Dri 10.3
In which type of a group life insurance plan, the employee pays part of the premium?
Contributory
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
Conditions.
Any regularly salaried employee of a licensed insurer, without license or other qualification, may act on behalf of that insurer in the negotiation of insurance for that insurer, provided
A licensed producer participates in the sale of insurance
An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?
A portion of the benefit up to a limit is tax free; the rest is taxable income.
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
An insurance contract must contain all of the following to be considered legally binding EXCEPT
Beneficiary's consent.
Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?
Buy-sell agreement
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated.
Which of the following is NOT typically excluded from life policies?
Death due to plane crash for a fare-paying passenger
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
Equal to the original policy for as long as the cash values will purchase.
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an
Interest-sensitive Whole Life.
Which of the following is true of a children's rider added to an insured's permanent life insurance policy?
It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age.
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?
Making comparisons between different policies
All of the following are characteristics of group life insurance EXCEPT
Premiums are determined by the age, sex and occupation of each individual certificate holder.
If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?
The balance of the loan will be taken out of the death benefit.
When determining the suitability of a life insurance policy or annuity contract, the agent must consider all of the following, EXCEPT
The commissions payable on such policy or contract.
The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as
The policy contains sufficient cash value to cover the cost of insurance.
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
Twisting.
Which of the following is an example of an unfair claims settlement practice?
Failure to promptly settle a claim when liability has been clearly established
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
Purchase a single premium policy for a reduced face amount.
