Life Insurance - Learn as you go exam

What falls into the category of costs associated with death?

-Final medical expenses of the insured -Day to day expenses of maintaining the family -funeral expenses

What is the limiting age for dependent children of the insured employee in a group life plan (other than disabled children)?

26

Any insurer who engages in the insurance business and violates the Code with respect to insurance replacement shall on the first violation

Be fined a sum of

Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT a. loss must not be catastrophic b. there must be a sufficient number of homogeneous exposure units to make losses reasonably predictable c. loss produced by the risk must be definite d. loss may be intentional

D

What method calculate the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?

Human life value approach (HLVA)

The advantage of qualified plans to employers is

Tax-deductible contributions

For the purpose of insurance, risk is defined as

the uncertainty or chance of loss

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

Automatic premium loan - not required, but commonly added

Which of the following entities may NOT be an insurer? a. natural person b. commissioner c. business trust d. limited liability company

B = when they become commissioner they hand over their license

If the information is used only for identification and not for underwriting purposes, which of the following information about the applicant may be listed on a life insurance application

Birthplace

Which of the following is NOT fundable by annuities?

Death benefits

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection

Which of the following premium modes would result in the highest annual cost for an insurance policy?

Monthly = there will be an additional charge (loading) because the company will not have the premium to invest for a full year, and the company will have additional expenses in billing the premium

What is a wrongful act of violation of someone's rights that leads to legal liability called

Tort

An insured and his spouse owns a home. When the insured dies, the insurer pays the remaining balance on his home loan. Which type of life insurance provision/rider does this describe?

Mortgage Redemption

What other term is used to refer to unintentional torts?

Negligence

Which statement is NOT true regarding a Straight Life policy? a. It has the lowest annual premium of the three types of whole life policies b. its premium steadily decreases over time, in response to its growing cash value c. the face value of the policy is paid to the insured at age 100 d. it usually develops cash value by the end of the third policy year

B = straight life policies charge a level annual premium through the insured's lifetime and provide a level, guaranteed death benefit

An employer offers group life insurance to its employees for the amount of $10,000. Which of the following is true?

The cost of coverage is a deductible expense by the employer

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive

Which product requires a securities license

Variable annuity