AD Banker Comprehensive Exam, Questions with accurate answers. 2022/2023. Rated A

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AD Banker Comprehensive Exam, Questions with accurate answers. 2022/2023. Rated A A producer who is acting as an agent is representing: A The insured, the applicant and the beneficiary B ... Always the insured C The insured and the insurer D Always the insurer - ✔✔D In order to be valid, a contract must be between individuals considered legally able to enter into an agreement. This principle is known as: A Restricted persons B Considerations C Competent parties D Agreement - ✔✔C A company that is licensed to sell insurance in a particular state is: A A domiciled company B A nonadmitted company C An authorized company D A foreign companyA company that is licensed to sell insurance in a particular state is: - ✔✔C An insurance contract is an aleatory contract. This means: A Equal value is not given by both parties to the contract B The contract must be for a legal purpose C Parties to the contract must have the legal capacity to enter into the contract D Statements made in the application are guaranteed to be true in all respects - ✔✔A Which of the following would be considered a speculative risk? A The possibility your car is totaled in an auto accident B The possibility the painting you bought might be a long-lost masterpiece C The possibility you will die on the job at a young age D The possibility you will become disabled - ✔✔B Which is the proper term for a company owned by its policyowners? A A charitable insurance company B A reciprocal insurance company C A domestic insurance company D A mutual insurance company - ✔✔D All of the following are elements of a contract, except: A Offer and acceptance B Legal purpose C Authority D Consideration - ✔✔C Each of the following would be an element in the definition of fraud, except: A A false statement on the application that is material to the acceptance of the risk B Withholding of known material facts C Intentional material misrepresentation with the intent of causing injury to another party D An individual warrants a fact stated on the application - ✔✔D Legally speaking, a producer has a __________ duty when handling life insurance premiums and applications for an insurer. A Fiduciary B Undisputed C Negotiated D Professional - ✔✔A _________ refers to the jurisdiction where an insurer was formed or incorporated. A Authorized B Approved C Domicile D Admitted - ✔✔C To address adverse selection what can an insurer legally do? A Limit the amount of coverage issued B Raise the premium higher than most people can afford to pay C Establish and enforce sound underwriting practices D Not offer policies to those over age 55 - ✔✔C The relationship of a person who acts on behalf of a company whereby the person's actions can bind the company is known as: A Surplus lines or excess insurance B The law of large numbers C The law of agency D Brokerage business - ✔✔C _____________ consists of groups of underwriters called syndicates, each of which specializes in insuring a particular type of risk. A Lloyds of London B Risk retention insurers C Self insurers D Reciprocal insurers - ✔✔A The insurance industry is primarily regulated at the _________ level. A State B County C Federal D Insurers - ✔✔A Which of the following is NOT considered one of the essential elements of a contract? A Competent Parties B Legal Purpose C Offer and Acceptance D Conditions - ✔✔D The most effective way to ensure that the applicant will accept the policy when it is issued is: A To collect the initial premium upon policy delivery, not at the time of application B To deliver the policy with a gift certificate to a local restaurant C Offer to pay the first premium for them D To have the applicant pay the initial premium at the time of application - ✔✔D Which of the following is NOT a characteristic of life insurance as property? A It may be paid for in installments B It requires a fund portfolio manager C It creates an immediate estate D It requires no physical maintenance - ✔✔B Which of the following statements about the average number of people who die each year is true? A It is called the mortality rate B It is called the principle of indemnity C It is called the predictability rate D It is called the principle of life insurance - ✔✔A Insurers generally calculate premiums on: A A weekly basis B An annual basis C A monthly basis D A daily basis - ✔✔B Third-party ownership refers to: A A situation where the beneficiary has no insurable interest in the insured B A situation where the beneficiary is irrevocable C A situation where the policyowner is someone other than the insured D A situation where the applicant is someone other than the payor - ✔✔C With regard to life insurance policies, loading refers to: A The amount of money the insurance company reserves for expected mortality costs B The amount the company anticipates for dividend payout C Assignment of the appropriate share of the company's operating expenses to each policy D Surrender charges applied to the cash surrender of the policy - ✔✔C Which statement best describes the term reserve? A That amount that enables the insurer to provide sales bonuses and incentives for their commissioned sales staff B That amount that, when increased by future premiums on outstanding policies, and interest on those premiums will enable the company to meet future death claims C That amount, required by law, that the company must hold in reserve to pay only cash value accumulations on permanent insurance policies D That amount insurer's maintain in reserve to guarantee that they can profit from future death claims - ✔✔B Controlled business may be defined as insurance sold: A To individuals needing an increased amount of term insurance B To existing clients only C To anyone willing to buy D To the producer, the producer's family and friends, and the producer's business associates - ✔✔D Which of the following policies could be expected to have the lowest premium? A Whole life B Endowment to age 65 C Single pay life D 10-pay life - ✔✔A A variable life policy: A Has a fixed death benefit B Death benefit varies to reflect the investment results of the underlying separate account, but never falls below a guaranteed minimum C Guarantees a minimum return on the cash value account D Has flexible premiums that can be changed as well as frequency - ✔✔B If an insured currently has a policy with a waiver of premium rider and should change to a more hazardous occupation, the insurance company will: A Void the policy B Continue the waiver of premium rider C Increase the premium D Cancel the waiver of premium rider - ✔✔B The waiver of premium rider normally expires at age: A 55 B 60 C 70 D 65 - ✔✔B Term insurance differs from permanent insurance in that term: A Builds cash value and provides limited death benefit options only B Costs more than permanent insurance C Builds no cash value, pays a death benefit only D Provides a variety of living benefits - ✔✔C If Greg's policy on his own life has a guaranteed insurability rider, it means that he can purchase more insurance: A On his own life at certain specified ages without proof of insurability B On his own life at specified periods of time at a fixed guaranteed premium C Anytime before the age of 65 D On his own life at specified periods, but must prove insurability - ✔✔A In many jurisdictions, permanent policies are required to have some cash value by the end of: A The fourth year B The first year C The second year D The third year - ✔✔D A limited pay life policy: A Requires premium payments for a specified number of years or until a specified age is reached B Start off with small premium payments and then they increase, but only up to a specified limit C Is offered in limited face amounts only D Can only be purchased by individuals on a specified limited income - ✔✔A Which of the following provides the basis for the benefit amount paid to an insured under a disability income rider? A The length of time income payments are to be paid out B The face amount of the policy C The elimination period D The amount of monthly benefit selected - ✔✔B Allen purchases an estate builder (jumping juvenile) policy for his 5-year old son, Donald. Suppose that when Donald reaches age 21 his father presents him with the policy as a gift. Which of the following statements is NOT correct? A Donald has enjoyed protection against the problems of premature death B The premium will continue to be based on his original age of 5 C The face value of Donald's policy has increased by 5 times D Donald must change the beneficiaries immediately - ✔✔D [Show More]

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