Quiz: Life Insurance Basics

Pay the policy proceeds only if it would have issued the policy

Prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Allow to compare policy prices

Purpose of buyer's guide

Inspection Report

Report w/ insured's financial status, hobbies, and habits

With the policy

Policy includes free-look period of at least 10 days, the Buyer's Guide may be delivered to an applicant no later than

Permanent

Policy w/ cash value

Viator

Policyowner of a life insurance policy who is also the insured is diagnosed w/ a terminal illness, so he sells the policy to a viatical company in order to pay med bills. What term best describes the policyowner's role in this transaction?

Monthly

Premium modes result in the highest annual cost for an insu policy

As of the application date

Premium w/ app, but the policy was issued two weeks later as requested. When does the policy coverage become effective?

Application

Primary source of info used for insurance underwriting

Replacement Rule

Rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance

Buy-Sell Agreement

Personal uses of LI EXCEPT

20 days

A policyowner has sold his LI policy to a viatical settlement provider. How long does the policyowner have to inform the policyowner's insurer that his life policy has been viaticated?

Survivorship protection

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This personal use of LI known as

30 days

Insurers must notify the Commissioner's office as to whether or not a life insu policy will be marketed w/ illustrations. Cert of that notification must be provided annually within how many days of the anniversary of the original certification?

Return the application to the applicant for signature

Agent fails to obtain an applicant's signature on the app, the agent must

Obtain a list of all LI policies that will be replaced

During replacement of LI, a replacing insurer must do which of the following

When the application is signed and a check is given to the agent

Earliest a policy may go into effect?

Variable

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

Attending Physician Statement

An underwriter is reviewing the medical questions in the application and needs further info due to medical situation the applicant had in the past. What will the underwriter require?

Rated

Another name for substandard risk classification

Application

Insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting info

Needs approach

Attempting to determine how much insurance a family would require based upon their financial objectives is known as

Predicted needs of the family after the insured's death

Based on Human Life Value Approach, which of the following is NOT used to calculate the individual's life value

To create an estate

Best reason to purchase LI rather than annuity

Buy-sell agreements are normally funded w/ a life insurance policy

Buy-sell are true

Executive is owner, executive pays premium

Executive Bonus plan, who is the owner of the policy, and who pays the premium

Disclosure Statement in LI policies

Explains features and benefits of a proposed policy to the consumer

$300

Fee paid by a viatical settlement provider for initial licensing

3 years

How long must insurers maintain the evidence from the agent that a disclosure statement about a LI policy was delivered to the applicant?

Once every 3 months

How often may a viatical settlement provider contact an insured regarding the insured's health status if the insured's life expectancy is more than one year?

Terminally Ill

Illness that causes D within 24 months

Applicant's past income

In classifying risk, Home Office underwriting department will look at the following EXCEPT

An unfair trade practice

Insu company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

Conditional Receipt

It is intended to provide coverage on a date prior to policy issue

To avoid incr in premium for insured

LI producer backdate an LI policy

Permanent

Life time protection against premature death

Debtor on life of creditor

NOT an ex of valid insurable interest

Vacation

NOT fall into category of costs associated w/ death

Medical Background

NOT included in the General Information section of the application for insurance

The seller must be terminally ill

NOT true of life settlements

Need is predicted using the number of years until the insured's retirement

NOT true regarding needs aprroach of determining the value of an individual's life

2 years

Once a mail-order solicitation has been filed, how long may it be used?

Employer is owner and benef

Owner and beneficiary on a Key Person LI

Other insurance coverages

Part 2 of the application for LI provides questions regarding all of the following EXCEPT

Producer's report

The insu company underwriter could find info concerning the personal activities and character of an applicant from which of the following reports?

Viatical Settlement Broker

To negotiate contracts btwn viatical settlement providers and viaotrs, on the behalf of viators

The creditors have rights to the proceeds if they can show evidence of valid assignment

True concerning the creditors of the deceased insured

Substandard risk

Type of risk w/ highest premium

The policy is owned by the company

Use of LI as an Executive Bonus are correct EXCEPT

20 days

Viatical settlement provider transfers ownership of an insurance policy, how long does the insurer have to inform the insured of the change?

Fines of up to $1,000 for each act

Violations of unfair discrimination law may result in all of the following penalties EXCEPT

Producer's Report

Where would the underwriter find relevant info not presented by the applicant on the insurance application but communicated by the producer

Insurers

Who makes up MIB