A life insurer sells policies entirely through mailed solicitations and telephone calls with no in-person agent contact. This method of distribution is known as:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Direct response distribution sells insurance without a field agent, using mail, telephone, print, or electronic media to solicit applicants directly. The insured deals with the company and completes an application that may be processed without any personal contact. Direct response sellers must still comply with licensing, disclosure, and illustration rules, and any employees who actually negotiate contracts must be appropriately licensed. This distribution channel affects how disclosures and cancellation rights are delivered, but it does not change the fundamental nature of the insurance contract or its legal requirements.
Why the other options are wrong
- B) Captive agency uses exclusive agents selling for one insurer in person, which is the opposite of an agent-free direct response channel.
- C) Independent agency relies on agents representing multiple insurers, requiring licensed intermediaries in the field.
- D) Brokerage describes a producer placing coverage for a customer with various markets, which is a licensed intermediary model rather than direct response.
Memory hook
Direct response = no agent at the door; the mailbox and the telephone do the selling.