Oklahoma Life Insurance Test

Front 1

What is insurance

Back 1

The transfer of financial resposibility associated with a potential loss(risk)

Front 2

What is an angency contract?

Back 2

a contract that is held between an insurer and an agent/producer, containing the expressed authority given to the agent /producer, and the duties and responsibilities the principal. An agent who is in violation og the agency contract may be held personally liable to the insurer.

Front 3

What is agent/producer?

Back 3

a person who acts for another person or entity known as the principal with regaed to contractual arrangements with 3rd parties; a legal representative of an insurance agency.

Front 4

What is an applicant or proposed insurere?

Back 4

a person who requests or seeks insurance from an insurere.

Front 5

What is a beneficiary?

Back 5

the person who recieves the benifits from the policy of insurance

Front 6

What is a death benefit?

Back 6

face amount/face) value/coverage) the amount paid when a clain is issued against a policy of insurance.

Front 7

What is an insurance policy?

Back 7

a contract between a policyowner(and/or insured) and an insurance company which agress to pay the insured or the benificiary for loss caused by specific events.

Front 8

Who is the insured?

Back 8

the person covered by the policy of insurance who may or may not be the applicant or policyowner

Front 9

Who is the insurer (principal)?

Back 9

the company who issues a policy of insurance

Front 10

What is Life Insurance?

Back 10

a coverage upon a persons life, and granting , purchasing or disposing of annuties.

Front 11

Who is a policy owner?

Back 11

the person who is entitled to exercise the rights and privelages in the policy and who may or may not be the insured.

Front 12

What is a premium?

Back 12

The money paid to the insurance company for the policy of insurance.

Front 13

What are the agents 2 main responsibilities?

Back 13

1.make sure the application is completely filled out correctly
2. Make sure the application is filled out to the best of the applicant's knowledge.

Front 14

What should the agent do if he feels that there could be some misrepresentation?

Back 14

He/she must inform the insurance company.

Front 15

What is underwriting?

Back 15

the process in which an insurance company determines whether or not a particular applicant is insurable, and if so, what premium to charge.

Front 16

What is a field underwriter?

Back 16

usually what the agent is called because the agent usually is the one that has solicited the potential insured.

Front 17

What are the 6 resposibilities of the agent as a field underwriter?

Back 17

1.Helping prevent adverse selection
2.the proper solicitation of applicants
3.completing the application
4.obtaining the required signatures
5.collecting the intial premium and issuing the receipt, if applicable
6.delivering the policy

Front 18

What is the application?

Back 18

the starting point and basic source of information used by the company in the risk selection process.

Front 19

What are the 3 basic sections in an application?

Back 19

1. General Info
2. Medical Info
3. The agents report

Front 20

What the agent's (producer's) report purpose?

Back 20

it is used by the agent to discuss his or her personal observations concerning the proposed insured.

Front 21

What signatures are required?

Back 21

Both the agent and the proposed inusred (usually the applicant). If the proposed insured and the policyowner are not the same person, such as a buisness purchasing insurance on an employee, then the policy owner must also sigh the application.

Front 22

What signatures are required?

Back 22

Both the agent and the proposed inusred (usually the applicant). If the proposed insured and the policyowner are not the same person, such as a buisness purchasing insurance on an employee, then the policy owner must also sigh the application.

Front 23

What should an agent do if there is a change in the application?

Back 23

1. they can have the applicant correct the information and intial the change
2. complete a new application
NO WHITEOUT EVER!!

Front 24

What happens if any questions are left unanswered?

Back 24

the contract will be interepted as if the insurer waived its right to have an anwer to that question. They would later be barred from any right of denying coverage based on any info that the unanswered might have developed.

Front 25

Where is the application sent after it is completed?

Back 25

The insurance company's home office where the company underwriters have the final say as to the acceptablitity of the applicant.

Front 26

What is the main resposibilities of the underwriter?

Back 26

They are responsible for protecting the insurer against adverse selection.

Front 27

What is adverse selection?

Back 27

risks which are more likely to suffer a loss.

Front 28

What are the 4 primary criteria and underwriter will use in assesing the desirability of a particular candidate for life insurance?

Back 28

1.applicants health (current and past)
2.occupation
3.lifestyle and hobbies
4.habits

Front 29

What is insurable interest?

Back 29

the possibility of the policy owner losing money or something of value in the event of a loss.

Front 30

True or False
Insurable interest does not have to exsist at the time of application.

Back 30

FALSE!!!!

Front 31

What are the 3 recognized areas in which insurable interest exists?

Back 31

1. An applicant insuring his or her own life
2. An applicant insuring the life of a family memeber (relative or spouse)
3. An applicant insuring the life of a business partner, key employee, or someone who has a financial obligation to them.

Front 32

When can an underwriter require a medical examination?

Back 32

When the applicant has a higher amount of coverage, or if the application raised additional questions concerning the prosepective's health.

Front 33

What are the 2 options for a medical exam?

Back 33

1. The insurer may only request a paramedical report which is completed by a paramedic or a registered nurse.
2.The underwriter may require an attending physician's statement (APS) from a medical practitioner who treated the applicant for a prior medical problem.

Front 34

What is will the underwriter usually request in addition to the paramedical report and the attending physicians report?

Back 34

A Medical Information Bureau Report (MIB)

Front 35

True or False
The Medical Information Bureau is a nonprofit trade organization.

Back 35

TRUE!!!!

Front 36

What is the rating classification?

Back 36

the risk in deciding whether or not the applicant should pay a higher or lower premium

Front 37

What are the 3 risk classifications?

Back 37

1.Standard
2.Substandard
3.Preferred

Front 38

What are standard risks?

Back 38

persons who are according to a company's underwriting standards, are entitled to insurance protection without extra rating or special restrictions.

Front 39

What are substandard risks?

Back 39

applicants that are not acceptable at standard rates because of physical condition, personal or family history of disease, occupation, or dangerous habits.

Front 40

What is another name for substandard risks?

Back 40

High exposure risks

Front 41

Why are substandard policies referred to as "rated"?

Back 41

Because they can be issued with a premium rated-up, resulting in a higher premium

Front 42

What are preferred risks?

Back 42

those induviduals who meed certain requirements and qualify for a lower premiums that standard riks. These applicants have a superior physical condition, lifestyle, and habits. DUH!!

Front 43

When does the agent deliver the policy to the inusred?

Back 43

Once the underwriting process has been completed and the company issues the policy

Front 44

What is the best method for delivering a policy?

Back 44

Personal delivery!!!

Front 45

What is a constructive delivery?

Back 45

when the insurer relinquishes control of the policy by mailing it to the policyowner, legally the policy is considered delivered.

Front 46

True or False
Mailing a policy directily to the policy owner is not legal.

Back 46

FALSE!!!

Front 47

When should the initial premium be collected if it is not collected during application?

Back 47

At the time of policy delivery.

Front 48

What is a statement of good health?

Back 48

a statement from the applicant at the time of policy delivery that verifies that the insured has not suffered any injury or illness since the application date. This is obtained when the premium is not collected upon application.

Front 49

What is a buyer's guide?

Back 49

generic info about life insurance policies that contains, and is limited to, language approved by the commissioner or director.

Front 50

What is a policy summary?

Back 50

a written statement decscribing the features and elements of a policy.

Front 51

What is an illustration?

Back 51

a presentation or depection that includes non-guarenteed elements of a policy of induvidual or group life insurance over a period of years.

Front 52

What is replacement?

Back 52

any transaction in which new life insurance or new annuity is to be purchased and it is known or should be known to the proposing producer that by reason of transaction, existing life insurance or annuties.

Front 53

Who is relpalcing insurer

Back 53

the company that issues the new policy

Front 54

Who is the exsisting insurer?

Back 54

the company whose policy is being replaced

Front 55

What does the policyholders protection act not apply to?

Back 55

1.Credit Life Insurance
2.Group life insurance or group annuity policies
3.contacts for employee benifits or welfare plans as defined by ERISA
4.Purchase or additional insurance under guaranteed insurablility or conversion options
5.Short-term nonrenewable life policies written for less than 31 days
6.An exisiting less than 5 year non-renewable, nonconvertible term life policy
7. Replacing life insurance under a conditional receipt issued by the same company

Front 56

True or False
Every insurer operating in Oklahoma must inform its agents about the replacement regulations.

Back 56

TRUE!!!

Front 57

How many days must an insurer review each statement before beginning the underwriting process to determine whether the policy is a replacement?

Back 57

No later than 5 days after the insurer recieves teh application.

Front 58

How is the replaced insurer notified if the applicant signs a statement indicating that they replaced insurer needs to be notified and how many does should this occur?

Back 58

A written notification to the home or office of each replaced insurer within 5 days of reciept of the application.

Front 59

What 5 things must a written notification include?

Back 59

1. Name of the applicant
2.Name of the insured
3.Number of the policy being replaced
4.Generic name and face amount to the replacing policy
5. Legal name of the insurers

Front 60

How long must the replacing insurer maintain copies of the notice, statement, and notification to the replaced insurers?

Back 60

At least 3 years!!
Holy crap!

Front 61

How many days does the policy owner have to return the policy for a full refund of premiums paid?

Back 61

20 daysof delivery

Front 62

True or False
The insurer does not have to inform the policy owner that the have the right to return the policy within 20 days for a full refund of premiums paid.

Back 62

FALSE!!!
You must inform them!!!