Chapter 2
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
Any form of life insurance
What does "liquidity" refer to in a life insurance policy?
Cash value can be borrowed at any time
If an applicant for a life insurance policy is found to be substandard risk, the insurance company is most likely to
Charge a higher premium
Which of the following statements regarding HIV testing for life insurance purposes is NOT true
Insurers are barred from requesting HIV testing
The mode of premium payment
Is defined as the frequency and the amount of the premium payment.
All of the following factors that an underwriter could use to select and classify risk EXCEPT
National Origin
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
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contract
All of the following are personal uses of life insurance EXCEPT
buy-sell agreement
Which of the following is the best reason to purchase life insurance rather than annuities?
to create an estate
Which of the following best describes gross annual premium?
Net premium plus expenses
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 is usually true of a participating life insurance policy?
Pays dividends to the policy owners.
The content of a sales presentation written by a company's insurance agent is considered the responsibility of
The insurer
An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information?
application