L&H Unit 7

To have an individual life insurance policy reinstated, a person must do all of the following EXCEPT A)agree to a new policy without another reinstatement provision B)pay any other indebtedness owed to the insurer C)provide satisfactory evidence of insurability, if required D)make back payments of premiums

A)agree to a new policy without another reinstatement provision

After Joe died, Well Life Insurance Company discovered that he had misrepresented his health status when he applied for a life insurance policy 7 years ago. The insurer A)cannot void or revoke the policy B)does not have to pay the death benefit C)can void the policy D)must prove the misrepresentation was material before voiding the policy

A)cannot void or revoke the policy

Which of the following statements is CORRECT? A)If an insuring company revises its bylaws or practices, any life insurance contract issued before the change must be modified to reflect the company's new policies. B)After a policy is delivered to and accepted by the policyowner, it cannot be changed in any way, except in accordance with terms stated in the contract. C)If a premium deposit is not paid with the application, the policy will still be valid if the applicant is acceptable to the insurer's underwriters. D)Misrepresentations made in an application are always considered grounds for voiding an insurance contract.

B)After a policy is delivered to and accepted by the policyowner, it cannot be changed in any way, except in accordance with terms stated in the contract.

Micah pays $220 annually for a $50,000 life insurance policy. The premium was due June 1. However, she forgot to send in the premium. If Micah died on June 15, how much would be paid to the beneficiary? A)$50,000 B)$49,220 C)$49,780 D)$0

C)$49,780 Since Micah died during the grace period, the policy will pay the death benefit minus the amount of past due premium.

Samiya purchased a $500,000 life policy from LHC Insurance Company at the age of 35. At her death the insurance company discovered that her primary beneficiary was older than Samiya had stated on the application. How much will Samiya's beneficiary receive? A)Nothing B)$250,000 C)$500,000 D)The full amount of the benefits, but the policyowner's estate must pay a fine

C)$500,000 Misstatement of age does not invalidate a life insurance policy. However, the misstatement of age provision only applies to situations where the insured's age is misstated. The beneficiary's age, whether misstated or not, does not affect the amount of the death benefit to be paid.

The free look, or right to examine provision allows a policyowner the right to review and then return a policy for a full refund within no less than how many days? A)45 days B)60 days C)25 days D)10 days

D)10 days

A policy's grace period is usually no more than A)45 days B)10 days C)60 days D)31 days

D)31 days

Which of the following statements about life insurance is NOT correct? A)If a policy is transferred, the new owner receives all of the rights of policy ownership. B)A policyowner must notify the insurer in writing to transfer a policy. C)Life insurance is not a personal contract between the insurer and insured. D)A policyowner must notify the beneficiary before transferring ownership.

D)A policyowner must notify the beneficiary before transferring ownership.

Jamal's agent delivers his life policy to him on February 5. Until what date can Jamal opt to return his policy and receive a full refund of the premiums paid? A)March 5 B)Jamal can do this anytime C)Jamal can return it anytime as long as he is within his grace period D)February 15

D)February 15

Who designates the beneficiary of a life insurance policy? A)The fiduciary B)The underwriter C)The insured D)The policyowner

D)The policyowner

Which provision of a life insurance policy states that "no statement shall void this policy or be used in defense of a claim under it unless contained in the application"? A)Insuring clause B)Entire contract clause C)Consideration clause D)Incontestable clause

B)Entire contract clause

A provision in a policy that expressly cites a risk that is NOT covered is known as A)an omission B)an exclusion C)an eliminated loss D)a reduction

B)an exclusion An exclusion is a policy provision that specifically restricts coverage from certain risks or otherwise limits the scope of coverage.

Alexandria assigns her $10,000 life insurance policy to a bank as collateral for a loan. The assignee is A)the beneficiary of the policy B)the bank C)Alexandria, the insured D)the insurance company

B)the bank

All of the following are required provisions of individual life insurance policies EXCEPT A)a misstatement of age provision B)waiver of premium provision C)a grace period provision D)an incontestability provision

B)waiver of premium provision A grace period, a misstatement of age provision, and an incontestability provision are all required provisions, as well as provisions for the entire contract, evidence of individual insurability, individual certificates (rather than individual policies), and assignment.

Joshua's insurance agent delivered his new term life policy to him. Three days later Joshua changed his mind—he no longer wanted the life policy and returned it to his agent. Joshua had paid the initial premium. Under the free-look provision, what is Joshua entitled to receive? A)A partial refund of the initial premium B)The policy's cash surrender value C)A full refund of the initial premium D)A credit that can be applied to the purchase of another policy

C)A full refund of the initial premium

After an individual life insurance policy has been in effect for 2 years, which of the following is grounds for cancellation? A)Implied warranties B)Material misrepresentation C)Nonpayment of premium D)Fraudulent statements

C)Nonpayment of premium The incontestability provision states that other than for nonpayment of premium, the validity of a policy may not be contested after it has been in force for 2 years.

An individual life insurance policy must contain all of the following provisions EXCEPT A)entire contract B)incontestability C)accelerated benefit D)free-look

C)accelerated benefit All individual life insurance policies must contain an entire contract provision stating that the policy and the application constitute the entire insurance contract. Policies also must provide a 10-day free-look period during which the owner may return the policy and have the premiums refunded. An incontestability provision is mandatory and states that a policy is incontestable after being in force for 2 years, except for nonpayment of premiums. An accelerated benefit provision is an optional provision that may be included in a life insurance policy.

Which is NOT a life insurance policy provision? A)endorsements B)reinstatement C)cancellation D)consideration

C)cancellation

Premium payment amounts can be all of the following EXCEPT A)graded B)level C)static D)flexible

C)static Premium payment amounts can be level, graded, flexible, or single payment.

All of the following statements regarding the insuring agreement are true EXCEPT A)the clause includes the death benefit amount B)the beneficiary is named in the insuring agreement C)the agent or producer must sign the clause D)the insuring agreement is usually found on the first page

C)the agent or producer must sign the clause An insuring clause or agreement in life insurance contains the insurer's promise to pay the death benefit to a named beneficiary. An authorized officer of the company must sign the clause, not an agent or producer.