Dri 5.0

If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?

$3,000

An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out?

$50,000

The conversion privilege allows a person to change coverage from

A group policy to an individual policy without evidence of insurability.

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies

In which type of a group life insurance plan, the employee pays part of the premium?

Contributory

According to the entire contract provision, what document must be made part of the insurance policy?

Copy of the original application

A key person insurance policy can pay for which of the following?

Costs of training a replacement

Which of the following is NOT fundable by annuities?

Death benefits

All of the following statements concerning dividends are true EXCEPT

Dividend amounts are guaranteed in the policy.

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)

Equity Indexed Annuity.

Which policy component decreases in decreasing term insurance?

Face amount

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

Foreign

What required provision protects against unintentional lapse of the policy?

Grace period

What are the two components of a universal policy?

Insurance and cash account

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. Which settlement option should the policyowner choose?

Interest only option

Which of the following best describes the MIB?

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount.

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

Which of the following riders would NOT cause the Death Benefit to increase?

Payor Benefit Rider

The conversion provision required by state law gives the certificate holder the right to convert group life coverage to an individual life policy without

Providing evidence of insurability.

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

Replacement rule

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must

Respond to the consumer's complaint.

Which of the following policies would be classified as a traditional level premium contract?

Straight Life

Which of the following is TRUE regarding variable annuities?

The annuitant assumes the risks on investment.

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability.

Which of the following is INCORRECT concerning a noncontributory group plan?

The employees receive individual policies.

The purpose of the reinstatement provision is

To determine the process for reactivating coverage once a policy has lapsed.

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

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.

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than

With the policy.