Wisconsin Life Insurance Exam @ 2023
Mortality - Answer The rate people will die
Morbidity - Answer The rate people will get sick
Peril - Answer The cause of loss and the event insured against.
Ex: premature death, dependency during old age, accident, and sickness
Adverse Selection - Answer The tendency for poorer than average risks to seek out
insurance
Annuity - Answer Annuities protect against the risk of living longer than expected.
Annuities provide a guaranteed life income to protect against the risk of depleting
retirement funds
Lloyds Associations - Answer Described as a market where individuals and groups
gather to exchange insurance, much like stock exchanges provide a place to buy, sell
and trade stocks
Risk Retention Groups - Answer Llimited liability companies or member-owned
corporations that collectively assume and spread their members' liability risks through
self-insurance. All members of a risk retention group must be employed in similar types
of businesses so that they have similar liability exposures
Express Authority - Answer The explicit authority granted to the agent by the principal
as written in the agency contract
Implied Authority - Answer Not specifically expressed by the principal to the agent in the
agency contract, but is implicit in the agent's duties
Apparent Authority - Answer Is a situation in which the insurer gives the customer a
reasonable belief that an agent has the power and authority to bind the principal, even
in cases where the agent does not have such authority
Fair Credit Reporting Act (FCRA) - Answer The Act requires consumer-reporting
agencies to implement policies and procedures to preserve the confidentiality, accuracy,
relevance, and appropriate utilization of consumer's private credit information
What cannot be in a consumer report unless for a life insurance policy of $150,000 or
more: - Answer -Bankruptcies dating back more than 10 years
, -Civil suits and judgments dating back more than seven years or cases in which the
statute of limitations has expired, whichever period is longer
-Tax liens dating back more than seven years
-Adverse information dating back more than seven years
-Reports of a consumer's arrests, indictments or convictions
Guaranty Associations - Answer Provide a safety net for all member life, health and
annuity insurers in a particular state
Defamation - Answer Any false, maliciously critical, or derogatory communication -
written or oral - that injures another's reputation, fame, or character
Rebating - Answer If a buyer of an insurance policy is given anything of significant value
as an inducement to purchase or renew a policy- saying you'll give them something in
addition like a membership to a club
Twisting - Answer The unethical act of persuading a policyowner to drop a policy solely
for the purpose of selling another policy without regard to possible disadvantages to the
policyowner- Often, it involves encouraging an insured to lapse on their current policy
and to take out another.
Churning - Answer The practice of using misrepresentation to induce a policyholder to
replace a policy issued by the insurer the producer represents, rather than the policy of
a competitor
Coercion - Answer Generally manipulates through the prospect of something desirable
Consideration - Answer Premium payment + application
Subrogation - Answer The right of the insurer to assume the rights of the insured and
sue the responsible third party for damages inflicted upon the insured.
Indemnity Insurance - Answer Insurance that compensates the beneficiaries of the
policies for their actual economic losses, up to the limiting amount of the insurance
policy
Four elements that need to be in every contract: - Answer Offer and acceptance,
consideration, competent parties, legal purpose
Four main parts of a life and health insurance contract - Answer The policy face,
insuring clause, conditions, exclusions
Insurable interest must be present at what time - Answer Time of the application
Aleatory contract - Answer There is an unequal exchange of value. One party has the
potential to receive more benefit than the other
Mortality - Answer The rate people will die
Morbidity - Answer The rate people will get sick
Peril - Answer The cause of loss and the event insured against.
Ex: premature death, dependency during old age, accident, and sickness
Adverse Selection - Answer The tendency for poorer than average risks to seek out
insurance
Annuity - Answer Annuities protect against the risk of living longer than expected.
Annuities provide a guaranteed life income to protect against the risk of depleting
retirement funds
Lloyds Associations - Answer Described as a market where individuals and groups
gather to exchange insurance, much like stock exchanges provide a place to buy, sell
and trade stocks
Risk Retention Groups - Answer Llimited liability companies or member-owned
corporations that collectively assume and spread their members' liability risks through
self-insurance. All members of a risk retention group must be employed in similar types
of businesses so that they have similar liability exposures
Express Authority - Answer The explicit authority granted to the agent by the principal
as written in the agency contract
Implied Authority - Answer Not specifically expressed by the principal to the agent in the
agency contract, but is implicit in the agent's duties
Apparent Authority - Answer Is a situation in which the insurer gives the customer a
reasonable belief that an agent has the power and authority to bind the principal, even
in cases where the agent does not have such authority
Fair Credit Reporting Act (FCRA) - Answer The Act requires consumer-reporting
agencies to implement policies and procedures to preserve the confidentiality, accuracy,
relevance, and appropriate utilization of consumer's private credit information
What cannot be in a consumer report unless for a life insurance policy of $150,000 or
more: - Answer -Bankruptcies dating back more than 10 years
, -Civil suits and judgments dating back more than seven years or cases in which the
statute of limitations has expired, whichever period is longer
-Tax liens dating back more than seven years
-Adverse information dating back more than seven years
-Reports of a consumer's arrests, indictments or convictions
Guaranty Associations - Answer Provide a safety net for all member life, health and
annuity insurers in a particular state
Defamation - Answer Any false, maliciously critical, or derogatory communication -
written or oral - that injures another's reputation, fame, or character
Rebating - Answer If a buyer of an insurance policy is given anything of significant value
as an inducement to purchase or renew a policy- saying you'll give them something in
addition like a membership to a club
Twisting - Answer The unethical act of persuading a policyowner to drop a policy solely
for the purpose of selling another policy without regard to possible disadvantages to the
policyowner- Often, it involves encouraging an insured to lapse on their current policy
and to take out another.
Churning - Answer The practice of using misrepresentation to induce a policyholder to
replace a policy issued by the insurer the producer represents, rather than the policy of
a competitor
Coercion - Answer Generally manipulates through the prospect of something desirable
Consideration - Answer Premium payment + application
Subrogation - Answer The right of the insurer to assume the rights of the insured and
sue the responsible third party for damages inflicted upon the insured.
Indemnity Insurance - Answer Insurance that compensates the beneficiaries of the
policies for their actual economic losses, up to the limiting amount of the insurance
policy
Four elements that need to be in every contract: - Answer Offer and acceptance,
consideration, competent parties, legal purpose
Four main parts of a life and health insurance contract - Answer The policy face,
insuring clause, conditions, exclusions
Insurable interest must be present at what time - Answer Time of the application
Aleatory contract - Answer There is an unequal exchange of value. One party has the
potential to receive more benefit than the other
