Maya's Insurance

Risk

Insurance is the transfer of

He will have to pay a penalty if he is younger than 59 1/2

AN insured has a modified endowment contract. He wants to withdraw some money in order to pay medical bills. Which of the following is true? A. he will have to pay a penalty regardless of his age. B. he will not have to pay a penalty, regardless of his age C. he cannot withdraw money from his MEC before age 59 D. he will have to pay a penalty if ugh is younger than 59

Disputes regarding consumer report information.

According to the fair credit reporting act, all of the following would be considered negative information about a consumer EXCEPT A. Late Payments B. Failure to pay off a loan C. Disputes regarding consumer report information. D. Tax delinquencies

insuerer

All advertisements are the responsibility of the A. Department of insurance B. Insurer C. Soliciting agent D. Advertising agency

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 policy EXCEPT A. Evidence of insurability is not required B. most term policies contain a convertibility option. C. upon conversion, the premium for the permeant policy will be based upon attained age. D. Upon conversion, the death benefit of the permanent policy will be reduced by 50%

Joint Life Annuity

If a contract provides a set amount of income for two or more persons with the income stopping upon the first earth of the insured, it is called aa A. Joint and survivor annuity B. deferred annuity C. Pure annuity D. joint life annuity

Increasing Term

The type of term insurance that provides increases death benefits as the insured ages is called A. Flexible term B. Interest-sensitive term C. Age-sensitive term D.Increasing term

Standard, substandard, and preferred

What are the three types of risk rating classifications in life insurance?

A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company.

What is a material misrepresentation? A. Any misstatement made by an applicant for insurance B. Any misstatement by the producer C. Concealment D.A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

Vanishing premium information

Which of the following CANNOT be included along with illustrations used to sell life insurance? A. Rating Information B. Original death benefit C. Vanishing premium information D. Name of the insurer

Level term

Which of the following is NOT a type of whole life insurance? A. Level Term B.Single premium C. Straight life D.Limited payment

Straight life

Which of the following policies would be classified. as a traditional level premium contract. A. Variable Universal life B. Straight life C. Adjustable life D. Universal life

The medical information bureau

Which of the following would provide an underwriter with information concerning an applicant's health history? A. The Inspection report B. The Medical Information Bureau C. A Medical examination D. The agent's report

Pay the policy proceeds only if it would have issued the policy.

A Prospective insured recieves a conditional receipt but dies before the policy is issued. The insurer will A. Automatically pay the the policy proceeds. B. Pay the policy proceeds only if it would have issued the policy. C. Pay the policy proceeds up to an established limit. D. Not pay the policy proceeds under any circumstances.

Equity Indexed Annuity

A annuity owner is funding an annuity that will supplement her retirement, Because she does not know what effective 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) A. Equity Index Annuity B. Variable Annuity C. Flexible Annuity D. Immediate Annuity

Disclose commissions earned from the sale of the policy

A producer agent must do all of the following when delivering a new policy to the insured EXCEPT A. collect any premium due. B. Explain the rating producers if the policy is rating differently than applied for. C. Disclose commissions earned from the sale of the policy D. Explain the policy provisions, riders, and exclusions.

increasing

A return of Premium term life policy is written as what type of term coverage? A. Increasing B. Decreasing C. Renewing D. Level

Increasing

A return of premium term life policy is written as what types of term coverage? A. level B. Increasing C. Decreasing D. Renewable

A level annual premium for the life of the insured

A straight life policy annual premium for the life of the insured A. A decreasing annual premium for the life of the insured B. A variable annual premium for the life of the insured C. A level annual premium for the life of the insured D. An increasing annual premium for the life of the insured

Annually renewable term policy with a cash value account

A universal Life Insurance policy is best described as a/an A. Whole life policy with two premiums; target and minimum B. Flexible Premium Variable Life policy C. Annually Renewable term policy with a cash value account. D. Variable life with a cash value account.

The beneficiary will receive the greater of the money paid into the annuity or the cash value.

The annuitant dies while the annuity is still in the accumulation stage. Which of the following is TRUE? A. The money will continue to grow tax-deferred until the liquidation period, and then will be paid to the beneficiary B. The beneficiary will receive the greater of the money paid into the annuity or the cash value. C. The owner's estate will receive the money paid not the annuity. D. The insurance company will retain the cash value and pay back the premiums to the owner's estate.

Annually Renewable Term

The death protection component of Universal Life is always A. Decreasing Term B. Annually renewable term C. Whole life D. Adjustable Life

The policy will terminate when the cash value is reduced to nothing

If an insured continually uses automatic premium loan option to pay the policy premium A. the face amount of the policy will be reduced by the automatic premium loan amount. B. The cash value will continue to increase C. The insurer will increase the premium amount D. The policy will terminate when the cash value is reduced to nothing

Unilateral

If only one party to an insurance contract has made a legally enforceable promise what kind of contract is it? A. A legal (but unethical) contract B. Unilateral C.Adhesion D.Condition

Upon the last death

In a survivorship life policy, when does the insurer pay the death benefit? A. Half at the first death, and half at the second death B. if the insured survives at the age 100 C. Upon the last death D. Upon the first death

The Customer's associates, friends and neighbors provide the report's data.

In comparison to consumer reports, which of the following describes a unique characteristic of investigating Consumer Reports? A. They provide information about a customer's character and reputation B. the customer has no knowledge of this action. C. The customers associates, Friends and neighbors provide the report's data. D. They provide additional information from an outside source about a particular risk.

Adhesion

Insurance policies are not drawn up through negotiations, and an insured has little to say about it's provisions. What contract characteristic does this describe? A. conditional B. personal C. Adhesion D. Unilateral

Adjusted to the insured's age at the time of renewal

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renew at the end of a specified period of time, the policy premium will be A. determined by the health of the insured B. Based on the issue age of the insured C. Discounted D. Adjusted to the insured's age at the time of renewal.

Considered true to the best of the applicant's knowledge

Representations are written or oral statements made by the applicant that are A. Immaterial to the actual acceptability of the insurance contract. B. Considered true to the best of the applicant's knowledge. C. Guaranteed to be true D. FOund to be false after further investigation.

Insurance companies from adverse selection by high-risk persons.

The Medical information bureau (MIB) was created to protect A. Insureds from unreasonable underwriting requirement by the insurance companies B. Medical examiners that perform insurance physical examinations. C. Insurance companies from adverse selection by high-risk persons. D. Insurance departments from lawsuits by policyowners

A presentation of nonguaranteed elements of a policy.

The term "illustration" in a life insurance policy refers to A. Pictures accompanying a policy B. Charts and graphs C. A presentation of nonguaranteed elements of a policy D. A depiction of policy benefits and guarantees

For 20 years or until death, whichever occurs first.

Under a 20-pay whole life policy, in order for the policy to pay he death benefit to a beneficiary, the premiums must be paid A. Until the Policyowner B. For 20 years or until death, whichever occurs first. C. Until the Policyowner reaches age 65. D. For at least 20 years.

Nothing, the payments will cease

Under a straight life annuity, if the annuitant dies before the Principal amount is paid out, the beneficiary will receive A.Nothing, the payments will cease. B. Guaranteed minimum benefit C. The amount paid into the annuity D. The remainder of the Principal.

Respond to the consumer's 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 A. Respond to the consumer's complaint. B. Defend the report if the agency feel it is accurate. C. Change the report. D. Send an actual certified copy of the entire report to the consumer.

Material Misrepresentation

Untrue statements on the application unintentionally made by insured that, if discovered, would alter the underwriting decision of the insurance company, are called A. material misrepresentation B. Fraudulent statements. C. Warrenties D. Common errors

Loan values and retirement income

What are the "living benefits" of whole life insurance A. Dividends and interest paid on cash values B. Premiums paid by the insured C. Loan values and retirement income D. Face amounts and increases in cash values.

Life insurance and securities

What are the licensing Requirements for someone who sells variable universal life insurance? A. Universal life and variable products B. Life Insurance and securities C. Life insurance D. Securities

Coverage until death or age 100.

What characteristic makes whole life permanent protection? A. Living benefits B. Coverage until death or age 100 C. Guaranteed death benefit D. Guaranteed level premium

One-sided; only one party makes an enforceable promise.

What is a definition of a unilateral contract? A. If one party makes a condition, the other party can counteroffer. B. One-sided; only one party makes an enforceable promise. C.Two or more parties go into a contract understand there may be an unequal exchange of value. D. One author; the company wrote the contract; the insured must accept it as written.

Current assumption life

What is another name for interest-sensitive whole life insurance? A. Term life B. Adjustable life C. Current assumption life D. Variable life

It is intended to provide coverage on a date prior to the policy issue

What is the purpose of a conditional receipt? A. It is given only to applicants who fully prepay the premium B. it is intended to provide coverage on a date prior to the policy issue. C. it guarantees that a policy will be issued in the amount applied for D. It serves as proof that the applicant has been determined insurable.

When the application is signed and a check is given to the agent.

When is the earliest a policy may go into affect? A. After the underwriter reviews the policy B. When the application is signed and a check is given to the agent C.When the first premium its paid and the policy has been delivered D. When the insurer approves. the application

It is level term insurance

Which of the following best describes annually renewable term insurance? A. it is level term insurance B. It requires proof of insurability at each renewal C. Neither the premium nor death benefit if affected by the insured's age. D. It provides an annually increasing death benefit

Exchange of unequal values

Which of the following best describes the aleatory nature of an insurance contract? A. Ambiguities are interpreted in favor of the insured B. Policies are submitted to the insurer on a take it-or leave it basis C. Exchange of unequal values D. Only one of the parties being legally bound by th contract.

aleatory

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company? A. Warranty B.Aleatory C. Adhesion D. Subrogation

The name of the primary and secondary beneficiaries

Which of the following is NOT required on an illustration used in the sale of a life insurance policy? A. Generic name of policy B. Name of insurer C. Underwriting or rating classification upon which the illustration is based D. The name of the primary and secondary beneficiaries

The death benefit is fixed.

Which of the following is NOT true regarding a Variable Universal Life policy? A. The minimum death benefit its guaranteed B. The cash values are not guaranteed C. The death benefit is fixed. D. The Policyowner can participate in some of the investment decisions.

The death benefit is fixed

Which of the following is NOT true regarding a Variable Universal life policy? A.The death benefit is fixed B. The Policyowner can participate in some of the investment decisions C. The minimum death benefit is guaranteed D the cash values are not guarenteed

warranty

Which of the following is a statement that is guaranteed to be true, and is untrue, may breach an insurance contract? A. Concealment B. Indemnity C. Representation D. Warranty

Pay-in period

Which of the following is another term for the accumulation period of an annuity? A. Premium Period B. Liquidation Period C. Annuity Period D. Pay-in Period

Cost comparison methods

Which of the following is used to compare the cost of one life insurance policy against another in or order to guide prospective purchases to policy that are competitively priced? A. Cost comparison methods B. Policy cost guides C. Consumer price indices D. Policy cost indices

Testimonials from compensated individuals

Which of the following may be included on an insurance advertisement? A. Testimonials from compensated individuals B. trade names in pace of the insurers name C. claims settlement illustrations which imply special treatment D. words and symbols similar to those of government agencies

Annuity

Which of the following products will protect an individual from outliving their money? A. Adjustable life policy B. Permanent life insurance C. Annuity D. Joint and survivor policy

Consumer Report

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit? A. Inspection report B. Agent's Report C. Any federal Report D. Consumer Report

Insures are barred from requesting HIV testing.

Which of the following statements regarding HIV testing for life insurance purpose is NOT true? A. HIV testing is regulated at the state level. B. Insures are barred from requesting HIV Testing C. Positive test results will be forwarded the state's Department of Health If a physician is not selected by the applicant. D. The testing practices must meet the criteria of the U.S. Department of Health and Human Services.

Universal life

Which of the following types of policies allows the Policyowner to skip premium payments provide that there is enough cash value in the policy to cover the premium amount? A. Flexible life B. Variable life C. Adjustable life D. Universal life

The applicant has a prior felony conviction

Which of the following would qualify as a competent party in an insurance contract? A. The applicant is under the influence of a mind-impairing medication at the time of the application B. The applicant has a prior felony conviction. C. The applicant is intoxicated at the time of the application. D. The applicant is a 12 year old student

Those who have been insured under the plan for at least 5 years

Which of the following, employees insured under a group life plan would be allowed to convert to individual insurance the same coverage once the plan is terminated? A. Those who have no history of claims B. Those who have been insured under the plan for at least 5 years C. Those who have worked in the company for at least 3 years D. those who have dependents

Face Amount

Which policy component decreases in decreasing term insurance? A. Dividend B. Premium C. Face Amount D. Cash Value.

Face Amount

Which policy component decreases in decreasing term insurance? A. Premium B. Face amount C. cash value D. Dividend

Its premium steadily decreases over time, in response to its growing cash value.

Which statement is NOT true regarding a straight life policy? A. It has the lowest annual premium of the three types of whole life policies B. It's premium steadily decreases over timeline response to it's growing cash values. C. The face value of the policy is pad to the insured at the age of 100 D. It usually develops cash value by the end of the policy year.

Single Premium

Which type of life insurance policy generates immediate cash value? A.Decreasing Term B. Continuous Premium C. Single Premium D. Level Term

The employer is the one and the beneficiary

Who is the owner and who is the beneficiary on a key person life insurance policy? A. The key employee is the owner and beneficiary B. The key employee is the owner and the employer is the beneficiary C. The employer is the owner and the beneficiary D. The employer is the owner and the key employee is the beneficiary

Limited Pay Whole Life

Your client wants both protection and saving from the insurance, and is willing to pay premium until retirement at the age 65. What would be the right policy for this client? A.Life annuity with period certain B. Increasing term C.Limited pay whole life D. Interest-sensitive whole life

Decreasing Term

an individual has just borrowed $10,000 form his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation? A. whole life B. Decreasing term C. Variable term D. Universal life

The insured may renew the policy for another 10 years, but at a higher premium rate.

and insured purchased a 10 year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10 year term? A. The insured may renew the policy for another 10 years at the same premium rate. B. The insured may renew the policy for another 10 years, but at a higher premium rate. C. The insured must provide evidence of insurability to renew the policy D. The insured may only convert the policy.

When the income payments begin

the main difference between immediate and deferred annuities is A. How the annuity is purchased B. The number of insureds C. The amount of each payment D. When the income payments begin

Net premium plus expenses

which of the following best describes gross annual premium? A. Expense premium B. Net premium plus expenses C. Annual loading D. Basic insurance rate plus commissions

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 A. explain the nature and type of any receipt the producer misgiving to the applicant B. Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information. C. Check to make sure that there are no unanswered question on the application. D. Change any incorrect statement on the application by personally initialing next to the corrected statement.

The payable premium amount steadily declines throughout the duration of the contract.

All of the following are true regarding a decreasing term policy EXCEPT A. the death benefit is $0 as the end of the policy term B. The contract pays only in the event of death during the term and there is no cash value. C. The face amount steadily declines throughout the duration of the contract. D. The payable premium amount steadily declines throughout the duration of the contract.

They must be part of the contract

All the following are requirements for life insurance illustrations EXCEPT A. They must differentiate between guaranteed and projected amounts. B. They must be part of the contract. C. They may only be used as approved. D. They must identify nonguaranteed values.

Attained Age

An employee quits his job and converts his group policy to an individual policy, the premium for the individual policy will be based on his A. Experience rating B. group rate C. insurer's scheduled rate D. Attained age

Beneficiaries Consent

An insurance contract must contain all the following to be considered legally binding EXCEPT A. Consideration B. Competent parties. C. Beneficiaries consent D. Offer and Acceptance

aleatory

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe? A. Adhesion B. Conditional C. Aleatory D. Good health

Inspection Report

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies, and habits. What type of report is that? A. Inspection Report B. Medical Information Bureau's Report C. Agent's Report D. Underwriter's Report

Contracts of Adhesion

Contracts that bare prepared by one party and submitted to the other party on a take it or leave it basis are classified as A.Contracts of adhesion B. Unilateral contracts C. Aleatory contracts. D. Binding contracts.

Paid Endorsement

If a person is compensated for a testimonial in a advertisement, which of the following statements should be included in the advertisement? A. The author is the employee of the insurer B. Commissioned advertisement C. Paid Endorsement D. Insurer is not responsible for the contents of the testimonial

Paid endorsement

If a person is compensated for a testimonial in an advertisement,which of the following statements should be included in the advertisement? A. The author is the employee of the insurer B. Commissioned advertisement C. Paid endorsement D. Insurer is not responsible for the contents of the the testimonial

The balance of the loan will be taken out of the death benefit

If a policy has an automatic premium loan provision what happens if the insured dies before the loan is paid back? A. The policy is rendered null and void B. The balance of the loan will be taken out of the death benefit C. The policy beneficiary receives the full death benefit. D. The policy beneficiary takes over the loan payments.

Whether an insurable interest exists between the individuals

If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about A. the gender of the applicant B. the type of policy requested. C. which individual will pay the premium D. whether an insurable interest exists between the individuals.