test 2

The Ownership provision entitles the policyowner to do all of the following EXCEPT

a) Set premium rates.

settlement option

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

#92. What are the disclosure requirements if the application for the annuity has been received as a result of a direct mail solicitation?

If the disclosure document and buyer's guide were included in the direct mail solicitation, the disclosure requirements will be considered met.

used to calculate an individual's life value?

The Human Life Value Approach to determining the value of an individual's life requires the calculation of probable future earnings of the insured, which involves wages, expenses, inflation, amount of time until retirement, and the time value of money. Predicted needs of the family after the insured's death are used in the needs approach.

extended term nonforfeiture option

Under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy.

Your client owns a Market Value Adjusted Annuity. In order to pay for a series of large, unexpected medical bills, he decides to surrender his policy prematurely. Which of the following will determine the penalty that the annuity owner will have to pay?

If a Market Value Adjusted Annuity owner surrenders his/her policy prematurely, a penalty is imposed, the amount of which depends directly upon the current interest rates at the time of surrender. The market value adjustment is calculated as a percentage of the difference between the contracted rate of interest in the annuity and the current interest rate at the time of the annuity's surrender.

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

The incontestability clause prevents an insurer from denying a claim due to statements in the application after the policy has been in force for 2 years, even if there has been a material misstatement of facts or concealment of a material fact.

The insurance company underwriter could find information concerning the personal activities and character of an applicant from which of the following reports? a)

Producer's report

73. Insurance is the transfer of

risk

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

The cash value available to the policyowner

During replacement of life insurance, a replacing insurer must do which of the following?

The replacing insurance company must require from the producer a list of the applicant's life insurance or annuity contracts to be replaced and a copy of the replacement notice provided to the applicant, and send each existing insurance company a written communication advising of the proposed replacement.

#3. The Life and Disability Insurance Guaranty Fund protects insureds and policyholders if

insurers lack money to pay off claims.

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

option B

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 employee usually has a period of 31 days after terminating from the group in order to exercise the conversion option. During this time, the employee is still covered under the original group policy.