Life Insurance

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

$100,000

Before the Commissioner will issue a broker's license, the licensee must obtain a bond for at least

$15,000

Insurance companies are required to provide proof of loss forms to the claimant within how many days after receipt of notice of loss?

15

Within how many months must a person be expected to die from a sickness in order to be classified as terminally ill?

24

A licensee who ceases to maintain residency in North Carolina is required to deliver any insurance licenses to the Commissioner by mail or in person within how many days after terminating residency?

30

The death protection component of Universal Life Insurance is always?

Annually Renewable Term

Annually Renewable Term?

Annually renewable term is the purest form of term insurance. The death benefit remains level, but the premium increases each year with the insured's attained age

Which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy. Buy-sell agreements tell you what will happen with the business if one of the owners dies

An agent selling variable annuities must be registered with

FINRA because variable annuities are considered a security

When an employee terminates coverage under a group insurance policy, coverage continues in force

For 31 days.

When an insurer requires a written proof of loss after notice of such loss has been given by the insured or beneficiary, the company must

Furnish a blank form to be used for that purpose.

Waiver of premium

If the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age, such as 21

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection.

Which of the following settlement options in life insurance is known as straight life?

Life income

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

Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident, and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit due to the incontestability clause of 2 years

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor Benefit

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up, provides till insured reaches 100

If the applicant has not fully met the requirements for licensing, the Commissioner will

Refuse to issue the license and notify the applicant in writing.

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

The benefit is received tax free.

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy.

What describe a person, other than a viator, that enters into or effectuates a viatical settlement contract?

Viatical settlement provider

What can a policy owner change in an Adjustable Life policy?

increasing or decreasing the premium; changing the premium-paying period; increasing or decreasing the face amount of coverage; or changing the period of protection.

The cash value of a variable life policy?

is not guaranteed and fluctuates with the performance of the portfolio in which the premiums have been invested by the insurer.

When would a premium be tax deductible?

only group plans are tax deductible as a business expense

Universal Life Option A (Level Death Benefit option)

policy must maintain a specified "corridor" or gap between the cash value and the death benefit, as required by the IRS. If this corridor is not maintained, the policy is no longer defined as life insurance for tax purposes, and consequently loses most of the tax advantages that have been associated with life insurance.

What is life income (straight life)?

provides the recipient with an income that he or she cannot outlive. It pays the benefit while the beneficiary is alive; however, the payments stop at the beneficiary's death.

An unfair trade practice.

to make any statement that an insurer's policies are guaranteed by the existence of the Life and Health Guaranty Association.