New York State Life Insurance Exam Questions
Question 1 of 5.
Which of the following is TRUE concerning the conversion of group life insurance coverage to an individual policy?
A. It applies whenever life insurance coverage terminates
B. The insured receives a paid-up conversion policy upon termination of employment unless he or she informs the insurer otherwise
C. An insurer cannot require evidence of insurability before issuing a conversion policy
D. The premiums under the conversion policy will be the same
Explanation: Group life insurance conversion allows an insured to convert to an individual policy without proving insurability, protecting those with health issues, but it does not apply to all terminations, does not provide a paid-up policy, and premiums increase based on age.
Question 2 of 5.
An annuity product linked to a market-related rate of return is called
A. a fixed annuity
B. an indexed annuity
C. a deferred annuity
D. a tax-sheltered annuity
Explanation: An indexed annuity earns interest or provides gains linked to a stock market index, such as the S&P 500, unlike a fixed annuity which offers a guaranteed rate of return that remains constant, a deferred annuity where payments are made at a later date, or a tax-sheltered annuity which is a type of retirement plan not specifically defined by its return structure.
Question 3 of 5.
The Group Life Underwriting risk selection process helps protect insurers from
A. risk selection
B. medical underwriting
C. adverse selection
D. risk underwriting
Explanation: The Group Life Underwriting risk selection process mitigates adverse selection, where individuals with higher-than-average risk are more likely to seek insurance, by ensuring a balanced risk pool, whereas risk selection and risk underwriting are redundant terms and medical underwriting is a component of the process, not the risk it addresses.
Question 4 of 5.
What is the purpose of the policy review when an agent delivers a new life insurance policy to the insured?
A. to confirm that the insured understands all aspects of the policy
B. to give the agent a chance to sell another policy to the insured
C. to allow the insured to return the policy for a refund of the premium
D. to permit the parties to revise the policy provisions, terms, and conditions
Explanation: The policy review at delivery ensures the insured understands the policy, confirms it meets their needs, verifies correct document signing, and reduces the likelihood of returns during the "free-look" period, unlike selling another policy, allowing premium refunds, or revising policy terms which are not primary purposes.
Question 5 of 5.
The PRIMARY purpose of the Fair Credit Reporting Act is to
A. alert insurers regarding applicants who may have poor credit histories and may be adverse risks to the company
B. safeguard consumers from creditors who may use an applicant's credit history for purposes other than underwriting
C. forewarn an insurer about an applicant's recent bankruptcy
D. protect consumers using specific guidelines established by the Federal Government
Explanation: The Fair Credit Reporting Act regulates consumer credit information to protect consumers by ensuring report accuracy and access, establishing consumer rights rather than primarily benefiting insurers or creditors, though it impacts their use of credit histories.