Life Insurance Basics

In a life settlement contract, whom does the life settlement broker represent?

The owner. Life settlement brokers only represent the policyowner.

Which of the following would least likely be considered a legitimate need that would be paid by insurance proceeds? Vacation Travel Expenses Travel expenses for family to come to the funeral Debt Cencellation Day Care

Vacation Travel Expenses. These are considered a luxury, not a need.

Which of the following information about the applicant is NOT included in the General Information section of the application for insurance? Gender Occupation Marital Status Medical Background

Medical Background. Part 1 of application is General Information. Part 2 is the Medical Background information.

If an applicant for a life insurance policy and the potential insured are two different people, what would be the underwriter's main concern?

Whether an insurable interest exists between the individuals. Insurable interest includes: spouses, parents, children, and certain business relationships.

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

The policy owner must sign a delivery receipt. The receipt will be in duplicate and state the date the contract was received.

Which of the following is NOT a characteristic of variable annuities? The cash value is adjusted for inflation. They offer guaranteed stock performance. The contract owner bears the investment risk. Benefits are dependent on the performance of securities.

They offer guaranteed stock performance.

An applicant wants to buy a policy that has a cash value element. Which type should she buy?

Permanent.