Life insurance basic Chapter quiz

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Once a viatical contract has been established, how long does the viator have to rescind the contract?

15 calendar days

Which of the following applicants could the insurer charge a higher rate of premium and not violate regulations regarding unfair discrimination?

An applicant who is a smoker

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

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

In the event the key employee quits or is terminated, what provision allows the policyowner to transfer coverage to the replacement employee, provided the new employee provides evidence of insurability?

Change of Insured

Which of the following is NOT an example of a valid insurable interest?

Debtor in the life of the creditor

Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?

Human life value approach (HLVA)

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?

Inspection report

Which of the following is usually true of a participating life insurance policy?

It pays dividends to policyowners

Which of the following best describes gross annual premium?

Net Premium Plus Expenses

During replacement of life insurance, a replacing insurer must do which of the following?

Obtain a list of all life insurance policies that will be replaced

Where would the underwriter find relevant information not presented by the applicant on the insurance application but communicated by the producer?

Producers Report

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

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

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

The policyowner must sign a delivery receipt

Which of the following effectuate a viatical settlement contract?

Viatical settlement providers


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