Life Insurance Basic
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contact
If an applicant for a life insurance policy and the potential insured are two different people, what would be the underwriter's main concern?
Whether an insurable interest exist between the individuals
Are insurance company underwriters allowed to discriminate?
Yes, but not unfairly
Adverse Selection
tendency of individuals with higher probability of loss to purchase insurance more often than those who present a lower risk
Which of the following statements concerning buy-sell agreements is true?
BUy-sell agreements are normally funded with a life insurance policy
All of the following are duties and responsibilities of producers at the time of application EXCEPT
Change any incorrect statement on the application by personally initialing next to the correct statement
which of the following is NOT an example of a valid insurable interest?
Debitor in the life of creditor
Purchase of Life Insurance and Insurable Interest?
Debtor in the life of the creditor
Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?
Human life value approach (HLVA)
The mode of premium payment
Is defined as the frequency and the amount of the premium payment.
Which of the following is usually true of a participating life insurance policy?
It pays dividends to policyowners
Which of the following best describes gross annual premium?
Net premium plus experience
How often may a viatical settlement provider contact an insured regarding the insured's health status if the insured's life expectancy is more than one year?
Once every 3 months
Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?
Standard risk is representative of the majority of people
Which of the following would provide an underwriter with information concerning an applicant's health history?
The Medical Information Bureau
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 is the best reason to purchase life insurance rather than annuities?
To create estate