Montana State Life Insurance Practice Exam 2025 - Free Life Insurance Practice Questions and Study Guide

Question: 1 / 400

TRUE or FALSE: The amount charged to a debtor for any credit life insurance may exceed the premiums charged by the insurer.

TRUE

FALSE

The statement is false because the amount charged to a debtor for credit life insurance must not exceed the premiums charged by the insurer. Premiums for credit life insurance are regulated to ensure that the costs remain transparent and fair. The regulation is designed to protect consumers from excessive charges that could arise from administrative fees or other factors that do not reflect the insurer's actual premium costs.

This ensures that the debtor pays a price that is reflective of the insurance product being provided, allowing for a clear understanding of the costs involved and preventing the potential for exploitation. Therefore, it is essential that the premiums charged align closely with the insurer's actual costs for underwriting and managing the credit life insurance policy.

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It depends on the insurance provider

There is no set rule

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