Life and health ch 1 and 2

Insurance policies are not drawn up through negotiations , In an insured has little to say about it's provisions. What contract characteristic does this describe

Adhesion

In classifying a risk the home office underwriting department will look at all of the following except

Applicant's past income.

Which of the following is not typically excluded from life policies

Death due to plane crash for a fare-paying passenger

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount

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.

Which policy component decreases in decreasing term insurance?

Face amount

Under a 20 Pay whole life policy in order for the policy to pay the death benefit to the beneficiary the premium must be paid

For 20 years or until death which ever occurs first

Which of the following terms best describes the coverage provided by term policies as compared to any other form of protection

Greatest

Which of the following is true regarding the accumulation period of an annuity

It is a period during which the payments into the annuity grow tax deferred.

What is the purpose of conditional receipt

It is intended to provide coverage on a date earlier than the date of the issuance of the policy.

Which of the following best describes annually renewable term insurance

It is level term insurance

Which statement is not true regarding a straight life policy

Its premium steadily decreases over time, in response to its growing cash value.

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that

Joint Life Policy

A policy will pay the death benefit if the insured dies during the 20 year premium paying period and nothing if that occurs after the 20 year period . What type of policy is this

Level term

Which option is being utilized when the insurer accumulates dividends and interest and then he uses the accumulated dividends plus interest and the policy cash value to pay the policy up early

Paid up option

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

Which nonforfeiture option provides coverage for the longest period of time

Reduced Paid-Up

Which of the following is not one of the three basic types of coverage that are available, based on how the fact amount changes during the policy term

Renewable

Which of the following policies will be classified as a traditional level premium contract

Straight life

Which of the following types of risk will result in the highest premium

Substandard risk

Nonforfeiture values guarantee which of the following for the policy owner

That the cash value will not be lost

Which of the following information will be stated in the consideration clause of a life insurance policy

The amount of premium payment

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit.

Which of the following determines the cash value of a variable life policy

The performance of the policy portfolio

Which of the following best describes what the annuity period is

The period of time during which accumulated money is converted into income payments

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?

The policy will be interpreted as if the insurer waived its right to have an answer on the application

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

The policyowner is entitled to policy loans

Which of the following is not true regarding equity indexed annuities

They earn lower interest rates than fixed annuities.

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

Which type of life insurance policy allows the policy owner to pay more or less than the planned premium

Universal Life

Which of the following is a key distinction between variable whole life in variable universal life products

Variable whole life has a guaranteed death benefit

An individual purchased a $100,000 joint life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

$100,000

The insured is also the policy owner of a whole life policy. What age must the insured attain in order to receive the policy's face amount

100

For how long is an insurance company allowed to defer policy loan request

6 months

According to the Entire Contract provision, a policy must contain

A copy of the original application for insurance

Which of the following documents deliver to the policy owner includes information about premium amount cash values surrender value and death benefits for specific policy years

A policy summary

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Authorized or admitted

Which of the following protects the insured from an unintentional policy lapse due to nonpayment of premium

Automatic premium loan

Which of the following is not an essential element of insurance contract

Counter offer

What characteristic makes whole life permanent protection

Coverage until death or age 100

Which dividend component decreases in decreasing term insurance

Face amount

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

Increases annually

What are two components of a universal policy

Insurance and cash account

Which of the following is an example of a limited pay life policy

Life Paid-up at Age 65

The different option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the

One year term option

Equity Index Annuities

Seek higher returns

All of the following entities regular variable life policies except

The guaranty association

What is the purpose of the buyers guide

To allow the consumer to compare the costs of different policies

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of Premium

An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?

When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health

When would a 20-pay whole life policy endow?

When the insured reaches age 100

Annual renewal term(ART)

When the premium increases annually according to age as the probability of death increases

The death protection component of universal life insurance is always

annually renewable term

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

conditional

What type of premium do both universal life in variable life policies have

flexible

The automatic premium loan provision is activated at the end of the

grace period

Stranger originated life insurance policies are in direct opposition to the principle of

insurable interest

Who bears all of the investment risk in a fixed annuity

insurance company

Three types of term insurance

level, increasing, decreasing

The premium of a survivorship life policy compared with that of a joint life policy would be

lower

a insured committed suicide one year after his life insurance policy was issued. the insurer will

refund the premiums paid

The practice of terminating an existing policy or letting it lapse and exchanging it with a new one is called

replacement

For variable products, underlying assets must be kept in

separate account

Representations

statements believed to be true to the best of one's knowledge, but they are not guaranteed to be true

All of the following are true about the variable products except

the premiums are invested in the insurer's general account

Which of the following types of policies will provide permanent protection

whole life

warranty

An absolutely true statement upon which the validity of the insurance policy depends.

All of the following are dividend options except

Fixed period installments

The death benefit under the universal life option B

Gradually increases each year by the amount that the cash value increases

A married couple owns a permanent policy which covers both of their lives and paste the death benefit only upon death of the first insured. Which policy is that

Joint life policy

Who might receive dividends from a mutual insurer?

Policyholders

Which of the following best defines Target premium in a universal life policy

The recommended amount to keep the policy in force throughout its lifetime

Which of the following policies would have an IRS Required corridor or gap between the cash value and death benefit

Universal Life - Option A

In a survivorship life policy when does the insurance pay the death benefit

Upon the last death