Life & Health Chapter 2 Exam

d. If it cannot be determined who expired first, the insured or primary beneficiary, the insured will be presumed to have survived the beneficiary. The purpose of the Uniform Simultaneous Law is to establish that if it cannot be determined whether the insured or primary beneficiary died first in common disaster, the insured will be presumed to have survived the beneficiary and the proceeds of the policy will be paid to the estate of the insured (beneficiary sequence).

Which of the following best defines the Uniform Simultaneous Law? a. Denial of the beneficiary's right to commute, alienate, or assign a policy. b. Any doubt of ambiguity found in a life contract is constructed against the insurer. c. The permanent and temporary needs should be covered with ample life insurance. d. If it cannot be determined who expired first, the insured or primary beneficiary, the insured will be presumed to have survived the beneiciary.

d. Primary, contingent and tertiary The question referes to proper succession of beneficiaries, not types or designations. The proper succession is primary, contingent, and tertiary.

Which of the following is the proper sequence of beneficiaries? a. Wife, children and estate b. Primary, tertiary and contingent c. Primary, secondary and estate d. Primary, contingent and tertiary

b. Companies have the right to require medical examinations. To reinstate a lapsed policy, back premiums plus interest need to be paid, proof of insurability is required, and a request for reinstatement has a time limit.

Which of the following is true concerning reinstatement of a life insurance policy? a. Back premiums need not to be paid prior to granting reinstatement. b. Companies have the right to require medical examinations. c. Reinstatement may be completed at anytime after the policy has lapsed. d. Proof of Insurability is not required.

a. Pay benefits based on what past premiums would have purchased at the correct age. The Misstatement of Age or Sex Provision states that if the insured's age or sex has been misstated, the insurer is allowed, at the time of claim, to adjust benefits according to the amount of premiums would have purchased at the correct age or sex.

A misstatement of an insured's age was not discovered until death. The policy had been in effect for three years. What will the insurer do to correct the problem? a. Pay benefits based on what past premiums would have purchased at the correct age. b. Cancel the policy. c. Issue a new policy. d. Collect a fine from the policyholder.

c. Ownership Provision The Ownership Provision stipulates the policyowner's right to exercise all privileges and options under the policy.

A policywoner has the right to receive the cash value and dividends, change beneficiary, assign the policy, and to exercise all other privileges and options. Which of the following provisions allows these actions? a. Assignment Provision b. Insured Provision c. Ownership Provision d. Entire Contract Provision

c. Entire contract The Entire Contract Provision stipulates that the policy, any riders and a copy of the application form the contract between the owner and the insurer.

A provision that states that the policy, any riders and a copy of the application from the contract between the owner and the insurer is called the: a. Complete contract b. Exception to the contract c. Entire contract d. Whole contract

a. His surviving children, who will share the proceeds equally. Per capita means that surviving beneficiaries share equally in death benefits. If Ed's policy is $100,000 in death benefit, and if upon his death, there are two surviving children, each gets $50,000.

Ed purchased a policy naming his children as per capita beneficiaries. Upon his death the proceeds are paid to: a. His surviving children, who will share the proceeds equally. b. All beneficiaries, with deceased beneficiary's share passed to his/her heirs equally. c. His wife, then all children or their heirs. d. The estate of the insured, then passed down to the heirs.

b. Pay the death benefit, less the amount of premium due. The policy is in force during the grace period and the Grace Period Provision states that if death occurs during the grace period, the insurer pays the death benefit, minus any premiums or loans due.

If an insured dies during the policy's grace period, the insurer will: a. Pay the death benefit after the beneficiary has paid the premium due. b. Pay the death benefit, less the amount of premium due. c. Pay the death benefit and waive the premium. d. Deny the claim.

d. Grace Period If the insured dies during the grace period, the death benefit of the policy is payable to the beneficiary minus any premiums or loans due.

If the insured dies while this provision is activated, the death benefit is payable minus the premiums due. a. Nonforfeiture Period b. Settlement Period c. Incontestability Period d. Grace Period

c. Revocable beneficiary By naming her husband as a revocable beneficiary, Linda would retain all rights of ownership. To name her husband irrevocably you'll give her husband a vested interest in policy benefits. The other answers refer to beneficiary sequence.

Linda names her husband as the beneficiary of her life policy but wants to retain all rights of ownership. Which of the following best defines this type of beneficiary? a. Tertiary beneficiary b. Irrevocable beneficiary c. Revocable beneficiary d. Contingent beneficent

b. Creditor When a credit beneficiary designation is made, the grantor of the credit (creditor) is normally the beneficiary.

Normally, Credit Life is written in connection with a loan. Who is generally named as the beneficiary? a. Debtor b. Creditor c. Spouse of insured d. Insured's bank to pay off the loan from checking

b. The Common Disaster Clause The Uniform Simultaneous Law is also known as the Common Disaster Clause, as both the insured and beneficiary died as a result of a common event.

Th Uniform Simultaneous Law presumes the beneficiary preceded the insured in death when the time of death cannot be determined. This is also known as: a. The Assignment Clause b. The Common Disaster Clause c. The Estate Law d. The Insurance Clause

d. Revocable and irrevocable The question is asking about types of beneficiaries, not succession of beneficiaries or beneficiary designations.

What are the two types of beneficiaries found in a life insurance policy? a. Living and deceased b. Primary and contingent c. Individual and class d. Revocable and irrevocable

a. Absolute and collateral The two types of assignment are Collateral (partial), and Absolute (entire face amount).

What are the two types of life insurance assignments? a. Absolute and collateral b. Complete and partial c. Revocable and irrevocable d. Entire amount and percentage amount

d. A provision may require contract forfeiture when an outstanding loan is less than the loan value. It is prohibited for a life insurance policy to require contract forfeiture when an outstanding loan is less than the loan value of the policy.

Which of the following is false? a. The time limit for any legal action to be taken shall not be less than one year. b. Provisions shall not designante the agent as the representative of the insured. c. A life insurance provision shall not allow the settlement to be less than the face value, minus indebtedness upon the policy's maturity date. d. A provision may require contract forfeiture when an outstanding loan is less than the loan value.

d. Backdating a policy The other answers are standard provisions. Backdating a policy is a prohibited provision, other than to conserve age.

Which of the following provisions is not a standard provision? a. Misstatement of age b. Incontestability c. Grace Period d. Backdating a policy

c. Beneficiaries may be changed only with the written consent of the present beneficiary. Once an irrevocable beneficiary had been declared by the owner of the policy, the only way that the irrevocable beneficiary can then be changed is only with the irrevocable beneficiary's prior written consent. An irrevocable beneficiary has a vested interest in the policy benefits.

Which of the following statements is accurate concerning the changing of an irrevocable beneficiary? a. The beneficiary can never be changed. b. Beneficiary may be changed only the anniversary date of the policy. c. Beneficiary may be changed only with the written consent of the present beneficiary. d. The owner may change the irrevocable beneficiary any time.

a. Aviation is excluded, except for fare-paying passengers on a commercial flight. Without an Aviation Rider on the policy, death as a result of aviation is excluded, except for a fare-paying passenger on a regularly scheduled commercial flights.

Which of the following statements regarding exclusions under a life policy is true? a. Aviation is excluded, except for fare-paying passengers on a commercial flight. b. Suicide is excluded, regardless of when committed. c. The war clause states coverage is provided if death is the result of war. d. Hazardous occupations are usually covered at a reduced benefit if death is the result of an insured's occupation.

a. Conversion Option The Conversion Option, as the name implies, allows the insured to convert to some other types of policy, such as term policy, to a permanent policy.

Which provision allows the insure to change to another type of policy form? a. Conversion Options b. Entire Contract Provision c. Ownership Options d. Consideration