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
D. rebating
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
B. replacement policies are never in the best interest of the policyowner
3. Which of the following is an example of churning?
C. Replacing a policy within the same company
4. All of the following are involved in a product presentation EXCEPT
A. pressure
5. The use of preprinted material in a sales presentation is recommended for which of the following reasons?
B. Such material generally has been reviewed for compliance.
6. Which of the following is NOT part of a product presentation?
D. Asking for referrals
7. Solicitation of insurance includes
D. all of the above
8. The basis for many state statutes regulating insurance advertising is the NAIC's
A. Unfair Trade Practices Act
9. When an agent spreads a false story that damages a competing agent's reputation, the offense is called
C. defamation
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. seek help from a more experienced colleague or other professional before responding to the customer's questions
11. Which of the following phrases could agents avoid using when explaining policies to prospective applicants or clients?
D. Vanishing premium
12. Which of the following is NOT a provision of NAIC's Model Regulation on Illustrations?
B. Each policy illustration should use the words "vanish" and "vanishing premium" sparingly.
13. Which of the following should a producer NOT do during a presentation?
A. Sell a policy
14. Diverting insurance funds for personal use is an example of
C. misuse of premiums
15. Selling variable universal life insurance policies as mutual funds is an example of a prohibited practicecalled
C. misrepresentation
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
B. churning
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
B. rebating
18. In what phase of the selling process are serious problems of misrepresentation likely to occur?
a. Approach
b. Presentation and recommendations
c. Fact finding and needs analysis
d. Policy delivery and ongoing service
b. Presentation and recommendations
19. The purpose behind full disclosure requirements is to
A. help a client make an informed decision
20. Which of the following is NOT part of the home office underwriting process?
A. Applicant's analysis report
21. Which of the following is the goal of a sales presentation?
A. To educate the client so the client can make his or her own decision about what's right for him or her
22. Ethics is best described as
A. instructions on how to interact with fellow members of a group or community
23. Which of the following four steps is NOT part of a sales presentation?
A. Review the product application
24. Which of the following is an objective of the NAIC?
D. To encourage uniformity in state insurance laws and regulations
