test 4

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riosjuank
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231816
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test 4
Updated:
2013-09-04 00:39:12
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health insurance
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test chapter 4
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  1. 1. An insurance salesperson who offers a $100 gourmet dinner in exchange for the purchase of a lifeinsurance policy would be considered to have violated ethical sales practices by

    A. twisting
    B. churning
    C. rebating
    D. replacement
    C. rebating
    (this multiple choice question has been scrambled)
  2. 2. All of the following are reasons why it is seldom in the best interest of a policyholder to replace a lifeinsurance policy with a new one EXCEPT

    A. most of the first year premium is swallowed up in commission
    B. replacement policies are never in the best interest of the policyowner
    C. the premium is higher because the insured is older
    D. waiting periods begin anew
    B. replacement policies are never in the best interest of the policyowner
    (this multiple choice question has been scrambled)
  3. 3. Which of the following is an example of churning?

    A. Representing an insurance policy as a retirement plan
    B. Replacing a policy within the same company
    C. Illegally inducing a person to drop existing insurance to purchase similar coverage with another agent or company
    D. Rephrasing a policy provision in such a way that it says just the opposite of the original.
    B. Replacing a policy within the same company
    (this multiple choice question has been scrambled)
  4. 4. All of the following are involved in a product presentation EXCEPT

    A. pressure
    B. education
    C. discussion
    D. disclosure
    A. pressure
    (this multiple choice question has been scrambled)
  5. 5. The use of preprinted material in a sales presentation is recommended for which of the following reasons?

    A. Such material generally has been reviewed for compliance.
    B. The agent doesn't have to know exactly how a product works.
    C. It saves a lot of time in explanations.
    D. The agent can give it to the client instead of answering the client's questions
    A. Such material generally has been reviewed for compliance.
    (this multiple choice question has been scrambled)
  6. 6. Which of the following is NOT part of a product presentation?

    A. Asking for referrals
    B. Discussing a policy's limit
    C. Explaining policies
    D. Motivating the client
    A. Asking for referrals
    (this multiple choice question has been scrambled)
  7. 7. Solicitation of insurance includes

    a. inviting prospective purchasers to enter a contract for an insurance product
    b. making general or specific recommendations concerning insurance products
    c. comparing insurance products, advising on insurance matters, or interpreting policies or coverages
    d. all of the above
    d. all of the above
  8. 8. The basis for many state statutes regulating insurance advertising is the NAIC's

    A. McCarran-Ferguson Act
    B. Fair Credit Reporting Act
    C. Ethics and Advertising Act
    D. Unfair Trade Practices Act
    D. Unfair Trade Practices Act
    (this multiple choice question has been scrambled)
  9. 9. When an agent spreads a false story that damages a competing agent's reputation, the offense is called
    A. twisting
    B. defamation
    C. rebating
    D. disclosure
    B. defamation
    (this multiple choice question has been scrambled)
  10. 10. Melanie is a newly licensed producer. A customer calls and asks for some product recommendations, but Melanie thinks that she is not yet qualified to help the customer. Therefore, Melanie has an ethical responsibility to

    A. refuse to speak to the customer
    B. answer the customer's questions on the basis of her current knowledge and then send a letter confirming their conversation
    C. assure the customer that because she is licensed, there is a presumption that the advice Melanie gives is reliable
    D. seek help from a more experienced colleague or other professional before responding to the customer's questions
    D. seek help from a more experienced colleague or other professional before responding to the customer's questions
    (this multiple choice question has been scrambled)
  11. 11. Which of the following phrases could agents avoid using when explaining policies to prospective applicants or clients?

    A. Cash value
    B. Vanishing premium
    C. Death benefit
    D. Flexible premium
    B. Vanishing premium
    (this multiple choice question has been scrambled)
  12. 12. Which of the following is NOT a provision of NAIC's Model Regulation on Illustrations?

    A. Each policy illustration must be complete.
    B. Each policy illustration must show that cash values and coverage vary depending on changes in the insurer's costs and dividends.
    C. Each policy illustration must be accompanied by a written explanation or policy summary.
    D. Each policy illustration should use the words "vanish" and "vanishing premium" sparingly.
    D. Each policy illustration should use the words "vanish" and "vanishing premium" sparingly.
    (this multiple choice question has been scrambled)
  13. 13. Which of the following should a producer NOT do during a presentation?

    A. Openly discuss a policy's limitations
    B. Motivate the client
    C. Sell a policy
    D. Explain and educate
    C. Sell a policy
    (this multiple choice question has been scrambled)
  14. 14. Diverting insurance funds for personal use is an example of

    A. replacement
    B. misuse of premiums
    C. misrepresentation
    D. rebating
    B. misuse of premiums
    (this multiple choice question has been scrambled)
  15. 15. Selling variable universal life insurance policies as mutual funds is an example of a prohibited practicecalled

    A. replacement
    B. misrepresentation
    C. twisting
    D. rebating
    B. misrepresentation
    (this multiple choice question has been scrambled)
  16. 16. When values of an insurance policy are used to purchase another policy with the same insurer for thesole purpose of earning additional premiums or commissions, this practice is called

    A. churning
    B. replacement
    C. misalliance
    D. rebating
    A. churning
    (this multiple choice question has been scrambled)
  17. 17. Jim gives Bill a couple of tickets to a Florida Marlins game to thank him for purchasing a policy. This is an example of

    A. twisting
    B. rebating
    C. churning
    D. replacement
    B. rebating
    (this multiple choice question has been scrambled)
  18. 18. In what phase of the selling process are serious problems of misrepresentation likely to occur?

    A. Approach
    B. Fact finding and needs analysis
    C. Presentation and recommendations
    D. Policy delivery and ongoing service
    C. Presentation and recommendations
    (this multiple choice question has been scrambled)
  19. 19. The purpose behind full disclosure requirements is to

    A. help a client distinguish one insurer's product from a similar offering from another insurer
    B. make sure a client is told everything there is to know about a product
    C. make sure agents comply with the letter of the law
    D. help a client make an informed decision
    D. help a client make an informed decision
    (this multiple choice question has been scrambled)
  20. 20. Which of the following is NOT part of the home office underwriting process?

    A. Medical Information Bureau report
    B. Inspection report
    C. Applicant's analysis report
    D. Credit report
    C. Applicant's analysis report
    (this multiple choice question has been scrambled)
  21. 21. Which of the following is the goal of a sales presentation?

    A. To convince the client that the producer's recommendations are best d. To explain the rules and regulations governing particular insurance products
    B. To sell the client as many products as possible
    C. To educate the client so the client can make his or her own decision about what's right for him or her
    C. To educate the client so the client can make his or her own decision about what's right for him or her
    (this multiple choice question has been scrambled)
  22. 22. Ethics is best described as

    A. laws and statutes enacted by duly elected representatives
    B. religious rituals and ceremonies
    C. instructions on how to interact with fellow members of a group or community
    D. a society's laws and regulations
    C. instructions on how to interact with fellow members of a group or community
    (this multiple choice question has been scrambled)
  23. 23. Which of the following four steps is NOT part of a sales presentation?

    A. Introduce the recommended policy
    B. Review and reestablish the client-producer relationship
    C. Review the client's needs and priorities
    D. Review the product application
    D. Review the product application
    (this multiple choice question has been scrambled)
  24. 24. Which of the following is an objective of the NAIC?

    A. To promote federal legislation of the insurance industry
    B. To develop continuing education courses for insurance providers
    C. To develop model insurance policies for adoption by insurers
    D. To encourage uniformity in state insurance laws and regulations
    D. To encourage uniformity in state insurance laws and regulations
    (this multiple choice question has been scrambled)

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