Chapter 10

How long is the grace period in group policies?

31 days

According to the state nonforfeiture law for life insurance policies, insurers must offer at least one of the following nonforfeiture options EXCEPT

Reduction of premium

Viatical settlements may be rescinding within what time period after the viator receives the proceeds?

15 days

All of the following statements are correct regarding credit life insurance EXCEPT

Benefits are paid to the borrower's beneficiary.

Which of the following must be included in all life insurance advertisements?

Identity of the actual insurer

The initial amount of credit life insurance may NOT exceed

The amount to be repaid under the contract

Which of the following is NOT required on an illustration used in the sale of a life insurance policy?

The name of the primary and secondary beneficiaries

Is it illegal for an insurance company to advertise that it is the leader of the financial industry and therefore pays the most claims each year?

Yes; advertisements must not mislead the public in terms of financial standing.

Which of the following would be the beneficiary in credit life insurance?

creditor

The usage of words or symbols that are similar to what entity is prohibited in life insurance advertisements?

federal government

Which of the following types of insurance policies is most commonly used in credit life insurance?

Decreasing term Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor. It is usually written as decreasing term insurance.

When possible, what should insurers strive to eliminate from illustrations?

Footnotes and caveats

What is the main purpose of the regulation on life insurance policy illustrations?

To help the public make educated decisions about buying life insurance

Which of the following CANNOT be included along with illustrations used to sell life insurance?

Vanishing premium information