Series 3: Life Insurance Basics

A group policy provision that prevents an insurer form denying a claim due to statements in an application after the policy has been in force for two years EXCEPT for non-payment of premiums best describes: Select one: a. Incontestability b. Insurability c. Conversion d. Reinstatement

a

Concerning Group Standard Provisions policyholder has a grace period of _____ days Select one: a. 30 b. 45 c. 15 d. 60

a

Of the following which best describes Term Insurance? Select one: a. Temporary life insurance for a specific period of time. b. Death benefit plus cash value c. Endows at age 100 d. Medical exam is not usually required

a

Of the following which can be found in the Buyer's Guide? Select one: a. Explanation of Endowment Term and Whole Life policies. b. Full disclosure of all pertinent information. in the policy. c. Effective policy loan interest rate d. Net payment costs

a

Of the following, which can be found in the Buyer's Guide? Select one: a. Explanation of Endowment, Term and Whole Life policies. b. Full disclosure of all pertinent information. in the policy. c. Effective policy loan interest rate d. Net payment costs

a

A Non-participating policy pays dividends to: Select one: a. Policyholders b. Stockholders c. The insurance company keeps them d. Dividends do not exist in non-participants' policies

b

A business is the policy owner and the beneficiary would best describe what type of insurance policy? Select one: a. Buy-Sell Funding b. Key Person c. Executive Bonus d. Permanent

b

A child covered in this specialized policy may take over this policy at the predetermined age and pay premiums at original rate best describes: Select one: a. Joint Life b. Jumping Juvenile c. Increases death benefit policies d. Estate policy

b

A term policy that provides a level premium and a level death benefit during the entire term of the policy best describes: Select one: a. Annual Renewal Term b. Level Premium Term c. Decreasing Term d. Renewable Term

b

An employer has an arrangement with an employee for a wage increase in the amount of the premium on a new life insurance policy on the employee this example would best describe: Select one: a. Key Person b. Executive Bonus c. Buy-Sell Funding d. An illegal contract

b

Concerning Classification of Risks, individuals bearing the same health, habits and occupational characteristics fitting the insurer's guidelines without special restrictions or additional ratings, are classified as: Select one: a. Average b. Standard c. Preferred d. Substandard

b

Concerning Group Standard Provisions death benefit proceeds are paid to: Select one: a. The group sponsor only. b. A designated beneficiary. c. The employer d. The insurance company

b

Concerning Group Standard Provisions insurer gives policyholder an individual ____________ for each insured employee. Select one: a. Policy b. Certificate c. License d. Permit

b

In Life and Health Insurance insurable interest MUST be established at the _____________ . Select one: a. Time of loss b. Time of application c. Time of payment options d. Neither of the above.

b

Life insurance and Annuities that offer a definite benefit or set rate of return stated in the contract best describes: Select one: a. Variable Products b. Fixed Products c. Premium Products d. Lifetime Products

b

Market sensitive Life Insurance and Annuities where there is potential for either gain or loss without guarantee of performance best describes: Select one: a. Fixed Products b. Variable Products c. Premium Products d. Lifetime Products

b

Of the following which applies to a Joint Life policy: Select one: a. Age of the oldest insured determines the premium. b. Death benefit of policy is paid on the first person's death. c. It can only be written on minors d. It is an endowment

b

Of the following which applies to a Juvenile Life policy? Select one: a. It is a term policy b. Written on minors. c. The face value decreases d. It is an endowment

b

Of the following which is included in the Insurance Application? Select one: a. Advertising b. The Producer's Report c. Buyer's Guide d. Policy Summary

b

Policyholders receives a dividend which is legally defined as a refund of overcharge on premiums. This would describe which of the following? Select one: a. Non-participating policy. b. Participating policy. c. Regulated policy. d. Industrial Policy

b

The selling of a life insurance policy for less than face value allowing insured with a life-threating illness to obtain funds before death occurs best describes: Select one: a. Estate settlement b. Viatical settlement c. Buy-Sell funding d. This is not allowed

b

The type of flexible premium policy that can be changed from a term coverage to a permanent coverage without exchanging or lapsing the existing policy is: Select one: a. Universal Life b. Adjustable Life c. Whole Life d. Convertible Life

b

To provide general information of applicant's character habits finances best describes: Select one: a. Medical Information Bureau (MIB) b. Investigative Consumer (Inspection) Report c. The application d. A credit report

b

When soliciting prospective buyers of insurance agents are governed by rules and regulations referred to as: Select one: a. Practices and Principles b. Unfair Trade Practices c. Principles of Advertising d. None of the above.

b

Which of the following types of whole life policies provides immediate cash value? Select one: a. Limited Payment b. Single Premium Whole Life c. Continuous Life d. Term Life

b

A home mortgage cancellation term policy is an example of a/an: Select one: a. Annual Renewal Term b. Level Premium Term c. Decreasing Term d. Increasing Term

c

A level premium and face value until age 100 or death of insured best describes: Select one: a. Single Premium Whole Life b. Limited Payment c. Continuous Life d. Renewable Life

c

All of the following are TRUE about group life insurance policies EXCEPT: Select one: a. Evidence of insurability usually not required. b. Certificates of Insurance goes to the employee. c. Cost of plan determined by individuals age. d. Master policy goes to employer.

c

All of the following best describes Permanent Insurance (Whole Life) EXCEPT: Select one: a. It remains in effect to age 100 so long as premium is paid. b. It combines death protection with cash value. c. It provides coverage for the lowest premum d. The premiums remain level

c

All the following features best describe Industrial Home Service Life Insurance EXCEPT: Select one: a. Medical exam is usually not required. b. Premiums are payable on a weekly or monthly basis. c. Endows at age 100 d. Generally not a face value of $10000 or less

c

Concerning Substandard Risks, Adding a fixed additional charge best describes: Select one: a. Lien Plan b. Tabular Rating c. Flat Extra Premiums d. Preferred

c

Concerning Substandard Risks, mortality tables indicating the percentage amount increase of premium for certain impaired health conditions best describes: Select one: a. Flat Extra Premium b. Lien Plan c. Tabular Rating d. Rate-Up in Age

c

Coverage effective date application is approved to the insurer using the application date or the approval date as inception date of the policy. Select one: a. Conditional Insurability b. Unconditional Binding c. Conditonal Approval d. Unconditional Insurability

c

Immediate coverage for a specified time period until insurer formally rejects the application best describes a ________________ Receipt. Select one: a. Conditional Insurability b. Conditional Approval c. Unconditional Binding d. Unconditional Insurability

c

Insuring the risk of a class that is more prone to losses than the average risk is known as ____________ . Select one: a. Contributory plan b. Non-contributory plan c. Adverse Selection d. Law of large numbers

c

Life insurance to help survivors when a partner or shareholder dies would best describe: Select one: a. Executive Bonus b. Key Person c. Buy-Sell Funding d. Independent Insurance

c

State Law as well as the NAIC Model Life Insurance Solicitation Regulations, requires producer to provide all prospective buyers a _____________ before accepting a premium or deposit. Select one: a. Policy summary only b. Buyer's guide only c. Both Policy Summary and Buyer's Guide d. Either a Policy Summary or Buyer's Guide

c

The frequency in which the policyowner pays the premium refers to: Select one: a. Premium Regulation b. Premium Concept c. Premium Payment Mode d. Premium Status

c

Which of the following is NOT TRUE concerning Whole Life Insurance? Select one: a. Builds cash value b. Lifetime protection c. Temporary protection d. Endows at age 100

c

All of the following are TRUE concerning individual life insurance policies EXCEPT: Select one: a. Individual pays premium. b. Cost of plan determined by individuals age. c. Evidence of insurability is required. d. Policies are generally lower than group policies

d

All of the following best describes Renewal Term EXCEPT: Select one: a. It contains an option to renew the policy on the renewal date. b. Death benefit remains level. c. Premium increases. d. The policy face amount decreases

d

All of the following best describes Term Life Insurance EXCEPT: Select one: a. No cash value. b. Temporary protection. c. Written for a specified time period. d. Higher premium

d

All of the following factor(s) determine policy premiums EXCEPT: Select one: a. Mortality b. Interest c. Expense d. Marital status

d