Examfx Guaranteed Exam - Focused Review (Life)

a whole life policy is surrendered for a reduced paid-up policy. The cash value in the new policy will

continue to increase

What type of interest rate is guaranteed in universal life policies?

contract interest rate

when a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

extended term

if an individual willfully violates provisions of the Fair Credit Reporting Act, what is the maximum civil penalty?

$2,500

all of the following are true of credit life

- the death benefit cannot exceed the amount of the loan payment - the premium payment is included in the loan payment the creditor is the policyowner *with credit life the lending institution is the owner and names the beneficiary

what is the maximum loan amount a policyowner may withdrawal from a variable universal life insurance policy?

an amount not exceeding the cash value

an insured and his spouse recently had a child. which of the following riders would allows the couple to insure the child for a limited period of time at a specified amount?

children's term rider - allows children to be added to coverage for a limited period of time for specified amount

Where are premiums from fixed annuities invested?

general account - a fixed annuity is characterized by a general account into which the purchase payments (premiums) are invested

which of the following is guaranteed under a variable whole life insurance policy?

minimum death benefit - variable whole life insurance contains a fixed premium and guaranteed minimum death benefit...the policy's cash value fluctuates and therefore is not guaranteed

policies written on a third party ownership basis are usually written to cover which of the following?

policyowner's minor children or business associates

all of the following are true regarding the federal Fair Credit Reporting Act except

reports may be sent to anyone who requests one - credit reports may only be ordered by those involved in insurance underwriting, bank loans, or employment, so they cannot be ordered by just anyone. If adverse action is taken, an insurer must tell the insured which credit reporting agency furnished the report, but the insurer does not have to furnish a copy of it. If a report is wrong, there are procedures to get it corrected without the need of filing a lawsuit (litigation)

level term insurance

temporary protection; it is likely renewable at certain interval; also has a max renewal age

who must sign an insurance application?

the agent and the insured - if the applicant is other than the insured then the applicant must sign. The home office underwriter does not sign the application

In which of the following scenarios will the life insurance proceeds be protected from the creditors?

when the benefits are not paid out to the insured or any person affecting the insurance