Life and health chap. 3 and 4
In order to qualify for a conversion from a group life policy that has been terminated to an individual policy of the same coverage a person must have been insured under the group plan for how many years
5 years
The accelerated benefits provision will provide for an early payment of death benefit when the insured
Becomes terminally ill
Which of the following policy components contains the company's promise to pay
Insuring clause
All of the following are nonforfeiture options except
Interest only
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed., During which, is the original recipient dies, the payments will continue to a designated beneficiary
Life income with period Certain
An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.
All of the following are general requirements of a qualified plan except
The plan must provide an offset for social security benefits.
If the insured continually uses the automatic premium loan option to pay the policy premium
The policy will terminate when the cash value is reduced to nothing
An absolute assignment is a
transfer of all ownership rights in a policy
What provision in insurance policy extend coverage be on the premium due date
Grace period
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?
It is only taxable if the cash value exceeds the amount paid for premiums.
Which of the following is correct concerning the taxation of premiums in a key person's life insurance policy
Premiums are not tax-deductible as a business expense
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
Purchase a single premium policy for a reduced face amount
All of the following are characteristics of a group life insurance plan except
There is a requirement to prove insurability on the part of the participants.
Which of the following insurance arrangements will be appropriate for a parent by a life insurance policy on a child where the parent is the policy owner
Third-party ownership
What is the purpose of key person insurance
To lessen the risk of financial loss because of the death of a key employee
What is the name of the clause that is included in a policy that limits or illuminates the death benefit if the insured dies as a result of war or while serving in the military
War or military service
What type of life insurance is most commonly used for group plans
annually renewable term
An insured pays an annual premium to his insurer. In return the insurer promises to pay benefits in accordance with the terms of the contract. This is called
consideration
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6 credits
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
All of the following are true of the federal tax advantages of a qualified plan except
At distribution, all amounts received by the employee are tax free.
What is the clause that describes the method of paying the Death benefit in the event that the insured in beneficiary are both killed in the same accident
Common disaster clause
What happens when a policy is surrendered for its cash value
Coverage ends and the policy cannot be reinstated
Which of the following terms is used to name the non-tax return of unused premiums
Dividend
Items stipulated in the contract that the insurer will not provide coverage for are found in the
Exclusions clause
When an employee terminates coverage under a group insurance policy coverage continues in force
For 31 days.
In a direct rollover, how is the money transferred from one plan to the new one?
From trustee to trustee
Which of the following, when attached to a permanent life insurance policy, allows the policyholder to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members
Term rider
All of the following statements are true regarding tax qualified annuities except
employer contributions are not tax deductible
Life income joint and survivor settlement option guarantees
income for 2 or more recipients until they die
Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors
life expectancy
In a life settlement contract, whom does the life settlement broker represent
owner
What is the name of the insured who enters into a viatical settlement
Viator
In the executive bonus plan, Who is the owner of the policy and who pays the premium
Executive is the owner, and the executive pays the premium
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
Family term rider
If a life insurance policy has an irrevocable beneficiary designation
The beneficiary can only be changed with written permission of the beneficiary
Which of the following is an example of liquidity in a life insurance policy
The cash value available to the policy owner
Which of the following statements about a suicide clause in a life insurance policy is true
Suicide is excluded for a specific period of years and covered thereafter.
Children's riders attached to whole life policies Are usually issued as what type of insurance
Term
Viatical settlements
allow someone living with a life-threatening condition to sell their existing life insurance policy and use the proceeds when they are most needed, before their death