Life Insurance (Includes All Sections)
All of the following are features and requirements of the Living Needs Rider EXCEPT
Diagnosis must indicate that death is expected within 3 years.
The type of term insurance that provides increasing death benefits as the insured ages is called
Increasing Term
The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called
Joint and survivor
The National Do Not Call Registry was created to regulate
Telemarketers
The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option in this case?
The beneficiary
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then
The benefit is received tax free
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?
The insured may choose to convert to term or permanent individual coverage
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
The policy is owned by the company
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
The type of investment
What is the purpose of settlement options?
They determine how death proceeds will be paid.
All of the following are requirements for life insurance illustrations EXCEPT
They must be part of the contract
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
What is the minimum age for an individual to buy an insurance policy in Alabama?
15
Which of the following events could result in the revocation or suspension of a business entity's insurance license?
A principal or manager of the business is in violation of Alabama insurance laws and the business entity, while aware of the violation, does not report the violation to the Commissioner.
A Universal Life Insurance policy is best described as a/an
Annually Renewable Term policy with a cash value account.
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?
Automatic premium loan
Which of the following is NOT typically excluded from life policies?
Death due to plane crash for a fare-paying passenger
In addition to obtaining an insurance producer license, a business entity, in order to transact insurance, must have at least
One individual licensed insurance producer
Which of the following riders would NOT cause the Death Benefit to increase?
Payor Benefit Rider
The Life Insurance Solicitation Regulation was promulgated to do the following:
Provide adequate information to consumers regarding relative cost of insurance products.
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?
Size of each installment
Which of the following entities was created to protect insureds against an insurer's insolvency?
The Life and Disability Insurance Guaranty Association
All of the following are characteristics of a group life insurance plan EXCEPT
There is a requirement to prove insurability on the part of the participants.
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6 credits
Whenever the Commissioner believes that a licensee is acting or using methods contrary to the insurance laws or regulations of Alabama, to prevent further acts or methods from being conducted before a hearing can be held to determine the facts, the Commissioner may impose:
A cease and desist order on the license
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
A family's income need is greatest during which period?
Family Income Dependency
The death benefit under the Universal Life Option B
Gradually increases each year by the amount that the cash value increases.
The reduction, decrease, or disappearance of value of the person or property insured in a policy by a peril insured against is known as
Loss
Which of the following provisions would NOT be found in Term life insurance?
Policy loan
Eddie submitted an application for life insurance without paying the premium. The application was approved, and now the agent is delivering the policy. What should the agent have Eddie sign?
Statement of Good Health
Which of the following information will be stated in the consideration clause of a life insurance policy?
The amount of premium payment
How long will a life annuity with an installment refund pay?
Until the balance of the initial premium is paid out in continued payments to the beneficiary after the annuitant dies.
Which of the following statements is correct regarding a whole life policy?
he policyowner is entitled to policy loans.
An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed Insurability option
A Universal Life insurance policy has two types of interest rates that are called
Guaranteed and Current.
Which of the following inviduals must have insurable interest in the insured?
Policyowner
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract.
Which of the following statements is NOT true concerning insurable interest as it applies to life insurance?
A debtor has an insurable interest in the life of the lender
A person convicted of willfully violating an insurance law of Alabama is subject to
A fine of up to $1,000, imprisonment, and a sentence to hard labor for a period of one year.
Which of the following is a requirement that must be satisfied before an applicant can receive an insurance producer license in Alabama?
Complete prelicensing classroom instruction, unless otherwise exempt by the Commissioner
What term best describes the act of withholding material information that would be crucial to an underwriting decision?
Concealment
In increasing and decreasing term policies, which policy component fluctuates during the policy term?
Death Benefit
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
Which of the following refers to the amount of retirement benefits a worker receives under Social Security based on the worker's earnings and retirement age?
PIA (Primary Insurance Amount)
Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?
Paid-up option
Which of the following factors is NOT considered by an underwriter when determining the premium rates for an individual seeking insurance?
Race
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid-up
Agent D submitted an application for life insurance on client A. No money was sent with the application. When Agent D attempted to deliver the policy, he discovered that A had suffered a heart attack since the application was taken. The agent should
Return the policy to the insurer
Alle the following entities regulate variable life policies EXCEPT
The Guaranty Association
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?
Third-party ownership
A key person insurance policy can pay for which of the following?
Cost of training of the key employee