Life Contract - Section 8

Each of the following is true regarding policy loans except:

All life policies contain a policy loan provision.

A reinstatement may not be based on the following circumstances, except:

Any time before the grace period ends and the maturity date is reached.

Transferring all or a portion of a policyowner`s interest to an insurance policy is known as:

Assignment of interest

The following are options for a policyowner when a permanent policy with cash values is terminated, except:

Cash Value

All of the following are rights of policy ownership except:

Changing a policy provision with agent's approval

Suppose that you name someone as your irrevocable beneficiary. Without the permission of the irrevocable beneficiary, you give up the right to do all of the following except:

Continue to pay premiums

Which creditors would have the right to claim a portion of a death benefit?

Creditors of the beneficiary.

Which of the following policy provisions states that the application is part of the policy?

Entire contract

Which one of the following is not a settlement option?

Fixed Interest Only

If a beneficiary wants the death proceeds to be paid monthlyfor the next 20 years, this is called:

Fixed Period Installments

Which of the following statements about the suicide clause is incorrect?

If a suicide is committed in the first 2 years, then the beneficiary receives nothing.

Which of the following statements is not true about the grace period in individual life insurance policies?

If the insured dies during the grace period, no death benefit is payable but all premiums will be returned.

All statements made by the insured will be considered representations and not warranties except:

In the case of fraud.

The common provision that says the insurer will not contest the policy after 2 years of being in force is:

Incontestability clause

Which of the following could not be named as a beneficiary?

Insured

Mr. and Mrs. Smith are receiving a monthly annuity distribution of $2,000. If Mr. Smith dies and Mrs. Smith continues to receive the same amount, which payout option was selected?

Joint with last survivor

All of the following incontestability clause statements are true except:

No statement made in the application may be used to deny a claim if in force for one year.

All the following are common premium modes except:

Pay bi-monthly

Which of the following premium modes is the least expensive?

Pay in full.

If an insurer fails to pay the death claim within 30 days, then it must:

Pay interest from the insured`s date of death.

If an insured commits suicide after the suicide clause in the insured's life insurance policy has expired, the insurance company will:

Pay the death benefit

A change of beneficiary in an individual life policy can be made by the

Policyowner, unless there is an irrevocable beneficiary

If the insured dies on Monday and the primary beneficiary dies on Tuesday, who receives the proceeds?

Primary beneficiary`s estate.

All of the following are true about the grace period except:

Proceeds will be reduced to zero if the insured dies during the grace period.

An insurance producer is prohibited from the following except:

Producer may be named as the owner or beneficiary in a life policy for a client who is a relative.

All of the following are common provisions of life insurance policies except the:

Spendthrift clause

What is the clause that most life insurance policies contain which prevents the creditors of a beneficiary from claiming any of the benefits the beneficiary hopes to receive before the beneficiary actually receives the money?

Spendthrift clause

The promise that the insured has a specified amount of life coverage while the insurer is completing the underwriting is known as:

TIA - Temporary Insurance Agreement

Jason has a $500K life policy that is a per stirpes. What happens when Jason dies after one of his 3 children?

The 2 remaining children receive their third and the heirs of the child who died would split the final third equally.

Who has the right to take legal action if the insurer does not pay the death benefit as stated in the policy?

The beneficiary.

With regard to beneficiaries, what does per capita mean?

The death benefit will be split equally between each living child.

All of the following statements pertaining to reinstatement of a life insurance policy are correct except:

The insurer cannot require that previous loans be repaid.

Dividends are normally paid to which of the following?

The policyowners of a mutual company

The main benefit for reinstating a lapsed policy rather thanpurchasing a new policy is:

The premium remains at the same level, based on the insured`s original age.

If the insured and beneficiary die in a car accident and the accident report determines the insured died first, which of the following is true?

The primary beneficiary estate receives the proceeds.

Under the provisions of the uniform simultaneous death act, how would the proceeds of an insurance policy settle if the insured and the only primary beneficiary were killed in the same accident, with no evidence as to which died first?

The proceeds would be distributed as through the insured survived the beneficiary

What happens under the automatic premium loan option?

This prevents the unintentional lapse of a policy due to nonpayment of the premium.

The policyowner has the right to do all of the following except:

Transfer the responsibility to pay the premiums to someone else.

If Mr. X selects the reduced paid up nonforfeiture option, his coverage will continue

Until death or age 100, whichever occurs first, in an amount stated in the policy's Table of Guaranteed values within his policy.

When can an irrevocable beneficiary designation be changed?

With the primary beneficiary`s consent.

A viatical settlement is an:

agreement that provides a life insurance policyowner immediate cash in exchange for death benefit.

All of the following statements regarding the free-look provision of a deferred annuity contract sold in California are correct EXCEPT

the amount returned to the buyer requesting to return an annuity contract during the free-look period is the premium minus the contract surrender charge