Life Test II

Which of the following statements is true of both the fixed-period & fixed-amount settlement options.

Both guarantee that the principal and interest will be fully paid out

A spouse receives $5,000 a month until the principle and interest on her husband"s life insurance policy have been paid out. Which settlement option did this beneficiary choose?

Fixed amount

Which of the following features allows an insurance policy to remain in force for specific number of days beyond the premium due date?

Grace period provision

Which of the following would be considered a disadvantage of term insurance?

If the insured dies after the end of the term, there is no death benefit to the beneficiary

Under what circumstances will the contingent beneficiary receive the death benefit?

If the primary beneficiary dies before the insured

Which of the following is true about the free-look period in a life insurance policy?

It starts when a policy is delivered

Which of the following is an example of a limited-pay life policy?

Life Paid-up at Age 65

The insured usually pays $1200 annually for her insurance annually for her life insurance premium. The year, she has accumulated $175 in dividends, & applied that to her next premium, reducing it to $1025. What dividend option has the insured chosen?

Reduction of premium

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

variable

The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount?

100

Which of the following is true regarding a joint life policy?

The premium is based on the average age of the insureds

Which of the following statements is true regarding a universal life policy?

The premiums can be decreased by the insured

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of Premium

The renewable provision allows the policyowner to renew the coverage at the expiration date

Without evidence of insurability

Which of the following terms refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another?

assignment

Which of the following features of the Indexed Whole Life policy is NOT fixed?

cash value growth

An individual inherited a large sum of money at age 40 and wanted to use it to provide a guaranteed income after his retirement at age 60. Which of the following types of annuities would best meet this need?

deferred

Which of the following is NOT a standard exclusion in life insurance policies?

disability

Whose life expectancy is taken into consideration in an annuity?

Annuitant

All of the following are nonforfeiture options in life policies EXCEPT

Automatic premium loans

When the insured purchased a new home, he wanted to purchase a life insurance policy that would protect his family against losing it should he die before the mortgage was paid. Which of the following policies is best suitable for that need?

Decreasing term

Which provision of a life insurance policy states that the application is part of the contract?

Entire Contract

A life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

Incontestability clause

An annually renewable term policy

Renews each year with an increased premium

Which type of life insurance policy generates immediate cash value?

Single Premium

The time period during which an annuitant contributes to an annuity called

The accumulation period

If a life policy has an irrevocable beneficiary designation,

The beneficiary can only be changed w/ written permission of the beneficiary.

All of the following are true regarding the guaranteed insurability rider EXCEPT

it is available automatically, for no extra premium

When a death claim is submitted, the insurer discovered that the insured understated her age on the application for a life policy. What will the insurer take?

pay a reduced death benefit based on the insured's actual age

With a traditional whole life policy, the death benefit

remains constant over time