Life Insurance

Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe? Unilateral Conditional Personal Adhesion

Adhesion

A health plan policy cannot be issued or delivered in Minnesota until which of the following has been filed with the Commissioner? Premium rates only Both risks classification and premium rates Neither risks classification or premium rates Risks classification only

Both risks classification and premium rates

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner? Cash surrender Reduced paid-up Paid-up options Extended term

Cash surrender

Which of the following is TRUE about credit life insurance? Debtor is the policy beneficiary. Creditor is the policyowner. Debtor is the annuitant. Creditor is the insured.

Creditor is the policy owner

What are the 2 types of losses? Open peril and named peril Pure and speculative Insurable and uninsurable Direct and consequential

Direct and consequential

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a Guaranteed insurability rider. Paid-up additions option. Cost of living provision. Nonforfeiture option.

Guaranteed insurability rider.

Which of the following homeowner's coverage forms applies to condominium unit owners? HO-4 HO-6 HO-8 HO-2

HO-6

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits? Variable annuity Flexible payment annuity Deferred interest annuity Immediate annuity

Immediate annuity

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? Mortality rate Risk exposure Morbidity Life expectancy

Life expectancy

A participating insurance policy may do which of the following? Provide group coverage Pay dividends to the stockholder Require 80% participation Pay dividends to the policyowner

Pay dividends to the policyowner

An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time that the insured had concealed information during the application process. What can they do? Refuse to pay the death benefit because of the fraud Pay a decreased death benefit Sue for the right to not pay the death benefit Pay the death benefit

Pay the death benefit

All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT Most term policies contain a convertibility option. Upon conversion, the premium for the permanent policy will be based upon attained age. Upon conversion, the death benefit of the permanent policy will be reduced by 50%. Evidence of insurability is not required.

Upon conversion, the death benefit of the permanent policy will be reduced by 50%

When would a 20-pay whole life policy endow? At the insured's age 65 After 20 payments In 20 years When the insured reaches age 100

When the insured reaches age 100

When an applicant purchased a life insurance policy, the agent dated the application 4 months prior. When asked by the applicant, the agent said he was allowed to backdate policies up to 6 months if it would Lower the insured's premium. Shorten the contestability period. Eliminate pre-existing conditions. Help him meet a sales quota for that period.

Lower the insured's premium.

Who might receive dividends from a mutual insurer? Subscribers Stockholders Agents Policyholders

Policyholders

All of the following are personal uses of life insurance EXCEPT Estate creation. Cash accumulation. Buy-sell agreement. Survivor protection.

Buy-sell agreement.

All of the following are true regarding rebates EXCEPT Rebates are only allowed if specifically stated in the policy. Rebating can be anything of economic value, given as an inducement to buy. Dividends are not considered to be rebates. Rebates are allowed if it's in the best interest of the client.

Rebates are allowed if it's in the best interest of the client.

What are the two components of a universal policy? Separate account and policy loans Insurance and cash account Insurance and investments Mortality cost and interest

Insurance and cash account

Methods used to pay the death benefits to a beneficiary upon the insured's death are called. Settlement options. Designation options. Beneficiary provisions. Death benefit options.

Settlement options.

Once an individual has successfully passed a licensing exam, for how many year(s) are the results valid? 1 2 5 3

3

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters? 4 credits 6 credits 10 credits 40 credits

6 credits

According to the Entire Contract provision, a policy must contain: A declarations page with a summary of insureds. Buyer's guide to life insurance. Listing of the insured's former insurer(s) for incontestability provisions. A copy of the original application for insurance.

A copy of the original application for insurance.

An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits? The entire living benefit is considered taxable income. A portion of the benefit up to a limit is tax free; the rest is taxable income. Principal is tax free, but interest is taxed. The entire benefit will be received tax free.

A portion of the benefit up to a limit is tax free the rest is taxable income

This state provided for a temporary license for all of the following EXCEPT A producer's disability. A producer's time in the military service. A producer's retirement. The death of a producer.

A producer's retirement.

Which of the following statements is TRUE about a policy assignment? It authorizes an agent to modify the policy. It transfers rights of ownership from the owner to another person. It is the same as a beneficiary designation It permits the beneficiary to designate the person to receive the benefits.

It transfers rights of ownership from the owner to another person.

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called Fixed period. Fixed amount. Joint life. Joint and survivor.

Joint and survivor.

All of the following would be different between qualified and nonqualified retirement plans EXCEPT. Taxation on accumulation Taxation of withdrawals Taxation of contributions IRS approval requirements

Taxation on accumulation