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Question 1 of 10
1. Question
Which one of the following does not affect insurance premium rates?
Correct
Mortality or morbidity, interest rates, and expenses all influence insurance premiums. A producer’s status does not affect insurance rates.
Incorrect
Mortality or morbidity, interest rates, and expenses all influence insurance premiums. A producer’s status does not affect insurance rates.
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Question 2 of 10
2. Question
To be sure that the insurer has the money available to pay claims as they arise, it is needed to maintain
Correct
Reserves are the funds’ insurers put aside to cover claims and other contingencies. It is needed to maintain reserves to ensure that the insurer has the money available to pay claims as they arise.
Incorrect
Reserves are the funds’ insurers put aside to cover claims and other contingencies. It is needed to maintain reserves to ensure that the insurer has the money available to pay claims as they arise.
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Question 3 of 10
3. Question
United Auto offers insurance to its employees. About 80% of the eligible employees are covered under the plan now. The plan is most likely
Correct
Generally, at least 75% of participation is required for contributory groups. Because 100% participation is needed for noncontributory groups, this is not a noncontributory group.
Incorrect
Generally, at least 75% of participation is required for contributory groups. Because 100% participation is needed for noncontributory groups, this is not a noncontributory group.
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Question 4 of 10
4. Question
Which of the following Group insurance does not generally require?
Correct
Underwriters consider the overall group, but there is no individual underwriting of the covered individuals and no medical exams required.
Incorrect
Underwriters consider the overall group, but there is no individual underwriting of the covered individuals and no medical exams required.
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Question 5 of 10
5. Question
Peter’s Printing funds all the claims in a year, regardless of the amount of the claim. Peter’s insurer manages the paperwork for the claims. What option is Peter’s Printing using?
Correct
Peter’s Printing is self-funding losses and using an insurer only for administrative services.
Incorrect
Peter’s Printing is self-funding losses and using an insurer only for administrative services.
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Question 6 of 10
6. Question
Ana’s Pet Shop pays a provisional premium at the beginning of the year. At the end of the year, Ana’s insurer has the right to change that premium by charging more or issuing a refund. Ana’s policy is funded using which premium option?
Correct
Under retrospective premium rating, the insurer will adjust the premium at the end of the year based on the amount of actual losses.
Incorrect
Under retrospective premium rating, the insurer will adjust the premium at the end of the year based on the amount of actual losses.
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Question 7 of 10
7. Question
XYZ Printing pays for all the routine claims. XYZ’s insurer pays for excess or unexpected claims beyond a specified trigger point. XYZ’s policy is funded using which premium option?
Correct
Under a minimum premium plan, the employer self insures the normal and expected claims up to a given amount, and the insurer funds only the excess amounts.
Incorrect
Under a minimum premium plan, the employer self insures the normal and expected claims up to a given amount, and the insurer funds only the excess amounts.
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Question 8 of 10
8. Question
Which one of the following should not be considered when a producer makes recommendations about the amount and type of insurance needed by an individual?
Correct
The producer is supposed to serve the client’s needs. The amount of commission should not be a factor in any recommendations.
Incorrect
The producer is supposed to serve the client’s needs. The amount of commission should not be a factor in any recommendations.
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Question 9 of 10
9. Question
Adam wishes to purchase enough insurance to support his wife for the rest of her life if he should die prematurely and then leave a sizeable inheritance for his children upon her death. Which method should be used to calculate the amount of insurance necessary?
Correct
The primary concern here is capital conservation. Capital conservation should be used to calculate the amount of insurance necessary in this case.
Incorrect
The primary concern here is capital conservation. Capital conservation should be used to calculate the amount of insurance necessary in this case.
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Question 10 of 10
10. Question
The kind of estate transfer made while the estate owner is still alive is known as
Correct
A transfer made while the estate owner is still alive in an inter vivos transfer.
Incorrect
A transfer made while the estate owner is still alive in an inter vivos transfer.