9.2f

Question 1

Sometimes the decision to replace an existing life insurance policy may be for good reason, but not in every case. Before replacing or changing a life insurance policy, it is necessary to first _____ and decide what will be the best decision for the long term, including what is best for the beneficiaries being protected.

Answer 1

assess the needs of the insured

Question 2

It is unethical and illegal for an agent to replace an existing policy in an attempt to earn first-year commissions if the replacing policy is not ______.

Answer 2

in the best interest of the insured.

Question 3

NAIC has adopted a Model Life Insurance Replacement regulation that many states have adopted to ensure the proper replacement of life insurance. The purpose of this regulation is to create a standard in which each state can follow that requires life insurers and agents to abide by in ______.

Answer 3

soliciting insurance in a replacement situation

Question 4

Essentially, the NAIC model applies to individual life insurance solicitation and requires a replacing insurer and agent to fully acknowledge and communicate this replacement with the insured and replaced insurer. The overall goal is to adopt a fair and safe replacement of individual life insurance with the focus on the ______.

Answer 4

insured’s long-term interests.

Question 5

Retention is defined as ______. Often, the retention of an insured’s policy is preferred over its replacement due to the cash value accumulation over the life of the policy.

Answer 5

maintaining an insured’s current life policy as the policy matures over time

Question 6

Replacing a policy often ______, so careful consideration should be given to the accumulated cash value of a policy in determining whether to replace or retain the life insurance plan.

Answer 6

reduces or forfeits the current policy’s cash value