Tennessee Life Producer Practice Exam

What essential information must be included in a Policy Summary given to an applicant after a life insurance application is completed?

1. The name of the insurance agent

2. The premium cost for basic coverage applied for

3. The insurer's contact information

4. The policy’s terms and conditions

The correct answer is: The premium cost for basic coverage applied for

The inclusion of the premium cost for basic coverage applied for in a Policy Summary is vital because it allows the applicant to understand the financial commitment associated with the insurance policy they are considering. This information helps the applicant assess whether they can afford the premium and how it fits into their overall budget and financial planning. When applicants receive a Policy Summary, they expect to see significant details that directly affect their decision-making process. Knowing the premium amount is crucial for evaluating the policy's affordability and value. It provides transparency in the insurance process, allowing applicants to make informed choices about their coverage. The other components, while important, do not directly address the fundamental understanding of the financial aspect of the insurance policy as the premium does. For instance, the name of the insurance agent, the insurer's contact information, and the policy’s terms and conditions play supportive roles but do not provide the direct monetary information necessary for the applicant's decision-making.