Florida Life and Health Insurance License Practice Test

Question: 1 / 400

As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?

Coercion

By requiring the borrower to purchase credit insurance from a specific company, the bank is engaging in coercion. This means that the bank is using its power or authority to force the borrower into purchasing a product or service that they may not necessarily need or want. It is not considered fair or ethical for a financial institution to strong-arm a borrower into making a specific purchase, as this limits their freedom of choice and can result in them paying for unnecessary expenses. Options B, C, and D are incorrect because they do not accurately describe the bank's actions in this scenario. The bank is not committing fraud, negligence, or misrepresentation by requiring the borrower to purchase a specific form of insurance.

Get further explanation with Examzify DeepDiveBeta

Fraud

Negligence

Misrepresentation

Next Question

Report this question

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy