big test

The term "illustration" in a life insurance policy refers to

A presentation of nonguaranteed elements of a policy.

In classifying a risk, the Home Office underwriting department will look at all of the following EXCEPT

Applicant's past income.

An insurance contract must contain all of the following to be considered legally binding EXCEPT

Beneficiary's consent.

What is another name for interest-sensitive whole life insurance?

Current assumption life

The term "fixed" in a fixed annuity refers to all of the following EXCEPT

Death benefit

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?

It will increase because the insured will be 5 years older than when the policy was originally purchased.

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount.

The premium of a survivorship life policy compared with that of a joint life policy would be

Lower.

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

What describes the specific information about a policy?

Policy summary

The Federal Fair Credit Reporting Act

Regulates consumer reports.

Which of the following is NOT one of the three basic types of coverages that are available, based on how the face amount changes during the policy term?

Renewable

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must

Respond to the consumer's complaint.

Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?

SEPs are suitable for large companies.

Which type of life insurance policy generates immediate cash value?

Single Premium

The interest earned on policy dividends is

Taxable. Dividends are a return of unused premiums on which the insured has already paid taxes. Any interest earned is taxable as ordinary income.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy.

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education.

The responsibility of making certain that an application for insurance is filled out completely, correctly, and to the best of his or her knowledge is the responsibility of whom?

The producer

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be included in the policy.

Which of the following products requires a securities license?

Variable annuity

An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with the upcoming medical expenses. What option could the insured utilize?

Viatical settlement