Insurance test

If the annuity dies during the accumulation period, who will receive the annuity benefits?

The beneficiary. If the annuitant dies during the accumulation period, the beneficiary receives benefits from the annuity; either the amount paid into the plan or the cash value- whichever is greater.

According to the entire contract provision, what document must be made part of the insurance policy?

Copy of the original application. An insurance contract must contain a copy of the original application.

What is the name of the insured who enters into a viatical settlement?

Viator. Viator means the owner of a life insurance policy who enters into or seeks to enter into a viatical settlement contract.

If an agent wishes to sell variable life policies, what license must the agent obtain?

securities. Variable products are governed in part by the Securities and Exchange Commision; therefore, agents selling variable life policies must also secure a securities license.

In insurance, an offer is usually made when

An applicant submits an application to the insurer. In insurance, the offer is usually made by the applicant in the form of the application. Acceptance takes place when an insurer's underwriter approves the application and issues a policy.

An insurance contract must contain all of the following to be considered legally binding EXCEPT

Beneficiary's consent. The four essential elements of all legal contracts are offer and acceptance; consideration; competent parties; and legal purpose.

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policy owner?

Cash surrender. Once the cash surrender value is paid, the contract is over.

an individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Guaranteed insurability option. The guaranteed insurability option allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability.

An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefits?

If the primary beneficiary predeceases the insured. The daughter, as contingent beneficiary, would need to outlive the insured and primary beneficiary.

Which part of an insurance application would contain information regarding the applicant's medical history?

Part 2- Medical information of the application includes information on the prospective insured's medical background, present health, any medical visits in recent years, medical status of living relatives, and causes of death of deceased relatives.

An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?

She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan. If a person has life insurance under a group plan and then leaves the group, he/she may convert group coverage to individual coverage within 31 days of leaving the plan without proof of insurability.

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured. A beneficiary is the person or interest to whom the policy proceeds will be paid upon the death of the insured. Beneficiaries do not have insurable interest in the policyholder.

What is the purpose of settlement options?

They determine how death proceeds will be paid. Settlement options are methods used to pay the death benefits to a beneficiary upon the insured's death, or to pay the endowment benefit if the insured lives to the endowment date.

Which of the following premium payment modes will incur the lowest overall payment?

annual. Annual premiums are the only modes of payment that do not result in service fee, so the overall payment will be lower.

If a loss occurs, insurance policies pay the proceeds to

beneficiary

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

Common Disaster. Under the Uniform simultaneous death law, Common disaster provision, the law will assume that the primary beneficiary dies first in a common disaster as long as the beneficiary dies within this specified period of time following the death of insured (usually 30 days). This provides that the proceeds will be paid to either the contingent beneficiary or the insured's estate, if no contingent beneficiary is designated.

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

For 20 years or until death, whichever occurs first. Under a 20-pay life policy, all of the premiums necessary to cause the policy to endow at the insured's age 100 are paid during the first 20 years; however, if the insured dies before all of the planned premiums are paid, the beneficiary will receive the face amount as a death benefit.