VA Life Insurance Review

Which one of the following statements about the application for life insurance is true?

It becomes a permanent part of the insurance contract

All of the following statements about an accidental death benefit in a life insurance policy are true except:

It is used only in term life insurance policies

All of the following statements about the ownership provision in a life insurance policy are true except:

It states the insurer will pay the proceeds to the beneficiary upon receiving proof of the insured's death

If a life insurance policy is transferred to another person in exchange for valuable consideration, then the death proceeds me:

Lose their income tax exempt status

All of the following types of life insurance policies allow the policy owner to make changes in coverage without replacing the policy except:

Modified premium whole life insurance

The beneficiary of the life insurance policy originally as indicated:

On the life insurance application

One parent purchases and is the owner of a juvenile life insurance policy on a child, with the other parents named as beneficiary. If the policy contains a payer benefit, who must become disabled before premiums will be waived?

Only the parent who purchased the policy

When life insurance is being used to conserve the largest estate that consists primarily of non-liquid assets, the primary use of the policy proceeds will be to:

Pay estate taxes

If an insured with an ordinary whole life insurance policy is still living at policy maturity, the insurance company will:

Pay the face amount of the policy

The gross annual premium for a whole life insurance policy is the net premium:

Plus expenses

All of the following statements about universal life insurance are true except:

Premiums must be paid on a monthly basis

Group life insurance plans generally require participation by:

75% of eligible employees, under a contributory plan

When replacement is involved, the life insurance producer or agent is required to give the applicant:

A copy of each sales proposal used in the presentation

Life insurance helps meet estate planning objectives because it is:

A liquid asset at death

Which qualified plan may be established by a business corporation?

A simplified employee pension (SEP)

To minimize adverse selection in group life insurance an insurer may require:

Evidence of insurability for participants who join after the eligibility period

All of the following statements about a life insurance policy loan are true except:

Failure to repay the loan when due terminates the policy

Which rider is included in a policy with whole life insurance on the principal insured and term insurance on the insured's spouse and children?

Family rider

Once a contract is deemed to be a modified endowment contract (MEC), how long does it remain so?

Forever

Compared to a joint life insurance policy, separate whole life insurance policies on each of the insured's typically result in:

Higher combined premiums

Which one of the following statements about a life insurance policy rider regarding waiver of premiums and disability income is true?

In addition to waving premiums during periods of disability, it provides a monthly income

Death benefits under a survivorship life insurance policy covering two insureds are paid:

In full at the second insured's death

When a terminated employee elects the conversion option under a group life insurance plan, the new policy premium is based on the:

Insurers current rate for other individual applicants

An immediate annuity:

Is purchased with a single premium

Education funds created by life insurance death benefits are designed to cover the cost of all of the following except:

Medical care

A rated life insurance policy is issued at:

Substandard risk rates

The trustees of a qualified retirement plan received notice of several claims against the accrued benefits of a key employee, age 52. The trustees must refuse to pay all of the following except:

The internal revenue service presenting an order for collection

Which statement explains why in annuitant would seek a tax free exchange of one contract for another within the same company?

The new contract offers more attractive interest rates

When an annuitant under a life only annuity dies, what is the amount of the property interest in the contract that will be includable in the annuitants gross estate?

Zero

Group term life insurance can be provided at low rates for all of the following reasons except:

It accumulates cash values in an efficient manner

A surviving spouse without dependent children is eligible for Social Security survivor benefits at age:

60

Which provision can provide for the payment of life insurance benefits to the insured while living?

An accelerated benefit provision

The lowest total annual premium expenditure usually results when premiums are paid:

Annually

A misleading life insurance policy illustration may result from any of the following except:

Reflecting the time value of money

All the following are associated with the interest adjusted net cost method of life insurance policy comparison except:

Separate investment account

Which life insurance policy provides only pure protection?

Term life

The insured died two years after discontinuing annual premium payments of $200 on a $20,000 whole life insurance policy with a $2000 cash value and an automatic premium loan provision. How much will the insurer pay to the insured's beneficiary?

The $20,000 face amount less any policy loans

Which one of the following factors is considered in determining the amount payable under the interest only settlement option in life insurance policies?

The amount of the policy proceeds

All of the following factors influence the benefit payment amount under a life income annuity except:

The annuitants age on each contract anniversary

Current interest rates provide a reasonable basis for project in cash values in a fixed annuity when:

The current interest rate is close to historical standards

Which financial element related to a fixed annuity contract tends to remain in the 3%-5% range?

The guaranteed minimum interest rate

Which one of the following statements is true if an insured purchases a limited payment whole life insurance policy?

The insured has lifetime protection

Which statement is true about life annuities?

The insurer uses the law of large numbers to predict life expectancy

A withdrawal from a deferred annuity must be authorized by:

The owner

The authority to select a settlement option under an individual annuity contract resides with:

The owner

A preferred risk classification for a whole life insurance policy means that:

The premium rate is lower than the standard rate for the identical policy

All of the following statements about the provisions in a typical modification clause in a life insurance policy are true except:

The producer or agent is granted the authority to waive policy provisions

An immediate annuity contract provides for:

The systematic liquidation of the principal and interest

All of the following are reasons for purchasing life insurance on a spouse who does not work for pay outside the home except:

To guarantee that newborn children will be eligible for life insurance

Deferred annuities are normally purchase by individuals who:

Want tax-deferred growth for retirement funds