Insurance Broker Certification Practice Exam

Which term describes insurance sold directly without agents, often through advertisements?

1. Simplified Issue Insurance

2. Direct response insurance

3. Indirect marketing insurance

4. Skip-Trace insurance

The correct answer is: Direct response insurance

The term that describes insurance sold directly without the involvement of agents, often through various advertisements or marketing channels, is direct response insurance. This model allows consumers to purchase insurance products directly from the insurer, typically via mail, phone, or online platforms. In this approach, the insurer does not rely on intermediaries or agents to facilitate the sale of policies, which can lead to lower premiums for consumers due to reduced operational costs. Advertising plays a crucial role in direct response insurance as companies rely on marketing strategies to attract potential customers and encourage them to purchase coverage directly. Other terms, such as simplified issue insurance, refer specifically to policy types that have minimal underwriting requirements, and do not inherently involve the selling method. Indirect marketing insurance might suggest sales through intermediaries, which contradicts the notion of selling directly without agents. Skip-trace insurance pertains to locating individuals, typically in the context of recovery or collections, and is not related to the selling methodology of insurance products.