exam fx life and health

what is the income period after the children are no longer dependent upon the surviving spouse for support but before the surviving spouse qualifies for social security survivor benefit

preretirement period

what is not considered an income period

income dependency period

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT

the policy is owned by the company

which of the following life insurance policies allow a policy owner to take out a loan from the policies cash value

variable universal life

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

For 20 years or until death, whichever occurs first.

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

The benefit is received tax free.

Which of the following statements about group life is correct?

The cost of coverage is based on the ratio of men and women in the group

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract.

Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?

the employer is the owner and beneficiary

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Limited pay whole life

When is the earliest a policy may go into effect?

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

What would a 20 pay whole life policy and endow?

When the insured reaches age 100

Which of the following is an example of a limited-pay life policy?

life paid up at age 65

what is the purpose of key person life insurance

to lessen the risk of financial loss because of the death of a key employee

if an insured terminated membership in group life insurance, to what type of insurance can the insured convert the coverage

whole life

What percentage of a company's employees must take part in a noncontributory group life plan?

100%

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

An insured owns a term policy with a guaranteed renewable option. When the end of the policy draws near, the insured answers medical questions in order to prove insurability and qualifies for a discounted premium rate. Which option best describes this scenario?

Re-entry

Annually renewable term policies provide a level death benefit for a premium that

increases annually

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?

$100,000

Which of the following features of the Indexed Whole Life policy is NOT fixed?

Cash value growth

the death benefit under the universal life option B

Gradually increases each year by the amount that the cash value increases.

All of the following are true of key person insurance EXCEPT

The plan is funded by permanent insurance only.

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account.

An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his

attained age

in variable universal life insurance, to what policy component does the term variable refer

cash value and death benefit

If an employee wants to join group life insurance coverage outside of the open enrollment period, what would the employee have to provide?

evidence of insurability

Which policy component decreases in decreasing term insurance?

face amount

All of the following are business uses of life insurance EXCEPT

funding against company's general financial loss

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?

Any form of life insurance

All of the following are true of key person insurance EXCEPT

the plan is funded by permanent insurance only

Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?

withdrawals are not taxable

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

Executive is the owner, and the executive pays the premium.

When an employee terminates coverage under a group insurance policy, coverage continues in force

For 31 days.

what type of whole life insurance policy generates immediate cash value

single premium whole life

Which of the following types of policies allows for a flexible premium and a variable investment component?

variable universal life insurance

In a group life insurance policy, the employer may select all of the following EXCEPT

the beneficiary

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?

100% participation of members is required in noncontributory plans.

what are the characteristics of the group that underwriters will consider before issuing a group policy

group purposes, size, financial strength and turnover

a policy states that it will pau a specified face amount 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?

20- year level term

Which of the following policies typically combine insurance and savings with a date of maturity earlier than age 100 at great expense to the policyholder?

Endowment at age 65

what are the two components of a universal policy

Insurance and cash account

What is the purpose of the 7 pay test?

It determines if the insurance policy is MEC.

what is called a second to die life insurance policy

Survivorship life

In a group life insurance policy, the employer may select all of the following EXCEPT

The beneficiary

A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why?

The purpose of the group was to purchase life insurance

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?

The insured may renew the policy for another 10 years, but at a higher premium rate.

an individual has just borrowed 10k on a 5-year not from his bank. the note is due in installments. what type of insurance policy would be best suited to this situation

decreasing term

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured Straight Life policies charge a level annual premium for the lifetime of the insured and provide a level, guaranteed death benefit.

An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?

A limited pay life

What does "level" refer to in level term insurance?

Face amount

Which of the following statements is TRUE concerning whole life insurance?

Lump-sum death benefits are not taxable.

An insured has a Level Term Life Insurance policy that is guaranteed renewable and also includes a re-entry provision. The re-entry provision would allow the insured to renew the policy and

Pay a lower renewal premium by proving insurability.

Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?

Premiums are not tax deductible as a business expense.

a corporation is the owner and beneficiary of the key person life policy if the corporation collects the policy benefit then

the benefit is received tax free

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT

The policy is owned by the company.

Your customer doesn't mind paying a higher premium as long as he gets a life insurance product that would allow for a faster growth of the cash value. What kind of policy would you recommend?

an endowment policy

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A Under Option A, the death benefit remains level while the cash value gradually increases. The death benefit will increase at a later date in order to maintain a gap between the cash value and the death benefit before the policy matures.

In a survivorship life policy, when does the insurer pay the death benefit?

upon the last death

what type of agent authority is also perceived authority

apparent

what is the purpose of a 7 pay test

determines if the insurance policy is MEC

What universal life option has a gradually increasing cash value and a level death benefit?

option A

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?

It will increase because the insured will be 5 years older than when the policy was originally started

The premium of a survivorship life policy compared with that of a joint life policy would be

lower Survivorship Life is much the same as joint life in that it insures two or more lives for a premium that is based on a joint age. The major difference is that survivorship life pays on the last death rather than upon the first death. Since the death benefit is not paid until the last death, the joint life expectancy in a sense is extended, resulting in a lower premium than that which is typically charged for joint life.

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

can be increased by showing interest of insurability

what happens to the premium in an annually renewable term life policy

the premium increases with each renewal

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?

She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.

Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?

a buy-sell agreement

If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?

jumping juvenile policy

how is the determined in a joint life insurance policy

the premium is based on the average age of the insureds