Ch 6

An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds

$50,000

When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments?

Spendthrift provision

How will a life insurance beneficiary designation naming a spouse be changed by divorce?

The beneficiary designation will be voided.

An employer offers group life insurance to its employees for the amount of $10,000. Which of the following is true?

The cost of coverage is a deductible expense by the employer

If an employee is accepted into a group insurance plan, which status will the employee have?

certificate holder

An insured received a new life insurance policy 5 days ago, but after a closer inspection of the policy provisions, decided to return it to the insurer. What provision would allow the insured to return the policy for a full premium refund?

free look

What kind of policy issues certificates of insurance to insureds?

group insurance

Which term describes the benefits of a life insurance policy that the policyowner does not automatically relinquish even if the policy lapses?

nonforfeiture values

Under a group plan, Certificates of Insurance must include all of the following EXCEPT

the name of the writing agent

An agent delivers a life insurance policy to the proposed insured. The insured makes a decision not to accept the policy. The insured may return the policy for a full refund of premium within how many days?

14

How long must insurers maintain records of the information collected from senior consumers and other information used in making recommendations that were the basis for insurance transactions?

For 5 years after the insurance transaction is completed by the insurer

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education.

If a life insurer holds the proceeds of any policy it issues, which of the following is true?

The proceeds may be exempt from any creditor's claims against a beneficiary other than the policy owner.

When does a free-look period begin on a life insurance policy?

When the policy is delivered to the insured

All of the following information about a customer must be used in determining annuity suitability EXCEPT

beneficiary's age