Life and Health Chapter quizzes
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?
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?
cross purchase plan
A partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called
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
Other-insured rider.
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Certain groups of employees only
A tax sheltered annuity is a special tax favored retirement plan available to:
fixed-period installments
ALL of the following are dividend options EXCEPT
upon conversion, the death benefit of the permanent policy will be reduced by 50%
All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT
Premiums are determined by the age, sex and occupation of each individual certificate holder.
All of the following are characteristics of group life insurance EXCEPT
Buy-sell agreement
All of the following are personal uses of life insurance EXCEPT
The plan is funded by permanent insurance only
All of the following are true of key person insurance EXCEPT
he payable premium amount steadily declines throughout the duration of the contract
All of the following are true regarding a decreasing term policy EXCEPT
The Guaranty Association
All of the following entities regulate variable life policies EXCEPT
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
An agent and 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?
Ask her to sign a statement of good health
An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?
Equity Indexed Annuity
An annuity owner is funding annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)
Neither approved the application nor issued the policy
An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?
The date of medical exam
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
Deferred
An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it?
Decreasing term
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?
Paid up option
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?
Limited-pay Life
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?
$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?
The applicant
An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. Which entity must be notified of the investigation?
Consideration
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Inspection report.
An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n).
interest
During partial withdrawal from a universal life policy, which portion will be taxed?
100% participation of members is required in noncontributory plans
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?
Ancestry
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's
The beneficiary
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
When an insurer's underwriter approves coverage
In forming an insurance contract, when does acceptance usually occur?
An applicant submits an application to the insurer.
In insurance, an offer is usually made when
Adhesion
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?
Income for 2 or more recipients until they die
Life income joint and survivor settlement option guarantees
Generally not taxed as income
Life insurance death proceeds are
Must allow the policyowner to return the policy for a full refund.
Regarding the free-look provision, the insurance company
Annually Renewable Term
The LEAST expensive first-year premium is found in which of the following policies?
Becomes terminally ill.
The accelerated benefits provision will provide for an early payment of the death benefit when the insured
One-Year Term Option
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
Entire contract.
The insurance policy, together with the policy application and any added riders form what is known as
the death benefit can be increased by providing insurability
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
a non qualified annuity plan
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower echelon employees. this plan would be funded with before tax corporate dollars, and it does not meet government approval standards. This annuity plan is
Absolute and Collateral
The two types of assignments are
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
At the time of application
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?
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 the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
The same face amount as in the whole life policy.
Under an extended term nonforfeiture option, the policy cash value is converted to
Respond to the consumer complaint.
Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must
Held or transmitted in any form.
Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information
One-sided: only one party makes an enforceable promise.
What is a definition of a unilateral contract?
Start over with a fresh application
What is the best way to change an application?
To keep the policy in force
What is the purpose of establishing the target premium for a universal life policy?
Application
What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?
Grace Period
What provision in an insurance policy extends coverage beyond the premium due date?
Increasing Term
What type of insurance would be used for a Return of Premium rider?
When the application is signed and a check is given to the agent
When is the earliest a policy may go into effect?
Return the application to the applicant for completion
Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?
Application
Which is the primary source of information used for insurance underwriting?
The applicant must be informed of the sources contacted and how the information is being gathered.
Which is true regarding obtaining underwriting sources?
Payor Benefit
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
The policy owner of the insurance policy.
Which of the following best defines the "owner" as it pertains to life settlement contracts?
Exchange of unequal values
Which of the following best describes the aleatory nature of an insurance contract?
Insurer
Which of the following entities can legally bind coverage?
They earn lower interest rates than fixed annuities.
Which of the following is NOT true regarding Equity Indexed Annuities?
Only level term policy has a level premium.
Which of the following is TRUE regarding the premium in term policies?
The premium is level for the term of the policy.
Which of the following is TRUE regarding the premium in term policies?
To create an estate
Which of the following is the best reason to purchase life insurance rather than annuities?
Annuity
Which of the following products will protect an individual from outliving their money?
It requires the policyowner to pay all overdue premiums with interest before the policy of reinstated.
Which of the following statements about the reinstatement provision is true?
SEPs are suitable for large companies.
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
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?
Whole life
Which of the following types of policies will provide permanent protection?
Its premium steadily decreases over time, in response to its growing cash value.
Which statement is NOT true regarding a Straight Life policy?
Universal
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
The employer is the owner and beneficiary.
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
Insurer
Who must pay for the cost of a medical examination required in the process of underwriting?
The agent
Whose responsibility is it to determine if all of the questions on an application have been answered?
It has a guaranteed minimum interest rate
Why is an equity indexed annuity considered to be a fixed annuity?
6 credits
the minimum number of credits required for partially insured status is
the seller must be terminally ill
which of the following is not true of life settlements ?
