Life Insurance Review

Insurable-interest

Stranger-originated Life insurance policies are in direct opposition to the principle of

Regulates consumer reports

The Federal Fair Credit Reporting Act

Stock

Which of the following insurers are owned by stockholders who have the usual rights of ownership, including right of voting?

A level annual premium for the life of the insured

A Straight life policy has what type of premium?

Fixed-period installments

All of the following are dividend options EXCEPT

A group needing low cost life insurance

All of the following could own group life insurance EXCEPT

Lower

All other factors being equal, what would the premium be like in a survivorhship life policy as compare to the premium in a joint life policy?

Term

Children's riders attached to a whole life policies are usually issued as what type of Insurance?

With the policy

If a policy includes a free-look period of at least 10 days, the Buyer's Guide must be delivered to the applicant

Upon the last death

In a survivorship policy, when does the insurer pay the death benefit?

Gradually increases each year by the amount that the cash value increases.

The death benefit under Universal Life Option B

An index like Standard & Poor's 500.

The equity in an equity index annuity is linked to

Whole Life

Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit?

Admitted

Which of the following is the closest term to an authorized insurer?

Universal Life - Option A

Which of the following polices would have an IRS required corridor or gap between the cash value and the death benefit?

Annuity period

this period may last for the time during which accumulated money is converted into an income stream. It may last for the lifetime of the annuitant or for a shorter period of time depending on the benefit

Increasing

A return of premium term life policy is written as what type of coverage?

False Advertising

Am insurance company has published a brochure that inaccurately portrays the advantages of a particular insrurance policy. What is this an example of?

As of the application date

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

Interest Only Option

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. What settlement option should the policyowner choose?

Limited Pay Whole Life (premium payments cease at her age of 65, but coverage will continue to her death or age 100.

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

60 days

a paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within ___ days after the due date of the premium in default.

Immediate annuity

a type of annuity where distributions starts within 1 year of purchase

seek higher returns (they are not securities, but they invest on a relatively aggressive basis to aim for higher returns)

Equity indexed annuities

Settlement option

If an immediate annuity is purchased with the face amount at death or with the cash value of surrender, this would be considered a

5

In order to qualify for conversion from a group policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?

FINRA

An agent selling variable annuities must be registered with

The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy.

An applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day, which of the following is true?

$100,000 (in joint life policies, the death benefit is paid upon the first death only)

An individual purchased a $100,000 JOINT LIFE POLICY on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

Universal Life (universal life policies allow policyholders to withdraw a limited portion of the policy's cash value. Each withdrawal, however is usually charge and the amount and frequency of withdrawals are usually limited.

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

6 months

What is the waiting period on a Waiver of premium rider?

When the insured reaches age 100. "A limited-pay whole life policy, just like straight-life, endows for the face amount if the insured lives to age 100. The premium is, however, completely paid off in 20 years."

When would a 20-pay whole life policy endow?

It is level term insurance

Which of the following best describes annually renewable term insurance?

Target Premium

is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime. (Helps prevent policies from lapsing)

Return of Premium

is an increasing term insurance policy that pays an additional death benefit to the beneficiary to the amount of the premiums paid.

Annually Renewable Term policy with a cash value account. (A universal life policy has two components: an insurance component and a cash account. The insurance component (or the death protection) of universal life policy is always annual renewable term insurance.

A universal Life insurance policy is best described as a/an

12 months

If an insurance producer allows his license to lapse, within how many months of the due date of the continuation fee may the producer reinstate the license without having to pass the exam?

The state

The regulation of the insurance industry primarily rests with

The beneficiary

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

False Financial Statement

When an insurance agency published an advertising brochure, it emphasized the company's financial stablity and sound business practices. In reality, its financial health is terrible, the company will soon file for bankruptcy. Which of the following terms best describes the advertisement?

An employee of an insurer who receives commissions only a few policies a year

Which of the following would be required to hold a license as an insurance producer?

The benefit is received tax free

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

Option B

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Face amount

Which policy component decreases in decreasing term insurance?

The insurance company

Who bears all of the investment risk in a fixed annuity?

Policyholders

Who might receive dividends from a mutual insurer?

Increases Annually

Annually renewable term policies provide a level death benefit for a premium that

To settle the insurance company's liability

What is the purpose of a fixed-period settlement option?

Flexible premium (Variable universal life, like universal life itself, has a flexible premium that can be increased or decreased as the policyholder chooses, so long as there is enough value in the policy to fund the death benefit.)

Both universal life and Variable life have a

The full death benefit

A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy?

Misreprentation

During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes