Life Insurance Basics
Which of the following individuals must have insurable intrest in the insured?
The policyowner
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 best describes gross annual premium?
Next premium plus expenses.
Which of the following will be included in a policy summary?
Premium amounts and surrender values
A producer is helping a married couple determine their/the financial needs for their children; in the event one or both of them should die. This is a personal use of life insurance known as
Survivor Protection
Which of the following may NOT be included in an insurance companys advertisement?
That its policy(ies) are covered by a State Guaranty Assocation
An insurance invests the money it receives from premiums paid by its insureds. Which of the following is true regarding the interest earned on these investments:
It is used to lower premiums
Which of the following methods of calulating the face amount of life insurance needed takes into account the insureds wages, years to retirement, and inflation.
Human Life Value Approach
Which of the following statements regarding HIV testing for life insurances purposes is NOT true?
Insurers are barred from requesting HIV testing.
What is the primary source of information used for underwriting?
The Application.
What is the purpose of Key Person Insurence?
To lessen the risk of financial loss because of the death of a key employee.
A corperation is the Owner and beneficiary of the Key Person Life Policy. If the corporation collects the policy benefit(s) then
The benefit received is tax free
An insurer wants to begin underwriting procedures for an applicant what source will it consult for the majority of its underwriting information?
The Application
All of the following are characteristics of group life insurence EXCEPT:
Premiums are determined by the age, sex, occupation of the entire group.
If an insurance company makes a statement that its policies are guaranteed by the exitence of the Insurance Guarnaty Association, that would be considered
An unfair trade practice
