Life Insurance Exam – Wisconsin ACTUAL
QUESTIONS AND CORRECT ANSWERS
Mortality - Correct answers✔The rate people will die
Morbidity - Correct answers✔The rate people will get sick
Peril - Correct answers✔The cause of loss and the event insured against. Ex:
premature death, dependency during old age, accident, and sickness
Adverse Selection - Correct answers✔The tendency for poorer than average risks to seek out
insurance
Annuity - Correct answers✔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 - Correct answers✔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 - Correct answers✔Llimited liability companies or member-owned
corporations that collectively assume and spread their members' liability risks through
selfinsurance. All members of a risk retention group must be employed in similar types of
businesses so that they have similar liability exposures
, Express Authority - Correct answers✔The explicit authority granted to the agent by the principal
as written in the agency contract
Implied Authority - Correct answers✔Not specifically expressed by the principal to the agent in
the agency contract, but is implicit in the agent's duties
Apparent Authority - Correct answers✔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) - Correct answers✔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: -
Correct answers✔-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 - Correct answers✔Provide a safety net for all member life, health and
annuity insurers in a particular state
Defamation - Correct answers✔Any false, maliciously critical, or derogatory communication -
written or oral - that injures another's reputation, fame, or character
QUESTIONS AND CORRECT ANSWERS
Mortality - Correct answers✔The rate people will die
Morbidity - Correct answers✔The rate people will get sick
Peril - Correct answers✔The cause of loss and the event insured against. Ex:
premature death, dependency during old age, accident, and sickness
Adverse Selection - Correct answers✔The tendency for poorer than average risks to seek out
insurance
Annuity - Correct answers✔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 - Correct answers✔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 - Correct answers✔Llimited liability companies or member-owned
corporations that collectively assume and spread their members' liability risks through
selfinsurance. All members of a risk retention group must be employed in similar types of
businesses so that they have similar liability exposures
, Express Authority - Correct answers✔The explicit authority granted to the agent by the principal
as written in the agency contract
Implied Authority - Correct answers✔Not specifically expressed by the principal to the agent in
the agency contract, but is implicit in the agent's duties
Apparent Authority - Correct answers✔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) - Correct answers✔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: -
Correct answers✔-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 - Correct answers✔Provide a safety net for all member life, health and
annuity insurers in a particular state
Defamation - Correct answers✔Any false, maliciously critical, or derogatory communication -
written or oral - that injures another's reputation, fame, or character
