Producer Responsabilities

Question 1

Traditional net cost method

Cost index

Answer 1

Shows the net amount to be paid for the pure insurance protection of both policies during the comparison period, without accounting for a policy’s cash value and policy dividends.

Question 2

Interest-adjusted net cost method

Cost index

Answer 2

Shows the real cost of owning each policy during the comparison period by accounting for each policy’s projected cash value and policy dividends.

(Iit is the most used today)

Question 3

How long does the National Do Not Call registry “take effect”

Answer 3

Business have up to 31 days after registration to comply

Question 4

Field Underwriting

Answer 4

Activities a producer performs when seeking applications for insurance. This includes requesting information about prospective insureds and helping people fill out applications for coverage.

Question 5

Agent’s Report

Answer 5

Tells the underwriters what the producer knows about the applicant

Question 6

Backdating (aka: save age)

Answer 6

Backdating a policy by up to 6 months

Authorized by the insurer only!

Question 7

Premium receipt

Answer 7

The reciept an agent normally gives an applicant when the applicant submits an application for life insurance with the first premium payment.
The reciept offers interim coverage while the application is being approved and the policy is being formally issued.

*Given only when applicant submits first premium payment w/ application

Question 8

Conditional receipt

Answer 8

Provides coverage that conditionally starts when the application is signed and and requried medical exams are completed.

The receipt provides coverage on the condition that underwriting dertermines the insured to be insurable.

Death benefits are often capped

Question 9

Binding Receipt

uncommon in life insurance

Answer 9

Guarentees coverage from the time the applicant completes the application
(or the insured completes the medical exam)

Guarentees coverage through the underwriting period

Question 10

Temporary Insurance Agreement

Answer 10

If the propsed insured can answer “no” to several medical history questions, temporary coverage is issued
- Recent hospital admitance
- Treatment for various named diseases
- History of life insurance application modified, declined , rated

Term policy, normally ends after 90 days