Chapter 2(producer responsibilities)

Question 1

A ___________ provides basic, generic information about life insurance policies that contains, and is limited to, language approved by the Department of Insurance.

Answer 1

buyer’s guide

Question 2

A ___________ is a written statement describing the features and elements of the policy being issued.

Answer 2

policy summary

Question 3

The_________ compares the cash values available to buyers if they surrender the policy in 10 or 20 years.

Answer 3

Traditional Net Cost method

Question 4

_____________ method considers the time value of money (or investment return on the insurance premium had it been invested elsewhere) by applying an interest adjustment to yearly premiums and dividends.

Answer 4

Interest-Adjusted Net Cost

Question 5

Two versions of the interest-adjusted method are the___________ and the net payment cost index.

Answer 5

surrender cost index

Question 6

Replacement is a practice of terminating an existing policy or letting it lapse, and obtaining a new one.

Answer 6

Replacement

Question 7

_______________ means any transaction in which new life insurance or a new annuity is purchased and, as a result

Answer 7

Replacement

Question 8

_____________ is the company that issues the new policy

Answer 8

Replacing insure

Question 9

___________ is the company whose policy is being replaced.

Answer 9

Existing insurer

Question 10

Insurers cannot advertise protection by the ____________

Answer 10

Insurance Guaranty Association.

Question 11

_____________ is the risk selection and classification process

Answer 11

Underwriting

Question 12

The agent is the company’s front line, and is referred to as a ____________ because the agent is usually the one who has solicited the potential insured.

Answer 12

field underwriter

Question 13

A life insurance producer is the company’s field _______________

Answer 13

underwriter

Question 14

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

Answer 14

The Application

Question 15

____________ of the application includes the general questions about the applicant, such as name, age, address, birth date, gender, income, marital status, and occupation.

Answer 15

General Information

Question 16

_____________ of the application includes information on the prospective insured’s medical background, present health, any medical visits in recent years, medical status of living relatives, and causes of death of deceased relatives

Answer 16

Medical Information

Question 17

The a_____________ provides the agent’s personal observations concerning the proposed insured.

Answer 17

gent’s (producer’s) report

Question 18

Both the _________ and the proposed insured (usually the applicant) must sign the application.

Answer 18

agent

Question 19

Whenever the agent collects premiums, the agent must issue a ________

Answer 19

premium receipt.

Question 20

The most common type of receipt is a __________, which is used only when the applicant submits a prepaid application.

Answer 20

conditional receipt

Question 21

The ____________ is used most often with property and casualty insurance.

Answer 21

unconditional (binding) receipt