Set 2
In whole life insurance, when is the policy cash value scheduled to equal the face amount?
At the insured's age 100
Who would be allowed catch-up contributions into an IRA plan?
Individuals age 50 or older
What would the insurance company do if an insured under whole life policy with an accidental death rider intentionally kills himself a couple of months after purchasing the policy?
Deny the death benefit, but refund the premium
Individual members covered by group life insurance receive
A certificate of insurance
Participating under a group life insurance plan are issued
Certificate of Insurance
At what point would an automatic premium loan be generated?
Following the grace period
In this state the owner's gets a "free look" of a specified number of days from
Delivery of the policy
Answers to questions in an insurance application are called representation and, as such, they are
Believed to be true to the best of the applicants knowledge
Which distributions from a Modified Endowment Contract would be taxable as income at the time received to the extent that the cash value of the contract immediately before the payment exceeds in the contract?
Both partial cash surrender and policy loan
Decreasing Term insurance is often used to
Cover a mortgage
Dividends received on participating life insurance policies are
Not taxable because they are a return of unused premiums
Which statement best describes agreement as it relates to insurance contracts?
One party accepts the exact terms of the other party's offer
The purpose of the Fair Credit Reporting Act is to
Protect consumers against the circulation of inaccurate or obsolete personal or financial information
What does the application of contract of adhesion mean?
Since the insured does not participate in preparing the contract any ambiguities would be resolved in favor of the insured
An individual receives a lump-sum inheritance. He'd like to use the money to create a lifetime income since he'll be retiring soon. He purchases an annuity and wishes to receive payments beginning in 2 months. What did he buy?
Single Premium Immediate Annuity
All of the following are consideration in an insurance policy EXCEPT
The cash value in the policy
What happens to the face amount of a whole life policy if the insured reaches the age of 100?
The face amount is paid to the insured
According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?
The primary beneficiary died before the insured
When a settlement option is chosen at death, how are the monthly income payments taxed?
The principal portion is generally income tax-free while the interest portion is taxed as ordinary income
If the policy summary for a life insurance policy is not given when the application is taken, when must the policy summary be given to the policyowner?
When the policy is delivered
