Chapter 11: Missouri Statutes, Rules and Regulations Pertinent to Life Only

Credit life insurance is usually issued as what type of policies?

Term life Credit life insurance can be issued only as an individual or group term plan

Which of the following would NOT be an acceptable interest rate on a policy loan A. 10% B. 4% C. 6% D. 8%

10% policy loan interest rates MAY NOT EXCEED 8% per year

Which of the following producer designations may be used in life insurance advertisements? A. Consultant B. Agent C. Seller D. Financial planner

Agent Missouri regulations PROHIBIT referring to insurers and producers as financial planners investment advisors financial consultants financial counselors sellers preneed sellers or preneed agents

Which of the following is not allowed in credit life insurance A. Creditor having a collateral assignment on the policy B. Creditor requiring that a debtor has a life insurance C. Creditor becoming a policy beneficiary D. Creditor requiring that a debtor buys insurance from a certain insurance

Creditor requiring that a debtor buys insurance from a certain insurer In credit life insurance, a creditor may require that the debtor have life insurance, but they cannot require the Debtor to purchase insurance through a specific insurer

What must contain a notice of the graded death benefit in a life insurance policy with graded death benefits

The policy application

All of the following information about a customer must be used in determining annuity suitability EXCEPT

beneficiary's age To ensure suitability of annuity products, producers must obtain relevant information about the consumer. such as: Age income financial status & tax status financial experience and objectives The beneficiary's age is NOT a suitability factor

Which of the following types of insurance policies is most commonly used in credit life insurance A. Increasing term B. Whole life C. Equity indexed life D. Decreasing term

Decreasing term Credit insurance is a special type of coverage written to ensure the life of the debtor & pay off the balance of the loan in the event of the death of the debtor. It is usually written as decreasing term insurance

The initial amount of credit life insurance may NOT exceed

The amount to be repaid under the contract

Variable life insurance policies, as well as any writers, endorsements and other documents attached to them, must be approved by

The director

An individual obtained a life insurance policy in March, but 3 months later was deemed clinically insane by the state of Missouri. Five months later the insured takes his own life. What type of death benefits will the policy beneficiaries receive?

No benefits will be received because the policy was not in effect for at least one year; however, all premium payments will be returned Life insurance policies issued in the state of Missouri may exclude or restrict liability of death as a result of suicide if the suicide was committed within one year from the date of the policy issue, what are the insured is deemed sane or insane.

Assignability provision in a life insurance policy relates to

The insured's right to designate a new beneficiary Assignability provisions relate to assignments of ownership by a person insured under a group life policy, including the right to designate a beneficiary, to have an individual policy, and to pay premiums

A policy owner would like to replace an existing policy with a new one. After having compared the two policies, the insurer has advised the policy owner not to continue the replacement process. What is the insurer's action called?

Conservation Conservation means any attempt by the existing insurer or its producers, or by a broker, to dissuade a current policy owner from the replacement of an existing life insurance or annuity.

Which of the following is true about credit life insurance A. Debtor is the policy beneficiary B. Creditor is the policy owner C. Debtor is the annuitant D. Creditor is the insured

Creditor is the policyowner In credit life insurance, the creditor is the policy owner and beneficiary; the debtor is the insured

Which of the following provisions in group life policy is prevents the insured from denying a claim to the statements on the application after a certain period of time A. Payment of claims B. Incontestability C. Waiver of premium D. Grace period

Incontestability; this provision prevents an insurer from denying a claim to the statements in the application after the policy has been in force for a period of 2 years, except for non-payment of premium or fraud

A 71-year-old female recently purchased a life insurance policy with graded death benefits. If the policy has graded death benefits for three years which of the following must be true A. The 3rd year of the policy must have a death benefit = to 95% of the total face amount B. The 3rd year of the policy must have a death benefit = to 50% of the total face amount C. The 3rd year of the policy must have a death benefit = to 80% of the total face amount D. The 3rd year of the policy must have a death benefit = to 65% of the total face amount

The 3rd year of the policy must have a death benefit equal to 65% of the total face amount If the insured is between ages of 66 and 75, the policy cannot grade the death benefit in excess of 2 years unless the policy provides at least 50% of the face amount as a 1st year death benefit The 2 year period can be extended to 3 years if the death benefit during the policy or equals or exceeds 65% of the ultimate death benefit

The act of trying to discourage a policyholder from dropping his/her existing policy is called

conservation effort