Life Insurance Quiz II

Stager-originated life insurance policies are in direct are in direct opposition to the principal of

Insurable interest

Net premium plus expenses

Gross annual premium

Which of the following is the best reason to purchase life insurance rather than annuities?

To create an estate

Application

The primary source of information used for insurance underwriting.

Survivor Protection

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as?

Partners in a business enter into a buy-sell agreement to purchase life insurance which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?

Any form of life insurance

Are insurance company underwriters allowed to discriminate?

Yes, but not unfairly

Which of the following is an example of liquidity in a life insurance contract?

The cash value available to the policyowner

Cost of training a replacement

A key person insurance policy can pay for which of the following?

All advertisements are the responsibility of the

Insurer

Which of the following information about the applicant is NOT included in the General Information section of the application for insurance?

Medical background

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 Medical Information Bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons.

Which is generally true regarding insureds who have been classified as preferred risks?

Their premiums are lower.

An applicant wants to buy a policy that has a cash value element, which should she buy?

Permanent