Tennessee Life insurance
limited-pay life
An insured has a life insurance policy that requires him to only paypremiums for a specified number of years until the policy is paid up. What kind of policy is it?
Pay a reduced death benefit
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
$200,000
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?
Mutual
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
Inspection Report
An insurer receives a report regarding a potential isured that includes the insured's financial status, hobbie and habits. WHat type of report is thi?
Rated
Another name for a substandard risk classification is
Consumer report
Provides the underwriter with the information about an insurance applicant's credit?
At least 1,000 employees
SIMPLE Plans require all of the following EXCEPT
Coverage ends and the policy cannot be reinstated
What happens when a policy is surrendered for its cash value?
One-sided: only one party makes an enforeable promise
What is a definition of a unilateral contract?
Common disaster clause
What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?
They have a guaranteed minimum interest rate
Which of the following is a similarity between equity indexed annuities and fixed annuities?
LIfe Paid-up at Age 65
Which of the following is an example of a limited-pay life policy?
Pay-in period
Which of the following is another term for the accumulation period of annuity?
Survivorship life
Which of the following is called "second-to-die" policy
Straight Life
Which of the following policies would be classified as a traditional level premium contract?
life expectancy
Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?
Term rider
Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?
Payoff Benefit Rider
Which of the folowing would NOT cause the Death Benefit to increase?
cash value
a policy's savings element or living benefit
qualifieid plan
a retirement plan that meets IRS guidelines for receiving favorable tax treatment
Face amount
the amount of benefit stated in the life insurance policy
Endow
the cash value of a whole life policy has reached the contractual face amount
The insured's premiums will be waived until she is 21.
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums
If the father is disabled for more than 6 months
A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?
The full death benefit
A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy?
Required a premium increase each renewal
A man decided to purchase a $100,00 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered his policy
THe policy will be interpreted as if the insurer waived its right to have an answer on the application
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be true?
Any form of life insurance
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
Considered true to the best of the applicant's knowledge
Representations are written or oral statements made by the applicant that are
When the income payments begin
The main difference between immediate and deferred annuities is
Joint LIfe
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting business. What type of insurance would be the most afordable and still provide a death benefit should one of them die?
insuring clause
Which provision of a life insurance policy states that the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?
Its premium steadily decreases over time, in response to its growing cash value.
Which statement is NOT true regarding a Straight Life policy
The employer is the owner and beneficiary
Who is the owner and who is the beneficiary on a key person life insurance policy?
Single Premium
Which type of insurance policy generates immediate cash value?
Universal Life
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
An individual not covered by an employer-sponsored plan who has earned income
Who can make a fully deductible contribution to a traditional IRA?
level premium
the premium that does not change throughout the life of a policy
Whole Life
which of the following types of insurance policies would perform the function of cash accumulation?
Deferred
withheld or postponed until a specified time or event in the future
Reduction of premium
The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?
A presentation of nonguranteed elements of a policy
The term "illustration" in a life insurance policy refers to
Convertible Term Policy
The type of policy that can be changed from one that does not accumulate cash value to the one that does, is a
Joint and survivor
The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called
An insured is diagnosed iwth cancer and needs help paying for her medical treatment
Under which of the following circumstances would an insurere pay accelerated benefits?
It would not occur in a deffered annuity
Which of the following is NOT true regarding the accumulation period of an annuity?
It commences when the policy is delivered
Which of the following is true about the mandatory free look in a life insurance policy?
An annuity
Which of the following products income for a specified period of years or for life, and protects a person against outliving his or her money
Variable annuity
Which of the following products requires a securities license?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated
Which of the following statements about the reinstatement provision is true?
Buy-sell agreements are normally funded with a life insurance policy
Which of the following statements concerning buy-sell agreements is true?
suitability
a requirement to determine if an insurance product is appropriate for a customer
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
an agent an 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?
conditions
because an insurance policy is a legal contract, it must conform to the state law governing contracts which require all of the following elements EXCEPT
Nonforfeiture values
benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses
Variable life insurance
contracts in which the cash values accumulate based upon a specific portfolio of stocks without guarantees of performance
Fixed Life insurance
contracts that offer guaranteed minimum or fixed benefits
Liquidation of an estate
converting a person's net worth into a cash flow
attained age
the insured's age at the time the policy is issued or renewed
Joint LIfe policy
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?
Automatic premium loan
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?
survivor 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 is a personal use of life insurance known as
Pay the policy proceeds only if it would have issued the policy.
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan
All of the following are examples of third-party ownership of a life insurance policy except
They must be part of the contract
All of the following are requiements for life insurance illustrations EXCEPT
Annuitization period
In an annuity, the accumulated money is converted into a stream of income during which time period?
An index like Standard & Poor's 500
The minimum interest rate on an equity indexed annuity is often based on
Proof of insurability is not required
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. What will she need to provide for proof of insurability?
Separate accounts
A domestic insurer issuing variable contracts must establish one or more
A level annual premium for the life of the insured
A straight Life policy has what type of premium
Seek higher returns.
Equity Indexed Annuities
Return the application to the applicant for a signature
If an agent fails to obtain an applicants signature on the application, the agent must
The death benefit will be smaller
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of terminal illness, how will that affect the payable death benefit from the policy?
Upon the last death
In a survivorship life policy, when does the insurer pay the death benefit?
Securities
financial instruments that may trade for value
policy maturity
in life policies, the time when the face value is paid out
Dividends amounts are guaranteed in the policy
All of the following statements concerning dividends are true EXCEPT
Transfer of all ownership rights in a policy
An absolute assignment is a..
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.
An employee has group life insurance through her employer. After 5-years, she decides to leave the company and work independently. HOw can she obtain an individual policy?
$10,000, no tax consequences
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequences of a direct transfer
100,000
An individual purchased a $100,000 JOint LIfe policy on himself and his wife. Eight years later, he died in an automobile accident. HOw much will his wife receive from the policy?
50,000
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
Universal life
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
Interest-sensitive Whole LIfe
An insured purchased a Life insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The Policy is an
Level fixed
Variable Whole life insurance is based on what type of premium?
Coverage until death or age 100
What characteristic makes whole life permanent protection?
Face amount
What does "level" refer to in level term insurance?
It is intended to provide coverage on a date earlier than the date of the issuance of the policy.
What is the purpose of a conditional receipt?
To provide a guaranteed income for a certain amount of time
What is the purpose of a fixed-period settlement option?
It allows the insured to reject the policy with a full refund
What is the purpose of a free-look period in insurance policies
Interest only
When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?
Purchase a single premium policy for a reduced face amount
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
Return the application to the applicant for completion
Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?
Reduced paid-up
Which nonforfeiture option provides coverage for the longest period of time?
The recommended amount to keep the policy in force throughout its lifetime
Which of the following best defines target premium in a universal life policy?
Owner's Rights
Which of the following explains the policyowner's right ot change beneficiaries, choose options, and receive proceeds of a policy?
Renewable
Which of the following is NOT one of the 3 basic types of coverages that are available, based on how the face amount changes during the policy term?
They earn lower interest rates than fixed annuities
Which of the following is NOT true regarding Equity Indexed Annuities?