ExamFX Life Insurance Final Exam

Upon the last death

In a survivorship life policy, when does the insurer pay the death benefit?

The face amount is paid to the insured.

What happens to the face amount of a whole life policy if the insured reaches the age of 100?

Adjustable Life policies

allow for increases or decreases in the face amount or premium, as long as the premium is sufficient to pay for the mortality.

The premium is based on the age of each insured

True of Survivorship Life policy

6 months

With a Payor Benefit rider, the policyowner (payor) must be disabled for at least

Graded Premium

... a whole life policy with premiums that increase annually over the first 5 to 10 years.

Warranties

... are considered statements of fact or something guaranteed to be true.

$1,000

If the Commissioner orders the payment of a monetary penalty instead of suspension and revocation of license, what is the maximum penalty according to the state statutes?

The original age is used for premium determination.

What is the advantage of reinstating a policy instead of applying for a new one?

proof of insurability

Any increase in face amount requires

guaranteed

Under an indexed whole life policy, the premium is fixed, but the death benefit is...

Death benefits

Which of the following are NOT fundable by annuities?

The premium can be raised up to a guaranteed maximum rate

Which of the following is TRUE regarding an indeterminate premium whole life policy?

It is the period which the payments into the annuity grow tax deferred.

Which of the following is TRUE regarding the accumulation period of an annuity?

An accidental death rider

Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy?

One party accepts the exact terms of the other party's offer

Which statement best describes agreement as it relates to insurance contracts?

Universal life

Which type of life insurance policy allows the policy owner to pay more or less than the planned premium?

$50

Failure to notify the Commissioner of changes to a licensee's address within 10 business days may result in an administrative fee of

A Modified Endowment Contract

If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is

adjusted to the insured's age at the time of renewal

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy is renewed at the end of a specified period of time, the policy premium will be

annuity income

The annuitant is the person whose life the ______________ __________________ amount is determined.

(1) the policy, (2) a copy of the application, and (3) any riders or amendments.

The entire contract includes:

A Warranty

What guarantees that the information explained in the insurance contract is true?

180 days

What is the maximum duration of a temporary license?

At the time of policy delivery

If a life insurance policy contains a minimum 10-day unconditional refund provision (free look), when is the latest that the buyer's guide and policy summary must be delivered?

Guaranteed and Current

A Universal Life insurance policy has two types of interest rates that are called

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

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

The death benefit is not increased

All of the following statements about indexed whole life insurance EXCEPT...

Insures the life of a debtor

Credit Life insurance

The death benefit is taxable to the business

not true about key-person insurance

The Commissioner may hold hearings immediately after determining that a violation has occurred.

true regarding the insurance commissioner's powers related to hearings and investigations

60 days

A distribution fro an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvested in an IRA within

10 business days

An insurance agent changes his address. How long will the agent be given to notify the Department of Insurance?

premium

Grace period is a mandatory provision found in all life insurance policies that provides coverage for a period of time after the _____________________ becomes past due.

Applicants who may require a larger death benefit in the future should buy convertible term insurance

Incorrect regarding the type of term insurance that fits best with the applicant's needs

Income for 2 or more recipients until they die.

Life income joint and survivor settlement option guarantees

The SEC, the Insurance Dept., and the federal government.

Variable life policies are regulated by

Face amount

What does "level" refer to in 'level term insurance'?

Living longer than expected

What does an annuity protect the contract owner against?

Common Disaster Clause

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

The Annuitant

Which of the following indicates the person upon whose life the annuity income amount is determined?

joint life

What is the most common name for a single policy that is designed to insure two or more lives with a standard premium, and that pays the death benefit upon the first death?

the attained age of the insured.

If a level term product is renewed at the end of the term period the premium will be based upon

The agent

Whose responsibility is it to ensure that all questions have been answered on an insurance application?

will be waived

With a Payor Benefit rider, if the policyowner (payor) becomes disabled the premiums

Face amount

Premiums remain level with a decreasing term policy, only the ___________ ______________ decreases.

Accumulation of cash value

What do Modified Life and Straight Life polices have in common?

Modified life

What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy?

Backdating policies to secure a lower premium for the insured.

Which of the following would NOT be considered a misrepresentation on the part of the insurer?

An individual not covered by an employer-sponsored plan who has earned income.

Who can make a fully deductible contribution to a traditional IRA?

Whole life

A graded premium life insurance policy is a modified form of...

voiding

A breach of warranty can be considered grounds for ________________ the policy.

A buyer's guide

The entire contract includes all of the following EXCEPT...

(1) The death benefit is $0 at the end of the term (2) The contract pays only in the event of death during the term (3) There is no cash value (4) The face amount steadily declines throughout the duration of the contract

In a decreasing term policy

A policy is reissued with a reduction in cash value

According to the life insurance replace meant regulations, which of the following would be an example of policy replacement?

Family Income Policy

a policy that combines decreasing term insurance with whole life insurance to provide the insured's family with a monthly income upon the death of the insured, while maintaining permanent coverage until the end of the income payment?

Conditional

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

The insured may renew the policy for another 10 years, but at a higher premium rate.

An insure purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?

Grace period

An insured bought an insurance policy that requires him to pay $150 in premiums on the 15th of each month. He then takes an extended vacation and forgets to pay the premium. Ten days later, his policy is still in effect and has not lapsed. What policy provision allowed for this?

40

What is the number of credits required for fully insured status for Social Security disability benefits?

policy owners bear the investment risk, cash value is not guaranteed but minimum death benefit is guaranteed

in variable products

Be level thereafter

Graded-Premium Whole Life policy premiums are typically lower initially, but gradually increase for a period of 5 to 10 years. After the period of increase the premiums will

may be renewed for another like-term, or converted to permanent insurance, both without evidence of insurability.

Policies that are guaranteed renewable and convertible

Nonforfeiture option guarantees that the owner will receive a surrender value of the contract.

A prospective differed annuity owner is concerned about what would happen if he surrendered the annuity before the annuitization period. The agent most likely explained which of the following?

Continue to increase

A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will

Refund the premiums paid.

An insured committed suicide one year after his life insurance policy was issued. The insurer will