mometrix test

Alex mistakenly selected her gender as male instead of female when completing her online life insurance application. The policy was issued without anyone catching the mistake. What would be the insurance company's most likely course of action upon Alex's death?

It would refund the premium difference that rating her as male produced

what is the minimum grace period for a life insurance policy paid monthly

10 days

A living needs rider can be added to every policy type EXCEPT

10 year term

The free look period of an insurance period of an insurance policy is usually how many days

10-15 days

how long does an insurer have to reject an application for a lapsed policy reinstatement

45 days

How long must an insured wait until legal action can be brought against an insurer

60 days

Janet is applying for a life insurance policy but has diabetes. What tool would an insurance company NOT rely on in order to accurately assess Janet's insurability?

A sworn statement from Janet's attorney

John and his wife each had an insurance policy, naming each other as the primary beneficiary and their respective parents as the secondary beneficiaries. If both insureds die in a plane crash, how would each insurer determine the order of death and how to pay the death benefit

Each insurer would determine that their insured died last. The policies would be paid to their respective secondary beneficiaries.

Which set of regulations governs the handling of sensitive and private medical information provided during the policy application process

HIPAA

Janet has a whole life policy with a cash value of 2,800. She takes out a loan on the policy for 800. At what point would Janet be required to pay tax on the policy loan?

If the policy is surrendered

Robert applied for a life insurance policy and paid the initial premium. Robert died in a car accident before the policy could be issued. The insurance company discovered that Robert was treated for angina the year before and would've denied Robert's application had he not died. The insurance company denied the claim to pay the death benefit even though Robert did not die of angina based on which of the following

The conditional receipt that Robert was issued upon completing the application

in what scenario would a policyowner normally create an irrevocable beneficiary

a court order

Which of the following would NOT be considered an aleatory contract

a home improvement loan

which policy dividend option should a policyowner select if their goal is to accrue as much cash value as possible

accumulation at interest

an insured who is terminally ill is considering his best options regarding his life insurance policy, he needs funds to pay for current expenses. His policy has a living needs rider. Policy face amount : 100,000 cash surrender value: 64,000 Viatical settlement offer: 77,000 Which option should the insured consider if he wants to receive the highest amount of benefit for current expenses

activate the living needs benefit on the policy

ray is 63 years old who enjoys sailing. He wants to obtain life insurance in the event that something should happen while out on the water but is worried about the cost. What type of policy should ray consider?

an ad&d (accidental death and dismemberment)

Who is allowed to make changes to the wording of a life insurance contract

an executive officer of the insurance company

an individual purchases a life insurance policy that was issued on March 1, 2010 =, the insured failed to disclose a finding of high cholesterol discovered in 2009. Which of the following options fully describes the time period during which the insurance company would be required to pay the claim if the insured dies of a heart attack

any time after 2 years has elapsed since the policy was issued

at what time is a policyowner required to demonstrate an insurable interest in the life of the insured

at the time the policy is written

which policy option ensures that the premium payments are kept up to date

automatic premium loan

which of the following is NOT a feature of a group life insurance policy

builds cash value payable upon retirement

what type of policy provides coverage for a business to pay expenses if the owner becomes disabled

business overhead expense policy

which of the following is NOT a feature of a universal life policy

choice of investment options (guaranteed death benefit, adjustable face amount and flexible premiums are)

Which of the following types of policies would be most appropriate for a person interested in using life insurance to protect their mortgage

credit life

which rider will NOT affect the death benefit amount when added to a policy

disability income rider (guaranteed insurability, accidental death and dismemberment and return of premium do)

how does social security measure a person's eligibility for retirement benefits

earned credits

In a traditional whole life policy, what amount is the insurer at risk to pay in the event of an insured's death

face value minus the cash value

which of the following is NOT part of the insuring clause of an insurance contract

frequency and amount of premium (the insurer's promise to pay, the parties of the contract and requirement for proof of loss is)

all of the following should be considered when determining whether a policy is a replacement to an existing policy EXCEPT

has the insured canceled life insurance in the past

which of the following is NOT a feature of a renewable and convertible term policy

insured can convert term to a whole life policy based upon existing premiums

what is the purpose of the 7 pay test regarding modified endowment contracts

it ensures that life insurance contracts are not used as tax shelters

which type of death benefit option provides insurance coverage to two or more persons, payable upon the last insured to die

joint survivorship

which of the following death benefit settlement options is tax-free

lump sum (fixed amount, interest only and lifetime income is not)

which of the following would be considered a material misrepresentation on behalf of the insured

not revealing a previous cancer diagnosis

Which of the following would NOT have to be considered when replacing a life insurance policy written by another insurer?

obtaining the consent of the insured

which of the following could potentially reduce the face amount of a universal life policy

partial withdrawal (late payment of premium, policy loan and decreasing term rider do not)

which of the following most accurately describes a payor benefit

pays the premium if the policyowner dies or becomes disabled

Which of the following is considered a provision of a policy loan

policy loans not paid back are subtracted from the policy's face amount

which of the following have rights in an insurance policy

policyowner

all of the following can be considered reasons for the purchase of a long-term care (LTC) policy EXCEPT

premiums are tax-deductible (policies are guaranteed renewable, benefits are tax-free and provides protection for assets)

which of the following regarding key person insurance policies is FALSE

premiums are tax-deductible for the business (pays for loss of revenue due to the key person's disability, pays for the hiring and training of a replacement employee while key employee is disabled, provides for tax-free payments for the business all true)

what is the primary purpose of the spendthrift clause of a life insurance policy

protects the death benefit against creditors of the insured or beneficiary

which of the following provisions of a child rider is FALSE

provides coverage for newborns immediately upon birth

Which of the following regarding a long-term care rider is FALSE

provides long-term care benefits in addition to the policy death benefits

when delivering an insurance policy to an insured, which of the following items might an insurance agent review with an insured that was not reviewed at the time of the application

ratings

which of the following is NOT considered a life insurance settlement option

reassignment (fixed period, life income option and interest only are)

which of the following events concerning a life insurance policy is NOT considered taxable by the IRS

receiving the death benefit upon the death of the insured

in which of the following situations might it be in the best interest of an insured to replace their existing life insurance policy

replacing a term policy with a variable universal life policy

an insurance agent is reviewing the projected investment returns based on historical data that an insured could potentially receive as part of the investments in a variable universal life policy. These statements made by the insurance agent are defined as

representations

all of the following are required by an agent when delivering a policy EXCEPT

review of policy representations (delivery receipt, policy premium, and verification that the insured's medical condition has not changed i.e health statement is)

all of the following are elements of an insurable risk EXCEPT

risk of loss must be unpredictable (loss must be due to chance only, loss must be unexpected, loss exposures must be randomly selected)

which of the following premium payment options represents the lowest cost over the lifetime of a life insurance policy

single premium

what does the back-end load of a deferred annuity contract refer to

surrender charges

the consideration clause in an insurance policy contract provides for which of the following

the amount of premium and payment schedule in exchange for coverage

A homeowner attempting to fix a leak on his roof falls and dies three years after purchasing life insurance. The insurance company denies the claim, stating that a clause in the insurance contract specifically prohibits the insured's "engaging in any inherently dangerous activities." If the beneficiary sues the insurance company, what would be the most likely outcome?

the insurer would be forced to pay, since it never defined what constituted a dangerous activity

which policy option is designed to circumvent probate court upon the death of the insured

the named beneficiary

How does an insurer treat the misstatement of age in a life insurance policy after the two-year contestability period

the policy face amount would be adjusted to pay what the premiums would purchase for the corrected age

all of the following are features of a qualified retirement plan EXCEPT

they allow for tax free with drawals (they must have a vesting schedule for employer contributions, they must offer equal benefits to all participating employees, and all eligible employees must be allowed to participate)

all of the following are advantages of an indexed annuity EXCEPT

they are insured by the FDIC (they can be structured to provide lifetime income, money grows tax-deferred, and they do not lose money during market downtimes are true)

what is the purpose of a nonforfeiture option in an insurance contract

to guarantee the policy value in the event of lapse

which one of the following is NOT considered a typical life insurance policy exclusion?

traveling to a politically unstable country or region (piloting an aircraft, death as a result of war and suicide is)

which of the following describes a type of contract such as insurance where one side is obligated to perform in exchange for money

unilateral

which of the following types of insurance policies represents an indexed life policy

universal life

which type of policy offers the policyholder a flexible premium payment

universal life

which of these policies does NOT offer a guaranteed minimum death benefit

variable universal life

Which type of policy does NOT utilize a general account by the insurer?

variable universal life (universal life, term insurance and variable life don't)

Which of the following riders will enable the cash value of a whole life policy to continue as if premiums have been paid

waiver of premium

Which of the following modes of premium payment represents the greatest cost to the policyholder

weekly (the more often you're paying the higher the premium)

which of the following would NOT be a reason to consider a life settlement for a life insurance policy

when an insured can no longer afford the policy premiums (when an insured wants to reduce their tax liability, when an insured needs money for an emergency, and when the insured no longer needs the policy are)

what tool do insurers use to determine an insured's medical history

MIB report

which section of an insurance application constitutes the agent's report

Part III