Chapter 6

A grace Period of _____ should be allowed for the payment of every premium after the first year, which may be subject to an interest charge.

1 month

An insurer must present a buyer's guide and policy summary prior to accepting the applicant's initial premium, unless the policy contains an unconditional refund provision lasting at least how many days?

10

Life insurance cost indexes are only useful when comparing a minimum of ___ similar policies

2

How soon must the insurer pay a death benefit claim after recieving the proof of death?

2 months

An insurer must keep a copy of each authorized form it uses until ____ years after the date of its last authorized use.

3

What document must be provided to the policyowner or applicant during policy replacement?

Notice Regarding Replacement

Excess of a company's net worth (extra capital remaining after all expenses are paid)

Surplus

Assuming that a policy doesnt contain an unconditional refund provision of at least 10 days, when must a buyer's guide and policy summary be provided?

before accepting the initial premium

What must be presented before an applicant submits a premium?

buyer's guide, policy summary

Exemptions to replacement include -_____ insurance -_____ insurance -existing insurer

credit life, group life

Revealed information to help someone make an intelligent and educated decision

disclosure

A payment made by a policy (distribution of profits or return of unused funds)

dividend

If a producer discusses policy dividends in a sales presentation, what statement must the producer also make?

dividends are not guaranteed

Policy termination due to nonpayment of premium

lapse

Policy components that aren't guaranteed in the contract or that may fluctuate (dividends, interest, etc)

nonguaranteed elements

Policyowners are entitled to return of dividends (mutual company policies)

participating policies

What rule would apply if an agent knows an applicant is goingto cash in an old policy and use the funds to purchase new insurance?

replacement rule

A company owned or controlled by another company

subsidiary