Cassie applies for a $100,000 renewable 10-year term insurance policy through Mason, her insurance of persons representative. A month later, when Mason meets with Cassie again to deliver her contract, Cassie says she had to have a biopsy the previous week for a persistent cough. Mason tells her not to worry because the policy is already accepted. He completes the policy delivery. Six months later, Mason receives a call from Cassie's boyfriend informing him that Cassie died of stage 4 throat cancer.
How will the insurance company handle the claim?

• A.No death benefit will be paid because Cassie died within 2 years of obtaining the policy.
• B.No death benefit will be paid because Mason did not inform the insurance company of the change in Cassie's insurability.
• C.The death benefit will be paid because Cassie visited the doctor after filling out the application form.
• D.The death benefit will be paid although Mason was negligent for delivering the policy and he would be liable towards the insurer.

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Six years ago, Gerard, aged 28, purchased a life insurance policy.
Gerard just got married to Tanya, and they both want to purchase more insurance. Reviewing Gerard's policy, Tanya notices that Gerard neglected to mention that he had migraines due to concussions suffered from playing football when he was a teenager. Gerard did not intentionally neglect to mention the migraines as the migraines were never an ongoing issue once he stopped playing football.
Which statement is true?

• A.Since the policy was taken out six years ago, the insurance company would have to prove that Gerard made a fraudulent material misrepresentation, or pay the policy's death benefit.
• B.The insurance company can void the contract under the contestability clause, and nopremiums would be returned to Gerard.
• C.Gerard can admit the mistake to the insurance company to ensure they cannot void the policy due to incomplete information at time of application.
• D.Since the policy was taken out six years ago, the insurance company can void the policy under the mistake clause.

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Last week, at a dinner party, Dario, an insurance agent, met Andrew, a successful businessperson with a net worth of over $10 million. Dario spent the evening following Andrew around, telling him how he could help him manage his finances. The day after the meeting, Dario sent a fruit basket to Andrew's office. Every day since, Dario has been calling and urging Andrew to meet with him and take advantage of his services and insurance products.
Which duties and obligations did Dario break?

• A.Duties and obligations towards the public
• B.Duties and obligations towards clients
• C.Duties and obligations towards other representatives, firms, independent partnerships, insurers and financial institutions
• D.Duties and obligations towards the profession

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Samira, a 42-year-old single mother of four, owns an individual disability insurance (DI) policy. Last week, she was hospitalized because of complications from diabetes. She hired an emergency nanny to care for her children until she was healthy enough to resume her normal activities. To her relief, Samira's DI policy contains a special rider that would cover up to $250 per day for these types of expenses.
What is the name of the rider contained in Samira's policy?

• A.Residual disability benefits.
• B.Hospital indemnity rider.
• C.Cost-of-living adjustment.
• D.Childcare rider.

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Eloise has critical illness coverage through her group insurance plan at work. She is 54 years old, in excellent health, and is planning to retire soon. She meets with Sonia, her insurance agent, to plan her retirement and to make sure she will still be covered in the event of critical illness. To make sure she is not a burden on her family, Eloise would also like to receive monthly benefits in the event she is placed in an assisted living facility. What should Sonia tell her?

• A.That the critical illness coverage under her group plan is the least expensive and that the insurer will have to give her the option of converting it into individual insurance when she retires.
• B.That the critical illness coverage under her group plan will end when she retires and that she should consider purchasing individual coverage.
• C.That her critical illness coverage will end when she retires and that she should consider purchasing individual critical illness and long-term care insurance.
• D.That when she retires, she should purchase individual disability insurance, which would give herthe coverage required in the event of critical illness.

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