A.D Banker Exam 3

Z suffers a total and permanent disability. The policy he has requires a premium payment of $100 per month. He is on claim for 100 months. Initially, how much did Z have to pay before the waiver of premium benefit on his policy started?

$600

C has a $100,000 traditional whole life insurance policy with a $30,000 cash surrender value. What is the insurer's net amount at risk?

$70,000

Which of the following Whole Life insurance policies has the highest annual premium payment per $1,000 of coverage for a 35-year-old, all other factors being equal?

20-Pay Ordinary Whole Life

The waiver of premium rider normally expires at age:

65

If a universal life policy with the increasing death benefit option has an initial face amount of $75,000 and cash value of $10,000, the actual death benefit would be:

85,000.00

Jacob owns a policy that pays a death benefit only if he dies within the 20-year policy period. If Jacob dies anytime that the policy is in force, his beneficiary will receive $100,000. The premium that Jacob pays for this policy will be the same throughout the 20-year policy period. Jacob owns:

A Level Term policy

All of the following are typical exclusions for coverage under an accelerated death benefit rider, except:

AIDS

The cash value of a permanent life insurance policy can be used for all of the following, except:

Accidental death benefits

all of the following are true in general about riders, except?

All riders are provided for as long as the policy is in effect

How often can adjustments be made to Adjustable Life?

Annually

Premiums for a variable universal life policy:

Can vary in amount as well as payment schedule

Which of the following term life insurance policies cannot be renewed?

Decreasing

Which of the following is TRUE regarding an Adjustable Life Policy if the insured chooses to increase the face amount in the future?

Evidence of insurability would be required

Ed purchased policies on behalf of his grandchildren. He wanted to be certain they could purchase additional policies at specified ages. He was able to do this by adding which rider?

Guaranteed Insurability Rider

This rider allows for the insured to obtain additional insurance in between the specified ages including marriage and the birth or adoption of a child, when the need for insurance coverage may increase without having to prove insurability. It is called the ________ rider:

Guaranteed insurability

All of the following are true regarding Current Assumption Whole Life, except:

If current rates decrease, the policyowner pays reduced premiums, or the cash values will grow faster

The Return of Premium Rider, the Return of Cash Value Rider, and the Cost of Living Rider all use which type of term insurance to accomplish their objective?

Increasing Term

Which of the following life insurance policies has a current and guaranteed maximum premium stated in the policy?

Indeterminate Premium Life

All of the following policies end when an insured dies, except:

Joint Survivorship

Which of the following policies is designed to be used in estate planning to pay estate taxes for married couples?

Joint Survivorship Life Policy

Quentin, age 65, has a life insurance policy he no longer needs and no longer can afford, but he does have a need for cash. XYZ Inc. purchased his policy for less than the face amount but more than the cash value and is now the policyowner and premium payor. This was which of the following transactions?

Life Settlement

With regard to the waiver of premium rider, after the disability a policyowner normally:

Need not repay the premiums paid by the company during disability

Whole Life is also known as ________ protection.

Permanent

all of the following are true of re-entry term, except?

Re-entry is allowed without proof of insurability

Which of the following IS true regarding a Living Need (Accelerated Benefit) Rider?

Reduces the death benefit by the amount withdrawn

Which Whole Life policy would require you to put the least amount of premium into the plan over the total life of the plan?

Single Pay/Premium

which of the following is not a form of permanent life insurance coverage?

Term to age 70

One of the greatest advantages of convertible and renewable term policies is that:

The insured is not required to show proof of insurability in order to renew or convert

Should an insured become totally and permanently disabled two months before the cut-off date for the waiver of premium rider:

The insured remains eligible for all provisions

All of the following statements regarding the Living Needs Rider are true, except:

The insurer charges an annual premium for this rider which creates a pool of money from which to pay out the benefit

Equity Universal, Variable, and Variable Universal all have which of the following characteristics in common?

The overall policy performance has something to do with the stock market in general

Which of the following statements is correct regarding a Waiver of Premium Rider on a participating whole life policy?

The premiums are waived until either the insured recovers from the disability, the policy achieves paid-up status, or the insured dies

A Universal Life insurance policy is similar to a Whole life policy in which of the following ways?

They are both supported by the insurer's general account

First-to-die and last-to-die life insurance policies have in common all of the following, except:

They both continue in force after one of the named insureds dies

If a policyowner has a whole life insurance policy with a disability waiver of premium rider, when does the rider benefit start if a qualifying disability should occur?

Typically 6 months after the disability occurs

Which of the following pays a current interest rate and also guarantees a minimum interest rate that will be credited to the cash values of the life insurance policy?

Universal Life

How would a term policy normally be used to pay off a mortgage upon death?

Using the death proceeds after the insured has died

Which of the following policies requires a producer to have both a life and securities license to sell?

Variable Universal

All of the following are considered specialized policies, except:

Whole life

The net amount at risk to the insurance company at the endowment date is:

Zero

Ordinarily, who would not be the owner of a juvenile policy from the outset?

a brother or sister

An indeterminate premium whole life policy has _______ premiums.

adjustable

how often can adjustments be made to adjustable life

annually

With equity-indexed life, the interest credited to the policy is:

based on a percentage of the increase in a stipulated stock index

loan values and retirement income are?

called the living benefits of life insurance

A client wants to make sure that they can have a permanent life insurance policy several years from now when they can afford it without having to prove insurability. What feature should they make sure they have on their new term life insurance policy?

convertibility

In order for a death benefit to be paid to a beneficiary, with of a 15-pay Whole Life Policy, the insured must pay premiums:

for 15 years, or until the insureds death, which occurs first.

Which of the following riders can be used to cover the life of an additional insured who is an unrelated business partner?

nonfamily rider

An insured owning an Adjustable Life Policy enjoys a policy that has characteristics of both ______ and _______.

permanent and term

The nonforfeiture option that provides the least amount of coverage is:

reduced paid-up

Individual Term policies are generally stand-alone policies, but may be written with other types of policies as a(n):

rider

in many jurisdictions, permanent policies are required to have some cash value by the end of?

the third year

A __________ is a contractual agreement that allows a company or person to buy one or more of the rights of ownership in a life policy on the life of another person, should the owner/insured become terminally ill.

viatical settlement