Life and health

All of the following statements concerning dividends are true EXCEPT a) Dividend amounts are guaranteed in the policy. b) Lower insurance company costs generate higher dividends. c) They stem from favorable underwriting experience. d) Favorable investment results generate higher dividends.

Dividend amounts are guaranteed in the policy.

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will a) Automatically pay the policy proceeds. b) Pay the policy proceeds only if it would have issued the policy. c) Pay the policy proceeds up to an established limit. d) Not pay the policy proceeds under any circumstances.

Pay the policy proceeds only if it would have issued the policy.

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? a) The insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums. b) The insured's premiums will be waived until she is 21. c) The premiums will become tax deductible until the insured's 18th birthday. d) Since it is the policyowner, and not the insured, who has become disabled, the life insurance policy will not be affected.

The insured's premiums will be waived until she is 21.

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? a) Joint Life Policy b) Survivorship Life Policy c) Second-to-Die d) Family Income Policy

joint life policy

An insurance contract must contain all of the following to be considered legally binding EXCEPT a) Competent parties. b) Beneficiary's consent. c) Offer and acceptance. d) Consideration.

Beneficiary's consent.

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? a) The insured may renew the policy for another 10 years at the same premium rate. b) The insured may renew the policy for another 10 years, but at a higher premium rate. c) The insured must provide evidence of insurability to renew the policy. d) The insured may only convert the policy to another term policy.

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

What describes the specific information about a policy? a) Producer's report b) Policy summary c) Illustrations d) Buyer's guide

policy summary

Why is an equity indexed annuity considered to be a fixed annuity? a) It has modest investment potential. b) It has a fixed rate of return. c) It is not tied to an index like the S&P 500. d) It has a guaranteed minimum interest rate.

It has a guaranteed minimum interest rate.

In a life settlement contract, whom does the life settlement broker represent? a) The insurer b) The beneficiary c) The life settlement intermediary d) The owner

the owner

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a) Guaranteed insurability rider. b) Paid-up additions option. c) Cost of living provision. d) Nonforfeiture option.

Guaranteed insurability rider.

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? a) 3 days b) 5 days c) 10 days d) 14 days

3 days

The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount? a) 65 b) 70 1/2 c) 90 d) 100

100

Who is a third-party owner? a) An employee in a group policy b) An irrevocable beneficiary c) A policyowner who is not the insured d) An insurer who issues a policy for two people

A policyowner who is not the insured