Practice round 1

Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options?

Both guarantee that the principal and interest will be fully paid out

Which of the following indicates the person upon whose life the annuity income amount is determined?

Annuitant

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Extended term

Who would be allowed catch-up contributions?

Individuals age 50 or older

Which dividend option will increase the death benefit?

Paid-up additions

an insurance company that is owned by the policyholders is called a

mutual insurer

An example of an alien insurer doing business in this state is one formed under the laws of Arizona Puerto Rico Mexico District of Columbia

An alien insurer is a company chartered outside the US. Insurance companies incorporated in territorial possessions, such as Puerto Rico are considered foreign

If both the primary and contingent beneficiaries of a life insurance policy have died before the insured's death, who will receive the death benefit?

The tertiary beneficiary If one is designated, the tertiary beneficiary is third in line to receive the death benefit of a life insurance policy if both the primary and contingent beneficiaries predecease the insured.

When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?

Paid-up Additions

Which of the following types of insurance products would be appropriate for an individual with a low income and high insurance needs?

Term insurance Term insurance is pure protection. Term policies provide for the greatest amount of coverage for the lowest premium as compared to any other form of protection.

Where are premiums from fixed annuities invested?

General Account

Which of the following would NOT trigger the payment of Accelerated Death Benefits? -Terminal Illness -Requiring an organ transplant for the insured to survive -Being permanently instiutionalized -Being permanently disabled

-Being permanently disabled

All of the following information needs to be included on an application for life insurance EXCEPT -Medical information about the applicant -Health insurance policies in force -Life insurance with other insurers -The agent's statement, if applicable

Health insurance policies in force The information about the applicant's heath insurance policies is not material to a life insurance contract.

According to the "Common Disaster" clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

The primary beneficiary died before the insured. According to the "Common Disaster" clause, if it cannot be determined who died first, the insured or the primary beneficiary, it will be assumed the primary beneficiary died first, so the proceeds go to the contingent beneficiary. proceeds will go the insureds estate only if there is no contingent beneficiary.

Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?

Variable Whole Life

All of the following are required for HIV testing EXCEPT

If HIV is present, the person may be rated, but they cannot be declined. A person with the HIV can be declined.

Which of the following can be described as a flexible premium adjustable life policy?

Universal Life Universal life is known by the generic name of "flexible premium adjustable life". The policyowner has the flexibility to increase the amount of premium going into the policy and to later decrease it again.