Guarantee Test 1

Family Term

A married couple wants to include the entire family in their whole life policy under one rider. Which of the following riders will help them achieve that goal? a) family term b) other insured term c) inclusive term d) children's term

Group life insurance

To which of the following types of policies would illustrations regulations apply? a) an annuity contract b) group life insurance c) term life policy with the death benefit of $5,000 d) variable life insurance

Extended term

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option? a) reduced paid up b) extended term c) paid up additions d) cash surrender value

Policy forfeiture

A whole life policy's indebtedness is less than the loan value. Which of the following is NOT permitted under this state's statutes? a) policy forfeiture b) dividend additions c) loan interest on the indebtedness d) additional loans

The premium is based on the age of each insured

All of the following are true of the survivorship life policy EXCEPT a) the death benefit is not paid until the last death b) the premium would be lower than in a joint life policy c) it can insure more than 2 lives d) the premium is based on the age of each insured

Joint and Survivor

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select? a) fixed-period installments b) life income c) joint and survivor d) fixed-amount installments

It transfers the risk to all persons insured

How does insurance distribute the financial consequences of individual losses? a) It transfers the risk to associates of the insured b) it transfers the risk to a small number of persons insured c) it transfers the risk to all persons insured d) it retains the financial consequences

30 days

How long does an insurer have to refund premiums paid on a life insurance policy after the death of the insured? a) 2 weeks b) 60 days c) 6 weeks d) 30 days

Within 30 days

If an annual report was not delivered with an illustration, insureds may request it. When must it be provided? a) within 15 days b) within 10 days c) within 30 days d) 60 days after the original report was due

The State Department of Health

If the results of HIV testing are other than normal, the insurer must notify which of the following? a) the Federal Department of Health and Human Services b) the State Department of Health c) the Medical Information Bureau d) the Department of Insurance

An unfair claims practice

Refusing to pay claims without conducting a reasonable investigation based upon all available information is an example of a) a typical insurance practice b) a required practice c) an unfair claims practice d) a fair trade practice

Purchase of a new home

The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT a) birth of a child b) marriage c) purchase of a new home d) approximately every 3 years between the ages of 25 and 40

A Board of Directors

The Guaranty Association exercises its powers through a) individual policyholders b) claimants of insolvent insurers c) a board of directors d) the National Association of Insurance Commissioners

Next year's premium

The reduction of premium option uses the dividend to reduce a) this year's premium b) the previous year's premium c) the premium on any other policy owned by the policy owner d) next year's premium

Occupation

Among the applicants in the same class and life expectancy, which of the following factors can be used to determine premium rates? a) marital status b) race c) occupation d) ancestry

The policy contains a refund provision

An agent does not provide the insurance applicant a buyer's guide and a policy summary. This is permitted if a) the policy contains a refund provision b) premium deductions are automatically drafted from the applicant's bank account c) the buyer's guide and policy summary are provided in 10 days d) no premium is collected before delivery

The insured can do this within a period stated in the policy

An insured under a group life insurance policy wants to convert it to an individual policy. Which of the following statements is true? a) the insured can do this, but must present evidence of insurability b) the insured has 15 days from the day the policy expires to convert the policy c) the insured can do this if the group life policy is being cancelled d) the insured can do this within a period stated in the policy

Annuitant

Which of the following indicates the person upon whose life the annuity income amount is determined? a) owner b) insured c) annuitant d) beneficiary

Someone who wants to grow retirement funds tax deferred

Which of the following individuals would be a likely candidate to purchase a deferred annuity? a) someone who needs to start receiving benefit payments within 6 months of the annuity purchase b) someone who cannot afford life insurance c) someone who wants to leave the death benefit to the beneficiaries d) someone who wants to grow retirement funds tax deferred

Income payments begin within 1 year from the date of purchase

Which of the following is NOT true regarding a deferred annuity? a) the annuity grows tax deferred b) income payments begin within 1 year from the date of purchase c) it is used to accumulate funds for retirement d) it can be purchased with a single lump sum