Life XII Life Insurance Policies

In regard to a Children's Term Rider, what happens when the covered child reaches a certain specified age? A. It depends on the Family Rider B. The premiums are increased C. Nothing D. Coverage is eliminated for that child

Coverage is eliminated for that child

Kelly has a life insurance policy with a face value of $100,000 and a Cost of Living Rider. The consumer price index has gone up 4%. How much may Kelly increase the face value of her policy? A. $4,000 B. $200 C. $40 D. $2,000

$4,000

Kelly has a life insurance policy with a face value of $100,000 and a Cost of Living Rider. The consumer price index has gone up 4%. How much may Kelly increase the face value of her policy? A. $40 B. $4,000 C. $2,000 D. $200

$4,000

Bill died and was insured by a $75,000 Whole Life policy that has a $10,000 cash value. How much will his primary beneficiary receive? A. $75,000 B. $10,000 C. $65,000 D. $65,000

$75,000

What are the two ways Joint and Survivor Options are written?

Joint and 1/2 Survivor or Joint and 2/3 Survivor

When may a beneficiary transfer their proceeds from their death benefit to another party under the Spendthrift Clause? A. A beneficiary may not transfer their benefits under the Spendthrift Clause B. A beneficiary may transfer their benefits after waiting 30 days C. A beneficiary may transfer their funds to pay a debt D. A beneficiary may only transfer their benefits under the Spendthrift Clause after satisfying a Probationary Period

A beneficiary may not transfer their benefits under the Spendthrift Clause

When may an eligible beneficiary select their settlement option? A. A beneficiary may select their benefit option if the beneficiary is revocable B. A beneficiary may never select their settlement option C. A beneficiary may select their benefit option if the policyowner of the policy died before making a settlement selection D. A beneficiary may only select their benefit option if the beneficiary is designated as irrevocable

A beneficiary may select their benefit option if the policyowner of the policy died before making a settlement selection

Rick has many dividend options with his Life insurance policy. Which of the following is not a dividend option? A. Buy additional insurance protection B. Cash C. Accumulate cash without interest D. Reduction in premium

Accumulate cash without interest

An applicant for insurance misstated her age at the time her Life Insurance application was taken. This misstatement may result in: A. No change B. Recession of her policy C. An automatic lapse of her policy D. Adjustment in her death benefit

Adjustment in her death benefit

Which of the following statements relates to the purpose of the Facility of Payment Clause? A. The funds are only provided to a primary beneficiary B. The funds are used to repay funeral expenses C. An insurer may pay an indemnity to a certain person that appears equitably entitled to the funds for funeral and medical expenses D. Half of the death benefit may be distributed to a person for funeral expenses

An insurer may pay an indemnity to a certain person that appears equitably entitled to the funds for funeral and medical expenses

Which mode will not require a service charge for administrative costs? A. Semi-Annually B. Weekly C. Annually D. Monthly

Annually

With Jack's Life insurance policy he is allowed to change his beneficiary designation. What policy provision will allow this? A. Absolute and Collateral Clauses B. Entire Contract Clause C. Assignment Clause D. Ownership Clause

Assignment Clause

Which Nonforfeiture Option will automatically be selected by the insurance company if the policyowner neglects to select

Extended Term

When an insurance company converts a lapsed policy to an Extended Term policy, what will be carried over from the original policy into the new policy? A. Death Benefit Amount B. Payor Benefit C. Waiver of Rider D. Face Value

Face Value

Term insurance has a higher premium than a whole Life policy. True or False A. True B. False

False

What is the manner or frequency that a policyholder pays their policy's premium? A. Modification B. Provision C. Grace period. D. Mode

Mode

What term relates to how often a policyowner pays their premium? A. Assignment B. Grace Period C. Frequency D. Mode

Mode

In relationship to an insurance program, what is considered to be an expense factor? A. Mortality costs B. Interest from an investment C. Collected late premiums D. Cost of business opportunity

Mortality costs

Which of the following riders provides for a Waiver of Premium when the policy owner and the insured are not the same person? A. Waiver of Premium Rider B. Payor Benefit Rider C. Systematic Waiver Rider D. Waiver of the Cost of Insurance Rider

Payor Benefit Rider

Which Nonforfeiture Option provides coverage for the longest period of time?

Reduced Paid up option

What dividend option decreases the annual payment of a policy? A. Interest and premium B. Reduction of premium C. Automatic Premium D. Indemnity

Reduction of premium

Jan bought 2 policies from N&G insurer. Her benefits have exceeded her maximum benefit amount. Which of the following will be the action of N&G? A. N&G will pay the benefits using a Split Dollar formula B. N&G will cancel the policies C. There will be a pro rata benefit reduction D. N&G will cancel 2 policies

There will be a pro rata benefit reduction

The Paid Up dividend Option allows an insured to earn interest and cash value to pay their policy up early. True or False? A. True B. False

True

What disability rider wives premium payments during a period of a disability?

Waiver of Premium

Which of the following relates to a Third Party ownership? A. When the beneficiary is a tertiary beneficiary B. When the beneficiary is a contingent beneficiary C. When the policy owner is someone other than an insured D. When an corporation is the irrevocable beneficiary

When the policy owner is someone other than an insured

William submitted a notice of claim to his insurer. Due to the fact that he didn't have a claim form he hand wrote a letter with the nature and extent of his loss and sent it to his insurer. Which of the following would be correct? A. His hand-written letter will not be valid B. William must send proof of his loss to the Commissioner C. His claim will not be paid because he didn't fill out a claim form D. William was compliant in following his claim

William was compliant in following his claim

What type of assignment is used to transfer rights temporarily to secure a debt? A. Paid Up Option B. Absolute C. Collateral D. Incontestable

Collateral

A beneficiary class designation would be best described as which of the following? A. A specific limited beneficiary B. Contingent C. Children of insured D. Secondary

Children of insured

John misstated his age on his life insurance application when it was issued, the insurer will adjust the amount of proceeds at the time of his ................... .

Claim

What is it called when a policyowner selects a group as a beneficiary without naming the group's individuals included to share the benefits? A. Per Cap B. Contingent C. Primary D. Class

Class

It was recently notice by a Life insurance company that a decreased insured, named Becky had understated her age at the time of her application 4 years earlier. How will this discovery affect how the insurer will handle the claim disbursement? A. The beneficiary will be due $0 because of the fraud B. The beneficiary will receive the original face amount and interest gained C. The beneficiary will receive reduced policy benefits D. The beneficiary will receive the original face amount

The beneficiary will receive reduced policy benefits

The purpose of an Automatic Premium Loan is to borrow against the cash value of the policy on pre-approved credit. True or False? A. True B. False

False

Mr. Smith has a policy and his wife is the beneficiary. They were both involved in a car accident coming home from work. Mr. Smith died at the scene of the accident, and Mrs. Smith died 20 days later. Why did their insurance company pay their death benefit to the contingent beneficiary of their estate? A. Estate beneficiary B. Common Disaster Clause C. Death Succession Clause D. Joint and Spouse Provision

Common Disaster Clause

What is the specified number of days a policyholder can view their policy and return it for a full refund? A. Grace Period B. Reinstatement C. Free Look D. Temporary Assignment

Free Look

What protects the lapse of a policy, if its premium is not paid on time? A. Incontestability B. Mode C. Grace Period D. Assignment of Premiums

Grace Period

Which Life Insurance Provision states that a company agrees not to use any error, concealment or misstatement on the part of an insured after their policy has been in effect for a certain period of time? A. Nonforfeiture B. Incontestability C. Participating D. Insuring clause

Incontestability

What type of insurance is most often used with the cost of Living Adjustment Rider?

Increasing Term

Which of the following applies to the ten day Free Look privilege? A. It can be waived only by an insurance company B. It permits an insured to return their policy for a full refund within 10 days C. It allows an insured ten days to pay the initial premium D> It is granted only at the option of an agent

It permits an insured to return their policy for a full refund within 10 days

The Payor Benefit Rider only waives the premiums in connection to what kind of insurance? A. Term B. Family Maintenance C. Juvenile D. Modified

Juvenile

Which clause states that the proceeds of a life insurance policy will be clear from an attachment or seizure by a beneficiary's creditors? A. Assignment B. Collateral C. Insuring D. Spendthrift

Spendthrift

The uniform Simultaneous Law state if the insured and primary beneficiary are killed in a common disaster it will be deemed that the insured died first.True of False A. True B. False

False

Leslie has set a certain dollar amount in which installments are to be paid to her. What settlement option did Leslie select? A. Pure Life Amount B. Fixed Amount C. Fixed Installment Amount D. Extended Amount

Fixed Amount

When the policy owner specifies a dollar amount in which installments are to be paid, the individual has chosen which settlement option? A. Life Income Period Certain B. Fixed Period. C. Extended Term D. Fixed Amount

Fixed Amount

Which Life Insurance settlement option provides the largest monthly income for a recipient? A. Fixed Amount B. Fixed Income C. Fixed Period D. Fixed Cash Amount

Fixed Amount

Jason has a $25,000 Whole Life policy with a cash value of $6,000. Under the Extended Term Nonforfeiture Option, what is the amount of insurance available to him? A. $20,000 B. $25,000 C. $0 D. $31,000

$25,000

If a primary beneficiary predeceases an insured's death, then the death benefit proceeds will be paid to which of the following? A. Contingent beneficiary B. The insured's estate C. The insured's wife D. Per Capita beneficiary

Contingent beneficiary

A policy will be voided if an insured commits suicide within what time from the effective date of their policy? A. 2 years B. 4 years C. 3 years D. 5 years

2 years

Mary made a mistake on her application and she stopped paying her premium. When would it be legal to deny her claim? A. 6 months after her issue date B. 2 years after her issue date C. Never D. 3 years after her issue date

2 years after her issue date

David wants to name his mom as the beneficiary on his health policy, but he wants to retain all of the policy's rights of ownership. What does this describe? A. Revocable B. Secondary C. Reversible D. Contingent

Revocable

In addition to the Children's Term, what other rider makes up the Family Term Rider? A. Spouse Term B. Living Needs Term C. Guaranteed Return of Premium Term D. Substitute Term

Spouse Term

A Life Insurance Settlement option is an option for: A. Making a policy loan B. Donating proceeds to charity C. Taking proceeds in other than a lump sum D. Accumulating dividends

Taking proceeds in other than a lump sum

What is the cash value converted to, under an Extended Term Option? A. The cash value is converted to Term Insurance with a higher face amount as the Whole Life Policy B. The cash value is converted to Term Insurance for the same face amount as the Whole Life Policy C. The cash value is converted to Term Insurance with a lower face amount as the Whole Life Policy D. The cash value is converted into a policy loan

The cash value is converted to Term Insurance for the same face amount as the Whole Life Policy