Pennsylvania Insurance Laws and Rules (Life Code) Review Questions and Correct Answers

All of the following would be defined as having an insurable interest EXCEPT - a son in his father. - a wife in a husband. - a friend in a longtime friend. - an employer in a key employee. - a friend in a longtime friend. An insurable interest is defined as an interest resulting from love and affection, in the case of persons related by blood or marriage; or an economic interest in having the insured's life continue, and not arising only upon the insured's death, in the case of all other persons. The friends in option C do not fit either definition. The life insurance disclosure statement that must be presented to an applicant no later than the time of application must - include an explanation of all riders that have been purchased and attached to the policy. - be maintained by the producer for at least ten years after the policy's expiration. - include the amount of coverage and the benefits offered by the policy. - contain the surrender cost index. - include the amount of coverage and the benefits offered by the policy. Life insurance disclosure must contain the amount of coverage and benefits offered, the name, age and sex of the applicant, the source of the insurance, the basic policy information, the premiums and how they may change and other information. The document must be maintained by the insurer for a period of at least three years. The surrender cost index must be provided to the applicant upon request and is not part of the disclosure statement. All of the following would be considered policy replacement, EXCEPT - purchase of a new policy will cause an existing life insurance policy to be terminated. - purchase of a new policy will cause an existing life insurance policy to be amended in a way which will not reduce coverage. - purchase of a new policy will cause an existing life insurance policy to be pledged as collateral for an amount comprising 50% of the loan value of the policy. - purchase of a new policy will cause an existing life insurance policy to be reissued with a reduction in cash value. - purchase of a new policy will cause an existing life insurance policy to be amended in a way which will not reduce coverage