Dri 3.0

Which of the following is correct regarding credit life insurance?

It insures the life of a debtor.

In a life settlement contract, whom does the life settlement broker represent?

The owner

Which of the following best details the underwriting process for life insurance?

Selection, classification, and rating of risks

If a policyowner is dissatisfied with a life insurance policy and wishes to receive a full refund of the premium paid, he or she must return the policy to the insurer with a written notice of cancellation within

10 Days

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

Fixed amount

Life insurance death proceeds are

Generally not taxed as income.

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?

The date of medical exam

Which of the following is true regarding the master policy?

it is issued to the sponsor of the group.

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident, and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

Universal life

For what period of time is an insurance license issued in Minnesota?

24 months

Which property policy provision states that if the insurer and the insured cannot agree on the value of the property, each party may choose an independent appraiser?

Appraisal

If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to

Charge a higher premium

If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT

Erase the incorrect answer and record the correct answer.

Which of the following best describes the aleatory nature of an insurance contract?

Exchange of unequal values

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider.

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

Incontestability clause.

A Return of Premium term life policy is written as what type of term coverage?

Increasing

Which of the following settlement options in life insurance is known as straight life?

Life income

Traditional IRA contributions are tax deductible based on which of the following?

Owner's income

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?

Reinstatement provision

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

An insured's home is damaged in an earthquake. He finds out that his homeowners policy will NOT cover the loss, because earth movement is listed in his policy's

Exclusions.

Which of the following types of life insurance refers to temporary protection that only lasts for a specified period of time?

Term life

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit.

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be

Authorized.

Under the professional liability loss settlement provision, what must an insurer do before offering to pay a claimant to settle a claim?

Get the insured's consent

All of the following are personal uses of life insurance EXCEPT

Buy-sell agreement.

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

Variable Whole Life insurance is based on what type of premium?

Level fixed

The Medical Information Bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons.

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation.

Which of the following provisions states what must be included for an insurance contract to be considered complete?

Entire contract