Life Insurance Exam

Monthly premium waiver and monthly income

After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?

Change any incorrect statement on the application by personally initialing next to the corrected statement.

All of the following are duties and responsibilities of producers at the time of application EXCEPT

It is a Life contingency option

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT

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?

Fraud

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

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?

The producer must provide the applicant with a Notice Regarding Replacement

How must a replacing producer respond to an applicant wishing to replace existing life insurance?

With the policy

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than

The cash value will be paid to the annuitant's estate

The annuity owner dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following is TRUE?

6 Credits

The minimum number of credits required for partially insured status for Social Security disability benefits is

Guaranteed Interest Rate

The minimum rate of return that an annuity earns in a deferred annuity is determined by the

Interest Only Option

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

6 credits

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?

Face amount

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

War or military service

What is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military?

Universal Life

What kind of policy allows withdrawals or partial surrenders?

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?

Someone who works 400 hours per year

Which of the following applicants would NOT qualify for a Keogh Plan?

Size of Each Installment

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Annuity Certain

Which of the following is a short-term annuity that limits the amounts paid to a certain fixed period or until a certain fixed amount is liquidated?

Telling a client that his first premium will be waived if he purchases the insurance policy today.

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

Premiums are not tax deductible as a business expense.

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

Life Income

Which of the following settlement options in life insurance is known as straight life?

Straight life

Which of the following types of annuities will generally provide the highest monthly income?

Target premium

Which of the following would help prevent a universal life policy form lapsing?

Limited Pay Whole Life

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?