Massachusetts Life Producer Practice Exam

What is a life insurance producer authorized to do?

1. Set premium rates

2. Solicit, receive, and forward applications to the insurer

3. Provide legal advice to clients

4. Invest policyholder funds

The correct answer is: Solicit, receive, and forward applications to the insurer

A life insurance producer is primarily responsible for interacting with clients, which includes soliciting potential policyholders, receiving their applications, and forwarding these applications to the insurance company for processing. This role is crucial in the insurance distribution process, as producers act as intermediaries between the insurer and the client, helping individuals understand their options and the various policies available. Producers typically do not set premium rates since this task is usually within the purview of the insurance company based on their underwriting guidelines. While producers may offer some general information about policies, providing legal advice is not within their scope of practice and requires a legal background. Additionally, investment of policyholder funds is a function typically handled by the insurer or a licensed investment advisor, not by the insurance producer. Therefore, the correct understanding of a life insurance producer's role clearly points to their function in managing applications and connecting clients to the insurance provider.