Life Final Exam

An Ordinary Straight Whole Life policy provides for:

a level premium, level face amount, and cash accumulation until the policy matures

The permanent transfer of ownership in a policy is called:

absolute assignment

Variable whole life includes all of the following features except:

annual renewable term insurance

Which provision will assure that the life insurance policy premiums are deducted from the cash value if the premiums are not paid directly by the owner at the end of the grace period?

automatic premium loan

All of the following are required to sign an application for insurance except:

beneficiary

A substandard risk may be issued based on any of the following except:

longer than expected life expectancy

If a change or correction must be made on the application for insurance, which of the following applies?

the producer can make the change and the applicant must initial the change

Which of the following policies will provide for a flexible premium, adjustable death benefit, and a guaranteed minimum interest to be credited to the general account if the current rate falls to the minimum rate?

variable universal life

Evidence of group life insurance coverage provided to an employee is the:

certificate of insurance

The owner's rights include all of the following except:

choose the mortality rate

A receipt issued at the time of application upon the payment of premium that provides coverage effective as of the date of the application or medical exam, as long as the policy is issued as applied, is referred to as a:

conditional receipt

The settlement option under which payments totaling the death benefit are guaranteed for a specific number of years is referred to as:

fixed period

Which of the following is not one of the 4 elements of valid legal contract?

incompetent parties

Which of the following statements regarding insurable interest is not correct?

insurable interest only applies to individuals related by blood

The Waiver of Premium rider will waive the premium after a specified waiting period if the:

insured becomes disabled

The insuring clause found in a life insurance contract states the:

insurer's promise to pay death benefits as long as all conditions are met

The insured cannot borrow against the loan value of the policy without the permission and consent of which of the following, if named?

irrevocable beneficiary

All of the following are correct regarding Annual Renewable Term except:

it matures at age 100

A business is concerned that if its top sales producer dies suddenly, the company will suffer a loss due to this loss in expertise, productivity, revenue, and the costs associated with finding a replacement. Which of the following will meet this business use of life insurance?

key person life insurance

All of the following are correct regarding taxation of individual life insurance except:

policy loans are considered an investment and are always taxable

If an insured commits suicide while the suicide clause is in effect, the insurance company will:

refund the amount of premiums paid

A transaction in which a life policy is purchased when an existing policy is surrendered is called:

replacement

Statements made by the applicant on a life or health insurance application are true to the best of one's knowledge are considered to be:

representations

A lump sum of money is placed into an account from which the annuitant will draw periodic benefits the following month. This describes a:

single premium deferred annuity

If the primary beneficiary predecreases the insured, the death benefit is payable to the

the contingent (or secondary) beneficiary