life insurance part 2

Variable annuities

The annuitant assumes the risks on investment

An adjustable life policyowner can change what?

the coverage period

After an insurance company examination, the Commissioner or the Examiner appointed by the Commissioner must file a written report of the examination within

60 days

After and insurance company examination, the Commissioner or the examiner appointed by the Commissioner must file a written report within

60 days The report relating to the examination must be filed no later than 60 days after the examination is complete

An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of

A Stoli policy (Stranger originated life insurance policies are usually purchased by people who have no relationship with the insured with the intention of selling them for life settlements.

THe full premium was submitted with the app for life insurance, and the policy was issued two weeks later as requested. When does coverage become effective?

As of the application date. If the full premium was submitted with the application and the policy was issued as requested, the policy coverage effective date would generally coincide with the date of application

Which of the following best describes fixed period settlement options?

Both the principal and interest will be liquidated over a selected period of time. Under the fixed period option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. Both the principal and interest are liquidated together over the selected period of time.

Which of the following is NOT true regarding a Certificate of Authority

It is issued to group insurance participants. Before insurers may transact business in a specific state, they must apply for a license or certificate or Authority from the state department of insurance and meet any financial requirements set down by the state.

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

Life Paid-up at age 65 Limited Pay Whole Life premiums are all paid by the time the insured reaches age 65. The policy endows when the insured turns 100. It is the premium paying period that is limited, not the maturity.

An insurer wants to obtain info on an applicant. What must insurer do?

Present the insured with a Disclosure authorization notice

An individual has been contributing to a retirement account after taxes are taken out of his paycheck. His financial advisor told him that he will be allowed to make contributions after 70 1/2 . The account holder does not have to pay taxes on the growth of his account. What type of retirement account is this?

ROTH IRA

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. It is required that his policy

Required a premium increase each year

Which is NOT true about beneficiary designations

The beneficiary must have insurable interest in the insured. A beneficiary is the person or interest to whom the policy proceeds will be paid upon the death of the insured. Beneficiaries do not have interest in the policy holder.

A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the life insurance policy?

The full death benefit War or Military Service Clause specifically excludes or limits the insurer's liability for losses caused by war or active military service. If a life insurance policy does not have that exclusion, the benefits are paid to the beneficiary, as if the insured dies of any other cause.

Which is true about the spouse term rider

The rider is usually level term insurance

When would a 20 pay whole life policy endow?

a limited pay whole life policy would endows for the face amount at age 100. the premium is completely paid off in 20 years.

If a life insurance policy develops cash value faster than a 7 pay whole life contract, it is

a modified endowment contract

insurance companies may be classified according to the legal form of their ownership. The type of company organized to return any surplus money to their policyholders is

a mutual insurer

The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unaavailble to lower echelon employees. this plan would be funded with before tax corporate dollars, and it does not meet government approval standards. This annuity plan is subject to:

a nonqualified annuity plan Nonqualified plans are perfectly legal for selected employees to receive certain types of benefits. Before tax corporate dollars can be used for these plans, and they are not subject to government standards. Nonqualified plans are not tax deductible

A provision in a life insurance policy that provides for the early payment of some portion of the face value should the insured suffer from terminal illness is called

an accelerated benefit provision can be made in a lump sum or in monthly installments over a specific period of time. this provision is given without an increase in premium

Which of the following defines a peril?

cause of loss A peril is a specific cause of loss insured in a policy.

Which of the following is NOT among the primary ways deductibles for major medical plans can be paid?

en embedded deductible. Deductibles for a major medical plans can be paid in one of the following primary ways: a FLAT dollar deductible, a PER CAUSE deductible, and a MAXIMUM annual deductible FM PC

which is the following provisions make a contract complete

entire contract

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

one year term option the dividend is utilized to purchase one year term insurance.

The insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest and the policy cash value, to pay the policy up early

paid up option

which of the following riders would not cause a death benefit to increase?

payor benefit rider

Equity indexed annuities

seek higher returns these are not securities. They invest on a relatively aggressive basis to aim for higher returns. Like a fixed annuity, the equity indexed annuity has a guaranteed minimum interest rate. The current interest rate that is actually credited is often tied to a familiar index like the Standard and Poohs 500

Which of the following would be considered a nonqualified retirement plan?

split dollar amount Examples of nonqualified plans are individual annuities and deferred compensation plans for highly paid executives, split dollar insurance Section 162 executive bonus plans.

For an individual who is not covered by an employer sponsored plan, IRA contributions are

tax deductible