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CT Life & Health practice questions

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Question 1Insurance Regulation

Who appoints the Connecticut Insurance Commissioner?

  1. The state Senate by majority vote
  2. An advisory board of admitted insurers
  3. The Governor Correct answer.
  4. The National Association of Insurance Commissioners

Explanation

The Commissioner heads the Connecticut Insurance Department and is a gubernatorial appointee who administers and enforces the state's insurance laws. The NAIC is a voluntary association of regulators that drafts model laws but has no appointment power.

Question 2Insurance Regulation

The McCarran-Ferguson Act establishes which principle for the business of insurance?

  1. Insurance is regulated exclusively by federal agencies
  2. Insurers are exempt from all antitrust laws under all circumstances
  3. NAIC model laws automatically supersede state statutes
  4. The states retain primary authority to regulate the business of insurance Correct answer.

Explanation

Enacted in 1945, McCarran-Ferguson confirmed that continued state regulation of insurance serves the public interest, so states remain the primary regulators. Federal antitrust law still applies to acts of boycott, coercion, and intimidation.

Question 3Insurance Regulation

A producer collects premiums from clients and holds them pending remittance to the insurer. In that role the producer acts as:

  1. An agent of the policyholder only
  2. A trustee of a charitable trust
  3. A guarantor of the insurer's solvency
  4. A fiduciary Correct answer.

Explanation

Premiums collected by a producer are held in trust for the insurer, and the producer owes a fiduciary duty to handle and remit them properly. Commingling premium funds with personal or general business funds is prohibited.

Question 4Insurance Regulation

A producer offers a prospect a share of the commission if the prospect buys a policy. This practice is best identified as:

  1. Misrepresentation
  2. Twisting
  3. Coercion
  4. Rebating Correct answer.

Explanation

Rebating is the offer of any inducement not specified in the policy, such as a commission split or a gift of value, to persuade someone to buy. Connecticut prohibits rebating because it gives certain buyers an unfair price advantage.

Question 5Insurance Regulation

An insurer that holds a certificate of authority from the Connecticut Insurance Commissioner is properly described as:

  1. A surplus lines insurer
  2. An admitted insurer Correct answer.
  3. A foreign insurer because it operates in Connecticut
  4. An alien insurer

Explanation

An insurer authorized by the Commissioner to transact insurance in Connecticut is an admitted (authorized) insurer. Domicile terms are separate: domestic means chartered in Connecticut, foreign means chartered in another state, and alien means chartered outside the United States.

Question 6Insurance Regulation

Connecticut's continuing education requirement for licensed life and health producers is:

  1. 24 credit hours every two years, including ethics Correct answer.
  2. 40 credit hours every four years
  3. 12 credit hours every year with no ethics component
  4. No continuing education once a producer has been licensed ten years

Explanation

Connecticut requires producers to complete 24 continuing education credit hours during each two-year licensing period, with a portion devoted to ethics. The obligation continues for the entire career and is verified at renewal.

Question 7Insurance Regulation

Before a producer may solicit business for an insurer in Connecticut, the insurer must generally:

  1. Publish notice of the appointment in a local newspaper
  2. Wait until the producer's first sale before notifying the Department
  3. File a notice of appointment with the Commissioner Correct answer.
  4. Obtain approval of the appointment from the NAIC

Explanation

An appointment is the insurer's formal authorization for a producer to act on its behalf, and the insurer must file it with the Insurance Commissioner along with any required fee. A producer should not solicit for that insurer until the appointment is in place.

Question 8Insurance Regulation

A producer falsely tells a client that her current whole life policy 'has no cash value and will lapse next month' so that she will surrender it and buy a new policy. This conduct is:

  1. Rebating
  2. Defamation
  3. Twisting Correct answer.
  4. Coercion

Explanation

Twisting is a misrepresentation or incomplete comparison used to induce a policyholder to lapse, surrender, or replace existing coverage. It is an unfair trade practice because the replacement decision is based on false information.

Question 9Insurance Regulation

The free-look provision required in a newly delivered individual life insurance policy allows the owner to:

  1. Recover only the policy fee, not the premium paid
  2. Cancel only if the producer misrepresented the policy
  3. Return the policy any time before the first death claim is filed
  4. Return the policy within the stated free-look period for a full refund of premium Correct answer.

Explanation

The right to examine the policy gives the owner a set period after delivery (commonly ten days, as shown on the policy) to return it for a full premium refund. The refund is not conditioned on any misconduct by the producer.

Question 10Insurance Regulation

The Connecticut Life and Health Insurance Guaranty Association responds to the insolvency of a member insurer by paying covered claims that are:

  1. Limited by statutory caps per insured life Correct answer.
  2. Available only for policies written by surplus lines insurers
  3. Unlimited for all life and health policies
  4. Funded by appropriations from the state treasury

Explanation

The guaranty association is funded by assessments on member insurers and pays covered claims up to statutory limits, such as $300,000 for a life death benefit and $100,000 for cash surrender value. It is a safety net of last resort, not a guarantee of the full contract value.

Question 11Insurance Regulation

Before the Commissioner may revoke a producer's license, the producer is entitled to:

  1. A jury trial in superior court on the charges
  2. Notice of the charges and an opportunity for a hearing Correct answer.
  3. An automatic stay of the order pending review by the NAIC
  4. Compensation for commissions lost during the proceeding

Explanation

Licensing actions require due process: the producer must receive written notice of the grounds and a hearing before the Commissioner, with judicial review available afterward. The hearing is an administrative proceeding, not a jury trial.

Question 12Insurance Regulation

A producer who holds a resident license in good standing in another state wants to write Connecticut business. The producer will typically:

  1. Be required to open a business office in Connecticut
  2. Obtain a nonresident license without re-examination under reciprocity Correct answer.
  3. Practice under a 90-day temporary license without applying
  4. Be required to retake the Connecticut licensing examination

Explanation

Connecticut grants nonresident licenses on a reciprocal basis, so a producer licensed and in good standing in a reciprocal home state is generally not re-examined. A nonresident application and fee are still required before any solicitation.

Question 13Insurance Regulation

An insurer charges two applicants who fall in the same actuarial class different premium rates solely because of their national origin. This rating practice is:

  1. Permissible if the insurer's underwriter approves it
  2. Allowable if the difference is disclosed in the policy
  3. Lawful because premium rates are set by market forces
  4. Unfair discrimination prohibited by insurance law Correct answer.

Explanation

Rates must be based on actuarial classification factors related to expected loss, and distinguishing among like risks on protected characteristics such as national origin is unfair discrimination. Disclosure or internal approval does not cure the violation.

Question 14Insurance Regulation

An insurer may lawfully pay a commission on a Connecticut life insurance sale to:

  1. An unlicensed bank employee whose branch is in Connecticut
  2. An unlicensed office assistant who gathered the application details
  3. The policyholder as a thank-you for referring a friend
  4. A producer properly licensed and appointed for that line Correct answer.

Explanation

Commissions for soliciting insurance may be paid only to persons licensed and appointed for that line of authority. Paying an unlicensed person is both unlicensed activity and, when it benefits the buyer, a prohibited inducement.

Question 15Insurance Regulation

Under federal and Connecticut privacy rules, an insurer that wants to share a customer's nonpublic personal financial information with an unrelated marketing firm must generally provide:

  1. A court order authorizing the disclosure
  2. Prior approval from the Commissioner for each mailing
  3. A disclosed opt-out opportunity before the sharing occurs Correct answer.
  4. Nothing, because insurance is exempt from privacy laws

Explanation

Privacy notices must describe an insurer's information-sharing practices, and sharing nonpublic personal financial information with nonaffiliated third parties generally requires a clear, disclosed opt-out (with opt-in consent for certain health information). The requirement comes from federal law as implemented by state regulation.

Question 16Insurance Regulation

Which of the following is an unfair claim settlement practice under Connecticut law?

  1. Requesting a copy of the death certificate before paying a claim
  2. Failing to acknowledge a claim promptly and act in good faith Correct answer.
  3. Denying a claim after a reasonable investigation of the facts
  4. Paying a valid claim within the period required by statute

Explanation

Unfair claim practices include failing to acknowledge communications promptly, failing to investigate reasonably, and refusing to pay without a reasonable basis. Requesting proof of loss, investigating, and paying valid claims promptly are proper activities.

Question 17Insurance Regulation

A producer recommends that a client replace an existing life policy with a new one. Connecticut replacement rules require the producer to:

  1. Say nothing about the replacement because the choice belongs to the client
  2. Provide a signed replacement notice and comparison to the replacing insurer Correct answer.
  3. Obtain the Commissioner's prior approval of the replacement
  4. Complete replacement paperwork only when the new policy is larger

Explanation

Replacement regulations require a signed notice regarding replacement and a comparison of the policies, with copies sent to the replacing insurer, which in turn notifies the existing insurer. This gives the existing insurer and the client a chance to evaluate the impact of the replacement.

Question 18Insurance Regulation

During a market conduct examination of an admitted insurer, the Connecticut Insurance Department may:

  1. Examine domestic insurers only, never foreign or alien insurers
  2. Seize the insurer's assets without any hearing or court order
  3. Review only complaints filed in the previous twelve months
  4. Examine books and records and charge the insurer for the exam Correct answer.

Explanation

Market conduct examinations review an insurer's sales, underwriting, and claims practices through its records and personnel, and the examined insurer generally bears the cost. The authority extends to every insurer licensed to do business in the state.

Question 19Insurance Regulation

A producer maintains a separate account for client premiums. Which practice complies with Connecticut law?

  1. Holding premiums indefinitely as security for possible chargebacks
  2. Keeping premiums in a separate fiduciary account and remitting them promptly Correct answer.
  3. Depositing premiums into the producer's personal checking account to simplify accounting
  4. Borrowing premium funds to cover agency payroll, then repaying them later

Explanation

Premiums held for an insurer are trust funds that must be segregated from the producer's own money and remitted as the agreement with the insurer requires. Commingling or diverting those funds is a breach of fiduciary duty and grounds for license action.

Question 20Insurance Regulation

An insurer suspects that an applicant submitted forged income documents to obtain a large life policy. The insurer's best course under Connecticut law is to:

  1. Rescind the policy and keep all premiums without notifying the policyholder
  2. Report the suspected fraud to the Department's fraud unit for investigation Correct answer.
  3. Take no action because insurance fraud is exclusively a federal matter
  4. Circulate the applicant's name to other insurers as a warning

Explanation

Connecticut maintains an insurance fraud bureau within the Insurance Department that receives reports, investigates, and can refer cases for criminal prosecution. Insurers and producers are expected to cooperate in reporting suspected fraudulent applications and claims.

Question 21General Insurance Concepts

A business owner pays an annual premium to an insurance company in exchange for the insurer's promise to pay covered losses. Which risk-handling technique does this illustrate?

  1. Risk retention
  2. Loss reduction
  3. Risk avoidance
  4. Risk transfer Correct answer.

Explanation

Insurance is a risk-transfer mechanism: the insured pays a premium so that the financial consequences of a covered loss shift to the insurer. Retaining, avoiding, or reducing risk are separate techniques the owner would use without an insurer.

Question 22General Insurance Concepts

At what point must insurable interest exist for a life insurance policy to be valid?

  1. At the time the application is made Correct answer.
  2. Both at application and at the insured's death
  3. At the time of the insured's death
  4. Insurable interest is not required for life insurance

Explanation

For life insurance, insurable interest must exist when the policy is applied for, which prevents the purchase of coverage on a stranger as a wagering contract. Once the contract is in force, the interest need not continue, so a later divorce or job change does not invalidate the policy.

Question 23General Insurance Concepts

The principle of indemnity in property-liability insurance is best described as which of the following?

  1. Restoring the insured to approximately the same financial position held before the loss Correct answer.
  2. Requiring the insured to share every loss equally with the insurer
  3. Guaranteeing payment of the full policy limit for every covered loss
  4. Allowing the insured to profit when a loss is smaller than expected

Explanation

Indemnity means the insured is made whole financially, no better and no worse off, after a covered loss. This is why actual cash value, repair cost, and policy limits constrain recovery rather than a fixed benefit.

Question 24General Insurance Concepts

Which of the following best describes a pure risk?

  1. A situation offering both the chance of loss and the chance of gain
  2. A situation offering only the chance of loss or no loss Correct answer.
  3. A situation offering only the chance of gain with no chance of loss
  4. The uncertainty surrounding whether a profit will be earned

Explanation

Pure risks involve only loss or no loss, with no possibility of gain, which is why they are the traditional subject of insurance. Speculative risks, which include the chance of gain, are generally not insurable.

Question 25General Insurance Concepts

Which of the following is an example of a moral hazard?

  1. A policyholder completes a smoking-cessation program
  2. An insured deliberately burns an insured building to collect the policy proceeds Correct answer.
  3. A homeowner installs a monitored burglar alarm
  4. An applicant reports a family history of heart disease

Explanation

Moral hazard is a dishonest tendency or character trait that increases the likelihood or size of a loss, such as intentionally causing a loss to collect benefits. Honest preventive steps and accurate disclosures reduce rather than create moral hazard.

Question 26General Insurance Concepts

The law of large numbers allows an insurer to predict losses more accurately when it does which of the following?

  1. Insures a large number of similar, independent exposure units Correct answer.
  2. Raises premiums each year regardless of loss experience
  3. Reinsures only its most profitable policies
  4. Concentrates its business in a single geographic area

Explanation

As the number of similar, independent exposure units grows, actual loss experience tends to approach the loss experience the insurer predicted. This predictability is what allows insurers to set rates and maintain solvency.

Question 27General Insurance Concepts

In insurance underwriting, a representation is best described as which of the following?

  1. An intentional failure to disclose a fact the insurer would consider material
  2. A written promise added to the policy that must be strictly performed
  3. A guarantee that a stated fact is absolutely true in every respect
  4. A statement made by the applicant that is believed to be true to the best of the applicant's knowledge Correct answer.

Explanation

A representation is a statement of fact on the application that the applicant believes to be true and complete to the best of their knowledge. A warranty, by contrast, is a promise that a fact is literally true, and a material misrepresentation can give the insurer grounds to rescind.

Question 28General Insurance Concepts

An insurance policy is generally classified as a contract of adhesion because:

  1. Both parties negotiate the wording of every clause together
  2. Coverage depends on the insured's compliance with conditions
  3. Only the insured makes an enforceable promise
  4. The insurer drafts the terms and the insured accepts or rejects them as written Correct answer.

Explanation

In a contract of adhesion, one party writes the terms and the other party adheres to them, so ambiguities are generally construed against the drafter. This unequal bargaining position is the reason courts apply that interpretive rule.

Question 29General Insurance Concepts

The fact that the premium paid may be far smaller than the benefit ultimately received reflects which characteristic of an insurance contract?

  1. Aleatory Correct answer.
  2. Adhesion
  3. Conditional
  4. Unilateral

Explanation

An aleatory contract depends on chance, so the values exchanged may be unequal, as when a small premium produces a very large benefit. The other characteristics describe promises, conditions, or drafting rather than the exchange of unequal values.

Question 30General Insurance Concepts

An applicant asks a producer whether a particular rider is included in a policy. The producer has no actual authority to add the rider, but the insurer previously allowed this producer to bind similar riders and the applicant relies on that. The producer's power in this case is:

  1. No authority of any kind
  2. Implied authority
  3. Express authority
  4. Apparent authority Correct answer.

Explanation

Apparent authority arises when the insurer's conduct leads a third party to reasonably believe the producer has authority, even if the insurer did not grant it. The insurer may be bound by the producer's acts to protect the reasonable reliance of the applicant.

Question 31General Insurance Concepts

A producer collects a client's premium and deposits it into the producer's personal checking account. This conduct is best identified as:

  1. Coercion
  2. Commingling Correct answer.
  3. Twisting
  4. Rebating

Explanation

Premiums are held in a fiduciary capacity and must be kept separate from personal funds; mixing them is commingling and is prohibited. The producer must account for and remit those funds to the insurer as required.

Question 32General Insurance Concepts

A producer offers to give a prospective client half of the commission earned on a new policy if the client buys today. This practice is called:

  1. Rebating Correct answer.
  2. Defamation
  3. Coercion
  4. Twisting

Explanation

Rebating is offering any inducement not stated in the policy, such as a share of commission, to persuade a person to buy insurance. It is illegal in most states because it results in unfair discrimination among similar buyers.

Question 33General Insurance Concepts

An insurer discovers that an insured breached a policy condition but continues to accept premiums without enforcing the condition. The insured may be protected from a later denial of coverage by:

  1. The coinsurance clause
  2. The contract of adhesion
  3. Waiver and estoppel Correct answer.
  4. The principle of subrogation

Explanation

By knowingly giving up a known right the insurer waives that right, and estoppel prevents the insurer from later asserting it to the insured's detriment. Courts apply both doctrines to prevent unfair surprise after the insurer's conduct induced reliance.

Question 34General Insurance Concepts

An insurer's underwriting guidelines must account for the tendency of people with a higher-than-average chance of loss to seek out insurance more eagerly than average risks. This tendency is known as:

  1. Adverse selection Correct answer.
  2. Risk retention
  3. Speculative risk
  4. Moral hazard

Explanation

Adverse selection is the tendency of poorer-than-average risks to apply for coverage, which would push claims above the level the rates assume. Underwriting, exclusions, and waiting periods exist largely to control that tendency.

Question 35General Insurance Concepts

An insurer accepts a large group of life insurance risks and then contracts with a second insurer to assume a portion of that risk. This arrangement is called:

  1. Reinsurance Correct answer.
  2. Self-insurance
  3. Coinsurance
  4. Risk pooling

Explanation

Reinsurance is insurance for insurers: the ceding insurer transfers part of its risk to a reinsurer in exchange for part of the premium. It improves capacity and solvency protection without changing the original insured's contract.

Question 36General Insurance Concepts

A policyholder can be held legally liable for failing to pay premiums only if the policy is still in force, while the insurer is bound to pay all covered claims once premiums are paid. This reflects which characteristic of an insurance contract?

  1. Conditional
  2. Unilateral Correct answer.
  3. Aleatory
  4. Adhesion

Explanation

A unilateral contract binds only one party to make an enforceable promise; in insurance, the insurer promises to pay, while the insured makes a conditional promise to pay premiums that is not legally enforceable against the insured. The insured's nonpayment simply ends coverage rather than creating liability.

Question 37General Insurance Concepts

The McCarran-Ferguson Act of 1945 established which of the following with respect to insurance regulation?

  1. Primary regulation of insurance is left to the states, and federal antitrust law applies only to the extent states do not regulate Correct answer.
  2. Insurers are exempt from both state regulation and federal antitrust law in all circumstances
  3. The NAIC may issue regulations that supersede state insurance statutes
  4. Insurance is regulated exclusively by the federal government, and states may not license insurers

Explanation

McCarran-Ferguson confirmed that the states regulate the business of insurance and that federal antitrust statutes apply only where state law does not regulate the conduct. It is the legal foundation for the state-based regulatory system insurers operate under today.

Question 38General Insurance Concepts

Which statement about state life and health insurance guaranty associations is most accurate?

  1. They are funded by the federal government to cover any shortfall in policyholder benefits
  2. They reimburse producers for unpaid commissions when an insurer becomes insolvent
  3. They guarantee full payment of all policy benefits regardless of the stated limit
  4. They provide limited protection to policyholders of an insolvent insurer, subject to statutory limits Correct answer.

Explanation

Guaranty associations are state-created safety nets that pay a limited amount of covered claims when an admitted insurer fails, up to statutory caps. They are funded by assessments on insurers, not by taxpayers, and they do not cover every benefit or claim.

Question 39General Insurance Concepts

An applicant for life insurance knowingly omits two recent hospitalizations from the application, and the insurer would have declined coverage had it known. Under general insurance principles, this omission is:

  1. A warranty that voids the policy only if the applicant signed the application
  2. Concealment, which may entitle the insurer to rescind the contract if the fact is material Correct answer.
  3. An immaterial omission because the insurer should have ordered medical records
  4. A representation that the insurer must accept as true

Explanation

Concealment is the intentional withholding of a fact that is material to the insurer's decision, and it gives the insurer grounds to rescind the contract. Materiality is judged by whether the insurer would have acted differently had it known the fact.

Question 40General Insurance Concepts

In an insurance contract, the insured's consideration consists of which of the following?

  1. The insurer's promise to pay covered claims
  2. The promise to comply with policy conditions only
  3. The premium payment only
  4. Payment of the premium plus the statements made in the application Correct answer.

Explanation

Each party gives consideration: the insurer gives its promise to pay covered claims, and the insured gives the premium together with the statements in the application, which become part of the contract. That is why material misstatements in the application can affect the contract.

Question 41Life Insurance Basics

Which type of risk is life insurance primarily designed to address?

  1. The risk of rising interest rates
  2. The risk of outliving one's savings
  3. The risk of dying too soon Correct answer.
  4. The risk of a decline in investment values

Explanation

Life insurance offsets the financial loss created when a person dies prematurely; premature death is a pure risk because it can produce only loss, never gain. Speculative and market risks are not pooled this way.

Question 42Life Insurance Basics

A life insurance policy is best described as a contract of adhesion because it is which of the following?

  1. A contract that becomes enforceable only after the first claim is filed
  2. A contract in which both parties bargain over every term before signing
  3. A contract in which the value exchanged is unequal between the parties
  4. A contract drafted by one party and accepted as written by the other Correct answer.

Explanation

The insurer writes all policy terms and the applicant may only accept or reject them, which is the essence of adhesion. Because the insured has no bargaining power, ambiguous wording is construed in the insured's favor.

Question 43Life Insurance Basics

How is the face amount of a life insurance policy best described?

  1. The premium charged each year for coverage
  2. The death benefit stated on the policy Correct answer.
  3. The sum of all premiums projected over the policy's life
  4. The cash value available if the policy is surrendered

Explanation

The face amount is the death benefit shown on the policy, payable to the beneficiary when the insured dies. It is distinct from premiums, cash value, and total premiums paid.

Question 44Life Insurance Basics

A revocable beneficiary designation allows the policyowner to take which action?

  1. Change the beneficiary only if the current beneficiary consents in writing
  2. Never change the beneficiary unless the insurer approves in writing first
  3. Change the beneficiary only after the policy has been in force two years
  4. Change the beneficiary at any time without consent Correct answer.

Explanation

A revocable designation gives the beneficiary no vested interest, so the owner may substitute another beneficiary freely and without notice. Only an irrevocable designation requires the beneficiary's consent to a change.

Question 45Life Insurance Basics

Under the grace period provision of an individual life policy, how long does coverage continue after a missed premium due date?

  1. 31 days Correct answer.
  2. 60 days
  3. 10 days
  4. 90 days

Explanation

Individual life policies provide a grace period of 31 days after the premium due date, during which the policy stays in force. Any overdue premium may be deducted from a claim paid during that period.

Question 46Life Insurance Basics

In a mutual life insurance company, who owns the company and receives dividends?

  1. Agents, who receive dividends in place of commissions
  2. The board of directors, who distribute surplus to officers
  3. Stockholders, who share in company profits
  4. Policyowners, who share in divisible surplus Correct answer.

Explanation

A mutual insurer is owned by its policyowners, and dividends are a distribution of divisible surplus, generally treated as a return of premium. Stock insurers, by contrast, are owned by shareholders.

Question 47Life Insurance Basics

Insurable interest in a life insurance policy must exist at which point?

  1. Only if the beneficiary is a close family member of the insured
  2. Continuously from application through the date of death
  3. Only at the time of the insured's death
  4. At the time the policy is applied for and issued Correct answer.

Explanation

Insurable interest must exist when the contract is formed, meaning at application and issue. Once the policy is validly in force it continues to pay even if the relationship later ends.

Question 48Life Insurance Basics

What is the primary purpose of life insurance underwriting?

  1. To protect the insurer against adverse selection Correct answer.
  2. To determine the beneficiary's tax liability at death
  3. To set agent commission levels for each policy sold
  4. To guarantee that every applicant is issued coverage

Explanation

Underwriting classifies applicants by risk so the premium charged matches expected claims. Without it, applicants likely to die soon would buy the largest amounts of coverage, an adverse selection that would raise costs for all policyowners.

Question 49Life Insurance Basics

Which element of the gross premium is based on the probability of death at each age?

  1. The persistency factor
  2. The mortality factor Correct answer.
  3. The expense factor
  4. The interest factor

Explanation

The mortality factor reflects the likelihood of death at a given age, usually derived from a mortality table. Interest and expense assumptions are separate components added to build the gross premium.

Question 50Life Insurance Basics

Compared with paying premiums annually, paying monthly generally produces which result?

  1. A higher total annual outlay because of added handling costs Correct answer.
  2. A lower total outlay because fewer payments are collected
  3. A lower total annual outlay because payments begin sooner
  4. An identical total outlay spread across twelve equal payments

Explanation

More frequent modes add administrative cost and reduce the interest the insurer earns on prepaid premium, so the yearly total rises. Each individual monthly payment is smaller, but the sum of payments is larger.