Life Test II
Which of the following statements is true of both the fixed-period & fixed-amount settlement options.
Both guarantee that the principal and interest will be fully paid out
A spouse receives $5,000 a month until the principle and interest on her husband"s life insurance policy have been paid out. Which settlement option did this beneficiary choose?
Fixed amount
Which of the following features allows an insurance policy to remain in force for specific number of days beyond the premium due date?
Grace period provision
Which of the following would be considered a disadvantage of term insurance?
If the insured dies after the end of the term, there is no death benefit to the beneficiary
Under what circumstances will the contingent beneficiary receive the death benefit?
If the primary beneficiary dies before the insured
Which of the following is true about the free-look period in a life insurance policy?
It starts when a policy is delivered
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
The insured usually pays $1200 annually for her insurance annually for her life insurance premium. The year, she has accumulated $175 in dividends, & applied that to her next premium, reducing it to $1025. What dividend option has the insured chosen?
Reduction of premium
An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?
variable
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
Which of the following is true regarding a joint life policy?
The premium is based on the average age of the insureds
Which of the following statements is true regarding a universal life policy?
The premiums can be decreased by the insured
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
The renewable provision allows the policyowner to renew the coverage at the expiration date
Without evidence of insurability
Which of the following terms refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another?
assignment
Which of the following features of the Indexed Whole Life policy is NOT fixed?
cash value growth
An individual inherited a large sum of money at age 40 and wanted to use it to provide a guaranteed income after his retirement at age 60. Which of the following types of annuities would best meet this need?
deferred
Which of the following is NOT a standard exclusion in life insurance policies?
disability
Whose life expectancy is taken into consideration in an annuity?
Annuitant
All of the following are nonforfeiture options in life policies EXCEPT
Automatic premium loans
When the insured purchased a new home, he wanted to purchase a life insurance policy that would protect his family against losing it should he die before the mortgage was paid. Which of the following policies is best suitable for that need?
Decreasing term
Which provision of a life insurance policy states that the application is part of the contract?
Entire Contract
A life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
Incontestability clause
An annually renewable term policy
Renews each year with an increased premium
Which type of life insurance policy generates immediate cash value?
Single Premium
The time period during which an annuitant contributes to an annuity called
The accumulation period
If a life policy has an irrevocable beneficiary designation,
The beneficiary can only be changed w/ written permission of the beneficiary.
All of the following are true regarding the guaranteed insurability rider EXCEPT
it is available automatically, for no extra premium
When a death claim is submitted, the insurer discovered that the insured understated her age on the application for a life policy. What will the insurer take?
pay a reduced death benefit based on the insured's actual age
With a traditional whole life policy, the death benefit
remains constant over time