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AD BANKER COMPREHENSIVE EXAM 2024 WITH 100% CORRECT ANSWERS/AD BANKER COMPREHENSIVE EXAM 2024 WITH 100% CORRECT ANSWERS/AD BANKER COMPREHENSIVE EXAM 2024 WITH 100% CORRECT ANSWERS/AD BANKER COMPREHENSIVE EXAM 2024 WITH 100% CORRECT ANSWERS/AD BANKER COMPREHENSIVE EXAM 2024 WITH 100% CORRECT ANSWERS/AD BANKER COMPREHENSIVE EXAM 2024 WITH 100% CORRECT ANSWERS
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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 - correct answer ✔✔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
Agreement - correct answer ✔✔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: - correct answer ✔✔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
A mutual insurance company - correct answer ✔✔D All of the following are elements of a contract, except: A Offer and acceptance B Legal purpose C Authority D Consideration - correct answer ✔✔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 - correct answer ✔✔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 - correct answer ✔✔A _________ refers to the jurisdiction where an insurer was formed or incorporated. A Authorized B Approved C Domicile D
Brokerage business - correct answer ✔✔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 - correct answer ✔✔A The insurance industry is primarily regulated at the _________ level. A State B County C Federal D
Insurers - correct answer ✔✔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 - correct answer ✔✔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 - correct answer ✔✔D
Insurers generally calculate premiums on: A A weekly basis B An annual basis C A monthly basis D A daily basis - correct answer ✔✔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 - correct answer ✔✔C With regard to life insurance policies, loading refers to:
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 - correct answer ✔✔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 - correct answer ✔✔B
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 - correct answer ✔✔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 - correct answer ✔✔B The waiver of premium rider normally expires at age: A 55 B 60 C 70 D 65 - correct answer ✔✔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 - correct answer ✔✔C
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 - correct answer ✔✔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 - correct answer ✔✔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 - correct answer ✔✔D The type of policy that can be changed from one that does not accumulate cash values to one that does is a: A Universal life policy B Variable life policy C Permanent policy D
Must repay the premiums paid by the company during disability - correct answer ✔✔C In a whole life insurance policy: A The insurance protection remains level throughout the policy period, and the cash value does not impact the amount of insurance protection at all B The cash value is equal to the face amount of insurance throughout the life of the policy C The cash value provides no living benefits until the policy endows D The cash value is greatest at the end of the policy period, and the insurance protection is greatest at the start of the policy - correct answer ✔✔D Warren and Wilma have a joint life policy. Warren dies and the policy pays nothing. Later on, Wilma dies and the policy death benefit is paid to the beneficiary. This is called a: A Variable life policy B Level term policy C Survivorship or second-to-die policy
Reduced paid up policy - correct answer ✔✔C Each of the following is a source of life insurance policy dividends, except: A Guaranteed cash value accumulations B Reductions in operating expenses C Savings in mortality D Additional interest earnings - correct answer ✔✔A Each of the following statements about policy loans is correct, except: A A policy loan cannot be made on a policy until it has been in force long enough to accumulate some cash value B If a policy has cash value, the insurance company cannot refuse to lend the policyowner money C The loan value of a policy cannot exceed the current cash value
