study guide part 3

The death protection component of Universal Life Insurance is always

Annually Renewable Term

Which of the following is an eligibility requirement for all Social Security Disability Income benefits?

Have attained fully insured status

Annually renewable term policies provide a level death benefit for a premium that

Increases annually

The type of term insurance that provides increasing death benefits as the insured ages is called

Increasing term.

During partial withdrawal from a universal life policy, which portion will be taxed?

Interest

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

SEC registration.

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?

A minor son of the insured

Which of the following is NOT an allowable 1035 exchange?

A whole life insurance policy is exchanged for a term insurance policy.

Which of the following reports will provide the underwriter with the information about a consumer's credit?

Consumer Report

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

Contracts of adhesion

If an insured changes his payment plan from monthly to annually, what happens to the total premium?

Decreases

Insurance policies stay in force even if the insureds are overdue on the premium payments. What phrase best describes this concept?

Grace period

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

Guaranteed insurability.

What is the main purpose of the Seven-pay Test?

It determines if the insurance policy is a MEC

Which of the following is true regarding a single life settlement option?

It provides income the beneficiary cannot outlive.

Which of the following statements is TRUE about a policy assignment?

It transfers rights of ownership from the owner to another person.

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?

Reinstatement provision

All of the following are beneficiary designations EXCEPT

Specified

Which of the following entities established the Do-Not-Call Registry?

The Federal Trade Commission

If a life insurance policy has an irrevocable beneficiary designation,

The beneficiary can only be changed with written permission of the beneficiary

All of the following are characteristics of a group life insurance plan EXCEPT

There is a requirement to prove insurability on the part of the participants.

What type of insurance would be used for a Return of Premium rider?

increasing Term

Before transacting insurance under an assumed or artificial name, a licensee must first obtain approval from

the Commissioner.

Which of the following statements about group life is correct?

The cost of coverage is based on the ratio of men and women in the group.

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

The insured's premiums will be waived until she is 21.

Which of the following statements is correct regarding a whole life policy?

The policyowner is entitled to policy loans

What is a definition of a unilateral contract?

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

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Option B

What is the minimum age for an individual to buy an insurance policy in Alabama?

15

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase.

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to

The contingent beneficiary.