Life Insurance
What are the elements of insurable risk?
due to chance, definite and measurable, statistically predictable, not catastrophic, randomly selected and large loss exposure
When an employee terminates coverage under a group insurance policy,coverage continues in force
for 31 days
Aleatory
A contract in which participating parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss.
Adhesion
A contract offered on a "take-it-or-leave-it" basis by an insurer, in which the insured's only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured.
An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?
Aleatory
The LEAST expensive first-year premium is found in which of the following policies?
Annually Renewable Term
Which of the following is a feature of a variable annuity?
Benefit payment amounts are not guaranteed.
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
A tax-sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only.
A life agent may use the name of corporation or association on any stationery or advertisement to identify the relationship in all of the following ways EXCEPT
Contracted by ....
what characteristics make whole life permanent protection
Coverage until death or age 100
In increasing and decreasing term policy, which policy component fluctuates during the policy term
Death Benefit
What nonforfeiture option has the highest amount of insurance protection?
Extended Term
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an
Interest-sensitive Whole life.
Which statement is NOT true regarding a straight life policy?
It's premium steadily decreases over time, in response to its growing cash value.
An "insurance agent" in the state of California
Life insurance
all of the following are insurable events as defined in the insurance code except
Loses a large sum in a poker game
One of the advantages of a family life insurance policy that provides coverage for children is that it
May a be converted to permanent insurance for the children without requiring evidence of insurability
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Paid-up additions.
When may a representation be withdrawn?
Prior to the insurance of the policy
Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?
Reduction
which of the following policies would be classified as a traditional level premium contract
Straight Life
If a life insurance policy has an irrevocable beneficiary designation,
The beneficiary can only be changed with written permission of the beneficiary .
nonforfeiture values guarantee which of the following for the policyowner
The cash value will to be lost
excluding life insurance, under what condition may a policy owner transfer their personal insurance policy to another person
The insured must first surrender their policy in order for the other person to buy it.
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT
The insured's age at death
Which of the following is NOT true regarding Equity Indexed Annuities?
They earn lower interest rates than fixed annuities.
When is an insurance license considered inactive?
When no company appointment is in effect for the license
An insurer has been found guilty of a Code violation regarding replacement. The insurer then repeats the violation. What will be the minimum penalty?
$30,000
Every individual life insurance policy must provide for a free-look provision that lasts for at least
10 days
The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount?
100
What does "liquidity" refer to in a life insurance policy?
cash values can be borrowed at any time
