insurance.
- The insurer requested a medical exam and a conditional receipt.
- Coverage begins after the medical exam and underwriting approval.
Coercion
- An agent pressured a business owner to purchase a policy by threatening unrelated services.
- This illustrates coercion.
Adhesion Contract
- Rachel purchased an auto insurance policy.
- She couldn't negotiate the terms.
- This shows an adhesion contract.
Disability Insurance
- Tom's disability income insurance pays 60% of his $5,000 monthly salary.
- He is now unable to work.
- He will receive $3,000 a month.
Insurer Authorization
- XYZ Insurance, operating in Florida, lacked a certificate of authority.
- It's an unauthorized insurer.
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Description
This quiz explores key concepts related to life insurance, including conditional receipts, policy riders, underwriting processes, and compliance issues like HIPAA. Understanding these elements is crucial for anyone involved in the life insurance industry or studying insurance principles.
