Life Insurance Basics quiz study set
What is the maximum amount of coverage that the Utah Life and Health Insurance Guaranty Association (ULHIGA) will pay?
$500,000
Replacing insurers that use producers must provide applicants with the right to return their policy within a few days of its delivery. How many days?
30
An underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require?
Attending physician statement
Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?
Insurance Guaranty Association
Which of the following best describes the MIB?
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
What is the purpose of the buyer's guide?
To allow the consumer to compare the costs of different policies
what is the purpose of key person insurance?
To lessen the risk of financial loss because of the death of a key employee
Are insurance company underwriters allowed to discriminate?
Yes, but not unfairly
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called
an executive bonus
To which of the following policies would the State regulations on illustrations NOT apply?
an individual variable life policy
what is the time period called during which the surviving spouse of the insured does not receive Social Security income benefits?
blackout period
all of the following are personal uses of life insurance EXCEPT
buy-sell agreement
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
A key person insurance policy can pay for which of the following?
costs of training a replacement
which of the following is NOT an example of a valid insurable interest?
debtor in the life off the creditor
WHich is usually true of a participating life insurance policy?
it pays dividends to policyowners
What term means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?
life expectancy
WHich of the following would be the best option that would help the surviving spouse of the insured to put her child through daycare after the insured's death?
life insurance proceeds
An applicant wants to buy a policy that has a cash value element. Which type should she buy?
permanent
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?
predicted needs of the family after the insured's death
which of the following will be included in a policy summary?
premium amounts and surrender values
Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?
premiums are not tax deductible as a business expense
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
signed waiver of premium
WHich of the following may NOT be included in an insurance company's advertisement?
that its policies are covered by a state Guaranty Association
IN a life settlement contract, whom does the life settlement broker represent?
the owner
How must a replacing producer respond to an applicant wishing to replace existing life insurance?
the producer must provide the applicant with a Notice Regarding Replacement
Which of the following statements regarding deferred compensation funds is INCORRECT?
they are usually qualified plans
Which of the following is the best reason to purchase life insurance rather than an annuity?
to create an estate