stimulate your exam
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
When an annuity is written, whose life expectancy is taken into account?
Annuitant
An insurance contract must contain all of the following to be considered legally binding except
Beneficiary's consent
Which of the following best describes fixed-period settlement option?
Both the principal and interest will be liquidated over a selected period of time.
what happens when a policy is surrendered for it's cash value?
Coverage ends and the policy cannot be reinstated
What is another name for interest-sensitive whole life insurance?
Current assumption life
Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?
Return the application to the applicant for completion
Which type of life insurance policy generates immediate cash value?
Single Premium
Which of the following would help prevent a universal life policy from lapsing?
Target premium
Nonforfeiture values guarantee which of the following for the policyowner?
That the cash value will not be lost
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?
The insured may choose to convert to term or permanent individual coverage.
which of the following is true regarding taxation of accelerated benefits under a life insurance policy?
They are tax free to terminally ill insured. When accelerated benefits are paid under a life insurance policy, they are received tax free by terminally ill insured, and tax free up to a limit for chronically ill insured.
what is the purpose of buyers guide?
To allow the consumer to compare the costs of different policies
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
In forming an insurance contract when does acceptance usually occur
When an insurer's underwriter approves coverage
When may an insurance company use suicide as a defense against paying a death claim?
When death occurs within a specified period of time after the policy was issued.
When would a 20-pay whole life policy endow?
When the insured reaches age 100
When the policy owner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?
a fixed amount
For a retirement plan to be qualified, it must be designed for whose benefit?
employees
the interest earned on policy dividends is
taxable
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
the employer is the owner and beneficiary
Which of the following allows the insurer to relieve a minor insured from premium payments if the minors parents have died or become disabled?
Payor Benefit
A rider attached to a life insurance policy that provides coverage on the insureds family members is called?
Other-insured rider
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
Which policy component decreases in decreasing term insurance?
Face amount
What type of insurance would be used for a Return of Premium rider?
Increasing Term
Which of the following policy components contains the company's promise to pay?
Insuring clause
what is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection
Which of the following is true regarding the accumulation period of an annuity?
It is a period during which the payments into the annuity grow tax deferred.
Which of the following statements is true about policy assignment?
It transfers rights of ownership from the owner to another person.
A married couple owns a permanent policy which covers both their lives and pays the death benefit only upon the death of the first insured. Which policy is that?
Joint Life Policy
Which two terms are associated directly with the premium?
Level or flexible
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
Level term