Life and health ch 1 and 2
Insurance policies are not drawn up through negotiations , In an insured has little to say about it's provisions. What contract characteristic does this describe
Adhesion
In classifying a risk the home office underwriting department will look at all of the following except
Applicant's past income.
Which of the following is not typically excluded from life policies
Death due to plane crash for a fare-paying passenger
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
Equal to the original policy for as long as the cash values will purchase.
Which policy component decreases in decreasing term insurance?
Face amount
Under a 20 Pay whole life policy in order for the policy to pay the death benefit to the beneficiary the premium must be paid
For 20 years or until death which ever occurs first
Which of the following terms best describes the coverage provided by term policies as compared to any other form of protection
Greatest
Which of the following is true regarding the accumulation period of an annuity
It is a period during which the payments into the annuity grow tax deferred.
What is the purpose of conditional receipt
It is intended to provide coverage on a date earlier than the date of the issuance of the policy.
Which of the following best describes annually renewable term insurance
It is level term insurance
Which statement is not true regarding a straight life policy
Its premium steadily decreases over time, in response to its growing cash value.
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that
Joint Life Policy
A policy will pay the death benefit if the insured dies during the 20 year premium paying period and nothing if that occurs after the 20 year period . What type of policy is this
Level term
Which option is being utilized when the insurer accumulates dividends and interest and then he uses the accumulated dividends plus interest and the policy cash value to pay the policy up early
Paid up option
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
Which nonforfeiture option provides coverage for the longest period of time
Reduced Paid-Up
Which of the following is not one of the three basic types of coverage that are available, based on how the fact amount changes during the policy term
Renewable
Which of the following policies will be classified as a traditional level premium contract
Straight life
Which of the following types of risk will result in the highest premium
Substandard risk
Nonforfeiture values guarantee which of the following for the policy owner
That the cash value will not be lost
Which of the following information will be stated in the consideration clause of a life insurance policy
The amount of premium payment
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?
The beneficiary will only receive payments of the interest earned on the death benefit.
Which of the following determines the cash value of a variable life policy
The performance of the policy portfolio
Which of the following best describes what the annuity period is
The period of time during which accumulated money is converted into income payments
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?
The policy will be interpreted as if the insurer waived its right to have an answer on the application
Which of the following statements is correct regarding a whole life policy
The policyowner is entitled to policy loans
Which of the following is not true regarding equity indexed annuities
They earn lower interest rates than fixed annuities.
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
Which type of life insurance policy allows the policy owner to pay more or less than the planned premium
Universal Life
Which of the following is a key distinction between variable whole life in variable universal life products
Variable whole life has a guaranteed death benefit
An individual purchased a $100,000 joint life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000
The insured is also the policy owner of a whole life policy. What age must the insured attain in order to receive the policy's face amount
100
For how long is an insurance company allowed to defer policy loan request
6 months
According to the Entire Contract provision, a policy must contain
A copy of the original application for insurance
Which of the following documents deliver to the policy owner includes information about premium amount cash values surrender value and death benefits for specific policy years
A policy summary
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
Authorized or admitted
Which of the following protects the insured from an unintentional policy lapse due to nonpayment of premium
Automatic premium loan
Which of the following is not an essential element of insurance contract
Counter offer
What characteristic makes whole life permanent protection
Coverage until death or age 100
Which dividend component decreases in decreasing term insurance
Face amount
Annually renewable term policies provide a level death benefit for a premium that
Increases annually
What are two components of a universal policy
Insurance and cash account
Which of the following is an example of a limited pay life policy
Life Paid-up at Age 65
The different option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the
One year term option
Equity Index Annuities
Seek higher returns
All of the following entities regular variable life policies except
The guaranty association
What is the purpose of the buyers guide
To allow the consumer to compare the costs of different policies
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
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
When would a 20-pay whole life policy endow?
When the insured reaches age 100
Annual renewal term(ART)
When the premium increases annually according to age as the probability of death increases
The death protection component of universal life insurance is always
annually renewable term
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is
conditional
What type of premium do both universal life in variable life policies have
flexible
The automatic premium loan provision is activated at the end of the
grace period
Stranger originated life insurance policies are in direct opposition to the principle of
insurable interest
Who bears all of the investment risk in a fixed annuity
insurance company
Three types of term insurance
level, increasing, decreasing
The premium of a survivorship life policy compared with that of a joint life policy would be
lower
a insured committed suicide one year after his life insurance policy was issued. the insurer will
refund the premiums paid
The practice of terminating an existing policy or letting it lapse and exchanging it with a new one is called
replacement
For variable products, underlying assets must be kept in
separate account
Representations
statements believed to be true to the best of one's knowledge, but they are not guaranteed to be true
All of the following are true about the variable products except
the premiums are invested in the insurer's general account
Which of the following types of policies will provide permanent protection
whole life
warranty
An absolutely true statement upon which the validity of the insurance policy depends.
All of the following are dividend options except
Fixed period installments
The death benefit under the universal life option B
Gradually increases each year by the amount that the cash value increases
A married couple owns a permanent policy which covers both of their lives and paste the death benefit only upon death of the first insured. Which policy is that
Joint life policy
Who might receive dividends from a mutual insurer?
Policyholders
Which of the following best defines Target premium in a universal life policy
The recommended amount to keep the policy in force throughout its lifetime
Which of the following policies would have an IRS Required corridor or gap between the cash value and death benefit
Universal Life - Option A
In a survivorship life policy when does the insurance pay the death benefit
Upon the last death