Life insurance

Under what circumstances may a life insurance agent deliver a policy that is dated up to 3 months before the application was taken?

To avoid an increase in premium rate for the insured

Equity indexed annuities

Seek higher returns

All of the following are requirements for life insurance illustrations EXCEPT

They must be part of the contract.

If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about

Whether an insurable interest exists between the individuals

Group life insurance can be converted to an

individual whole life policy

In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT

The type of investment.

insurer that hold a certificate of authority in in the state it does business is

authroized insurer

Exclusions are

restrictions of coverage as stated in the policy.

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report.

An insured purchased an individual life insurance policy with a face amount of $15,000. He pays a premium each month. What type of policy is that?

Ordinary life

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

Settlement option

Which of the following is NOT true of Section 1035 Policy Exchanges?

Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days.

Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level?

Bail out

Which of the following terms is used to name the nontaxed return of unused premiums?

Dividend

What type of insurance would be used for a Return of Premium rider?

Increasing Term

If a settlement option is not chosen by the beneficiary or policyowner, which option will be used?

Lump Sum

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer.

insurance policies are not drawn up through negotations and the insured has little to say about provisions. What contract does that describe?

Adhesion

An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information?

Application

Traditional IRA contributions are

tax deductible

Which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy.

Which of the following statements about group life is correct?

The cost of coverage is based on the ratio of men and women in the group.

Which of the following is true about warranties?

They are garanteed to be true

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education.

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

Conditional

Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?

Installments for a fixed period

During partial withdrawal from a universal life policy, which portion will be taxed?

Interest

When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?

Interest only

According to the Entire Contract provision, a policy must contain

It is level term insurance.

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

It will pay double or triple the face amount.

When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all of the premiums paid. Which rider is attached to the policy?

Return of premium

the group sponsor receives ... while the participants receive ...

a master contract and certificate of insurance

What limits the amount that a policyowner may borrow from a whole life insurance policy?

cash value

all of the following actions could be described as risk avoidance exxcept

investing in the stock market

The causes of loss insured against in an insurance policy are known as

perril

entire contract is

policy + copy of application + any riders or amendments

Installing deadbolt locks on the doors of a home is an example of which method of handling risk?

Reduction

Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?

Standard risk is representative of the majority of people

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusions clause

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

One-year term option.

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

2 years

Which of the following entities is not a insurer but an organization formed to provide insurance benfits for member of an affiliated lodge or religious organization?

Fraternal benefit society

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination

What must happen when an individual policy or annuity has been personally delivered to the policyowner?

The policyowner must sign a delivery receipt.

In insurance policies, contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this?

The right to determine the wording of a policy

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

fixed period

the owner of an adjustable life policy has the following privileges

increasing or decreasing the premium, changing the premium-paying period, increasing or decreasing the face amount of coverage, or changing the period of protection

Which of the following is another term for the accumulation period of an annuity?

pay - in period

Which of the following insurance options would be considered a risk-sharing arrangement?

reciprocal

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

survivor protection

A buy-sell agreement is simply a contract

that establishes what will be done with a business in the event that an owner dies

which of the following is not a goal of risk retention?

to minimize the insured level of liability in the event of loss

the group life insurance premiums are

usually lower than those of an individual policy