Missed Q's

An insured worked for a company that provided a group life policy covering each employee for $25,000. Twenty days after being terminated from his job, the insured was killed in an auto accident. How much will his beneficiary receive?

$25,000, less the premium required for the 20 days of coverage

Insurers are required to complete investigation of a claim within what time period?

45 days

A life insurance policy qualifies as a Modified Endowment Contract if the premium paid exceeds the amount that would have provided paid-up insurance in how many years?

7

According to the life insurance replacement regulations, which of the following would be an example of policy replacement?

A policy is reissued with a refuction in cash value

Which of the following statements is INCORRECT concerning Modified Endowment Contracts (MECS)?

An MEC must always pass the 7-pay test

Which of the following is a correct statement about annuities?

Annuities do not provide protection against inflation

Which of the following would NOT trigger the payment of Accelerated Death Benefits?

Being permanently disabled

Which of the following would not trigger the payment of accelerated death benefits?

Being permanently disabled

Considering the principles of liquidity, how would the policy owner use today's cash values in a life insurance policy?

Emergency expenses

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. What settlement option did J choose?

Fixed amount

which of the following is a correct statement about annuities

Fixed annuities do not provide protection against inflation

What type of insurance would be used for a Return of Premium rider?

Increasing Term

Which of the following is not a component of an insurance policy premium

Number of beneficiaries

Which statement best describes "agreement" as it relates to insurance contracts?

One party accepts the exact terms of the other party's offer

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A

When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?

Paid-up Additions

Which dividend option will increase the death benefit?

Paid-up additions

All of the following statements about mutual insurance companies are correct EXCEPT

Policy dividends issued by mutual companies are guaranteed and not taxable

If a life insurance company uses HIV testing as a part of its underwriting, when must an applicant be notified of the procedure?

Prior to testing

All of the following are true of annual renewable term insurance except:

Proof of insurability must be provided at each renewal.

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?

Reasonable expectations

Which of the following statements about a suicide clause in a life insurance policy is true?

Suicide is excluded for a specific period and covered thereafter

Which of the following protects consumers against the circulation of inaccurate or obsolete personal of financial information?

The Fair Credit Reporting Act

Which of the following is an example of liquidity in a life insurance contract?

The cash value available to the policyowner

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

The insurer will pay the full death benefit from the group policy to the beneficiary

Which of the following is NOT a component of an insurance policy premium?

The number of beneficiaries

Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?

Variable Whole Life

if employees can no longer participate in group insurance, they are allowed to move to an individual life policy without proving insurability. this is due to?

conversion rights

all of the following statements are true regarding an ordinary straight life policy except

it does not have a guaranteed death benefit

If an annuity has a guaranteed minimum interest rate, this means

the interest rate will never drop below the guaranteed minimum

What is the purpose of a surrender charges

to help compensate the company for loss of the investment value due to an early surrender of a deferred annuity.