Life Insurance Policies
A lender tells a borrower the loan will be approved only if credit life insurance is purchased from it. What is the objection?
Answer and explanation
Answer: B. Tying the extension of credit to the purchase of insurance from a particular source is coercion, and the borrower must be free to decline or to buy elsewhere. Selling at the time of the loan, and by a lender-affiliated insurer, is not itself objectionable.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, credit life and coercion
More life insurance policies questions
- What does the floor in a fixed indexed life policy do?
- What does the owner of a level term policy receive if the policy reaches the end of its term without a claim?
- What does the survivor purchase option in a joint life policy commonly provide?
- What evidence of health must a member give to exercise the group conversion privilege?
- What external measure is commonly used to determine interest credits in indexed universal life?
- What form of insurance is group life cover usually written as?
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