life insurance 2

How is increasing term life insurance normally sold?

as a rider attached to a permanent life insurance policy

During the underwriting process, a life insurance company may request a medical exam based on any of the following criteria, EXCEPT:

the applicant's race

in a third party life insurance contract, the parties to the contract are the

the owner, the insured, and the insurance company

which of the following statements regarding the practice of backdating a life insurance application is correct

the policy premium is lower than it would be if the policy was issued with the actual date the application was signed

A producer must be registered with the Financial Industry Regulatory Authority (FINRA) to sell which one of the following types of life insurance?

variable life insurance

Frank, an applicant for life insurance who is a substandard risk, can expect to pay a premium that is best described as which of the following?

generally higher than for a standard risk

All of the following statements comparing whole life insurance and term life insurance are correct EXCEPT:

Both whole life insurance and term life insurance build a cash value.

Life insurance underwriters are most likely to request a consumer (inspection) report on which of the following?

applicants who are seeking very high amounts of life insurance

Which of the following most correctly describes death benefit Option 1 of a universal life insurance policy?

It has a level death benefit, equal to the cash value and a net amount at risk that decreases at the same rate that the cash value increases.

A term life insurance policy in which the protection and premium amounts stay the same during the term period is known as:

a level term policy

in person delivery of a whole life insurance policy gives the producer the opportunity to do all of the following except

review coverage to determine if the policy owner wants to increase the policys face amount

Gina owns a $200,000 five-year renewable term insurance policy and wants to renew the policy at the end of the term. In this case, all the following statements are correct, EXCEPT:

Gina must prove insurability before the insurer can renew the policy.

Unlike traditional fixed interest UL policies, many variable universal life policies offer a third death benefit option, which provides a guaranteed minimum death benefit equal to:

the policy's net amount at risk plus the greater of the actual cash value or the sum of premiums paid

under the standard bring back rule, assets transferred out of a decedents estate will be valued in the estate if the transfer occurred within how many years before death

3

All the following statements about term life insurance are correct EXCEPT:

A small cash value gradually accumulates while the policy is in force.

All the following statements about ordinary (or straight) whole life insurance are correct EXCEPT:

The cash value remains level throughout the life of the policy.

Cindy and Rich each bought a $100,000 universal life insurance policy from the same insurer, each with a ten-year back-end surrender charge schedule. In year two, Cindy withdrew $5,000 from her policy. Rich withdrew $5,000 from his policy in year five. Which of the following statements is most correct regarding surrender charges they may face?

Rich will have a lower surrender charge than Cindy.

All of the following statements about indexed life insurance are correct EXCEPT:

The insured bears all of the investment risk with an indexed life insurance policy

all the following statements regarding life insurance cost comparison methods are correct except

all cost comparison methods recognize the role of the cash value in projecting future costs of coverage

which of the following statements abojut agent / producer responsibilities is correct?

agents must always act ethically and professionally in all dealings with policy owners and future policy owners

The policy value that builds within a whole life insurance policy and is accessible by the policyowner while the insured is alive is called the:

cash value

anne, a life insurance applicant, wants to change an answer that she gave on the application. what should she do?

cross out and initial the incorrect entry, and enter the correct information next to it

A life insurance applicant who is a preferred risk can expect to pay a premium that is best described as which of the following?

generally lower premiums than for standard risks for the life of the policy

all of the following statements regarding the money laundering process and anti money laundering efforts are correct except

insurance companies are exempt from the need to create and maintain anti money laundering programs

by submitting an application for life insurance without the first premium, larry is doing which of the following ?

inviting the insurer to make an offer

the primary reason for using third party ownership in personal life insurance for estate planning purposes is to

remove the life insurance proceeds from the insureds estate and thus reduce the value of the taxable estate

which of the following statements regarding the replacement of a life insurance policy is correct ?

replacing a policy will require the insured to go through a new contestability period

all of the following statements regarding stranger owned life insurance (STOLI) are correct except

the insured retains the right to designate the policys beneficiary