Life Insurance - Basics QUIZ
Which statements are correct regarding the use of life insurance as an Executive Bonus?
Any type of insurance may be used, the employer pays a bonus to a selected employee to fund a policy, it is considered a non qualified employee benefit, the policy is owned by the employee.
As an example, a key person insurance policy can pay for?
Costs of training a replacement.
What is the best reason to purchase life insurance rather than annuities?
To create an estate?
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.
If a business owner becomes totally disabled, a Business Overhead Expense policy will pay...?
Utilities, employee payroll, and rent. They will NOT pay for the loss of the owner's income.
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health.
Attempting to determine how much insurance an individual would require based upon their financial objectives is known as?
Needs approach
During a pre-selection interview, and agent is allowed to...?
Terminate the interview and reject the applicant, Provide the applicants with negative information regarding their risk, inquire about specific details of the applicant's health history.
Which of the following is true regarding the needs approach method of determining the value of an individual's life?
The need is determined by the predicted needs of the family after the premature death of the insured, which must be assumed will happen immediately. The policy allows for the benefits to be collected upon the insured's death.
Which of the following can be included along with illustrations used to sell life insurance?
Rating information, Original death benefit, and name of insurer. Illustrations used to sell life insurance cannot use the term "Vanishing premium" or anything of that sort.
The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What should the insurer do with the application?
Return to the applicant for completion.
An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of?
Stranger-originated life insurance (STOLI).
