Life 2
The owner of a business is insured under a $100,000 Key Employee Life policy that contains a Double Indemnity clause and a Suicide clause. The business has paid the annual premium of $2,000. Six months after the inception date of the policy, the insured commits suicide. The insurance company's liability for payment is:
$2,000
Maurice takes a $500 loan against a $10,000 whole life policy with a 5% interest rate. Maurice dies one year later and had not repaid the loan. How much will the benefit be?
$9475
A $10,000 life insurance policy with a Triple Indemnity clause has been in force for 3 years. Black Cloud, the insured, is injured in a train wreck and dies in a hospital 5 months later. The death proceeds payable under the policy would be:
0
What is the maximum interest rate an insurance company can charge the policyowner for a fixed or adjustable rate?
10% for a fixed rate, for an adjustable the rate will be tied to Moody's Bond Index
A life insurance policy provides a straight coverage of $100,000 for a period of five years. Which of the following terms correctly apply to this policy?1. Permanent2. Term3. Level4. Variable
2 and 4
At age 30, OohJay wishes to purchase a Whole Life policy. His agent explains that he can pay for the policy in several ways. One method is called 20-Pay Life, and another Straight Life. OohJay wishes to know which plan will accumulate cash value at a faster rate in the early years of the policy. Which of the following would be the agent's most appropriate response?
20-Pay Life will accumulate cash value faster.
An agent who holds a securities license is called
A Registered Financial Representative
A policy that is sold in proportioned units to cover the insured, spouse and children is called a:
A family plan
Which of the following features applies to decreasing term insurance?
A portion of the premium is returned at the end of the contract
Joe the Ragman buys a $100,000 policy. He has a $50,000 mortgage from the bank. He assigns his policy as collateral to the bank, with the remaining balance, if any, to be paid to his wife Josephine. Joe has set up a/an:
Collateral Assignment
Ordinary Life policies must include all of the following provisions EXCEPT:
Consideration Clause
The form of insurance designed to cover the liability of a borrower with an amortized loan is a/an:
Decreasing Term
The NON-FORFEITURE OPTIONS include all of the following EXCEPT:
Extended term insurance
The most common type of insurance sold is
Group
The following statements about UNIVERSAL LIFE are true, except:
It is a contract containing a cash reserve account, from which current mortality costs are drawn monthly by the insurer.
All of the following statements regarding Modified Endowment Contracts are true except?
It is the responsibility of the insurance company to make sure the policy does not become a MEC.
An applicant with heart problems denied this material fact and died within the 2-year incontestable period. However, the death was the result of a traffic accident. The insurance company will take which course of action?
It will pay whatever the premium would have purchased at the time of death.
Which of the following types of policies' cash may NOT be affected by stock market/mutual funds
Modified Whole Life
Which is correct concerning a GRADED PREMIUM WHOLE LIFE policy?
Premiums start low, increasing each year during the early years of the contract and then remain constant for life.
How is a policy loan repaid if the policy pays a death claim?
The loan, plus any interest due, is deducted from the death benefit.
Which of the following statements is not true about exercising a Guaranteed Insurability option?
The new insurance is available at the original issue age rate
The insuring clause is typically undersigned by:
The president and the secretary of the company
Dividend projections may be included in a proposal for a life insurance policy when which of the following is true?
There is a clear statement that payment of future dividends is not guaranteed.
Which of the following statements about the reinstatement provision is true?
There is no new suicide exclusion with a reinstated policy
Which of the following policies allow for withdrawals:
Universal Life and Variable Universal Life
If the growing cash value-to-total death benefit ratio exceeds a certain percentage fixed by federal law, an additional amount of pure insurance, called the "corridor", is added to maintain the minimum death benefit. This statement pertains to which of the following:
Universal Life, Option 1
Signing over ALL rights of ownership in a policy by the owner is:
a transfer of rights.
An applicant for reinstatement may have to do all of the following EXCEPT:
agree to a new suicide provision
The incontestable clause permits insurers to contest a death claim:
for any misrepresentations, regardless of the elapsed time.
Which of the following would provide more death benefit for your premium dollar while still accumulating cash value, assuming issue age 25?
whole life
Which of the following is not true concerning the waiver of premium rider?
The benefit usually drops off at age 65
Which of the following policies would have a higher premium?
Non-Participating Policies
The increase in an increasing term policy is tied to which of the following?
Specific amounts or a percentage of the face value
The insured died during the Grace Period of her life insurance policy and had not paid the required annual premium. The insurance company is obligated to pay which of the following to the beneficiary?
The face amount of the policy less any earned premiums
The entire contract provision contains all of the following except:
medical exam
Which of the following dividend options would have a cash value?
one-year term
If the insured understated his/her age and the error is discovered after the insured's death, the insurance company will:
refund all past premiums paid with any accumulated interest
