Set 2

In whole life insurance, when is the policy cash value scheduled to equal the face amount?

At the insured's age 100

Who would be allowed catch-up contributions into an IRA plan?

Individuals age 50 or older

What would the insurance company do if an insured under whole life policy with an accidental death rider intentionally kills himself a couple of months after purchasing the policy?

Deny the death benefit, but refund the premium

Individual members covered by group life insurance receive

A certificate of insurance

Participating under a group life insurance plan are issued

Certificate of Insurance

At what point would an automatic premium loan be generated?

Following the grace period

In this state the owner's gets a "free look" of a specified number of days from

Delivery of the policy

Answers to questions in an insurance application are called representation and, as such, they are

Believed to be true to the best of the applicants knowledge

Which distributions from a Modified Endowment Contract would be taxable as income at the time received to the extent that the cash value of the contract immediately before the payment exceeds in the contract?

Both partial cash surrender and policy loan

Decreasing Term insurance is often used to

Cover a mortgage

Dividends received on participating life insurance policies are

Not taxable because they are a return of unused premiums

Which statement best describes agreement as it relates to insurance contracts?

One party accepts the exact terms of the other party's offer

The purpose of the Fair Credit Reporting Act is to

Protect consumers against the circulation of inaccurate or obsolete personal or financial information

What does the application of contract of adhesion mean?

Since the insured does not participate in preparing the contract any ambiguities would be resolved in favor of the insured

An individual receives a lump-sum inheritance. He'd like to use the money to create a lifetime income since he'll be retiring soon. He purchases an annuity and wishes to receive payments beginning in 2 months. What did he buy?

Single Premium Immediate Annuity

All of the following are consideration in an insurance policy EXCEPT

The cash value in the policy

What happens to the face amount of a whole life policy if the insured reaches the age of 100?

The face amount is paid to the insured

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

When a settlement option is chosen at death, how are the monthly income payments taxed?

The principal portion is generally income tax-free while the interest portion is taxed as ordinary income

If the policy summary for a life insurance policy is not given when the application is taken, when must the policy summary be given to the policyowner?

When the policy is delivered