test #3

The mode of premium payment

Is defined as the frequency and the amount of the premium payment

An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds

$30,000

All of the following are features and requirements of the Living Needs Rider EXCEPT

Diagnosis must indicate that death is expected within 3 years

Which of the following statements best describes the effect the Accelerated Benefit provision would have on the benefits paid to the beneficiary?

It will decrease the benefits paid to the beneficiary

All of the following must be specified in an insurance policy EXCEPT

The financial rating of the insurer

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT

The policy is owned by the company.

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000

What is the penalty for excessive contributions to an IRA?

6%

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.

Which of the following policy components contains the company's promise to pay?

Insuring clause

Which of the following best describes a pure life annuity settlement option?

Pure life provides payments for as long as the annuitant is alive

he policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Reduction of premium

Which of the following entities may NOT be an insurer?

The Commissioner

if a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?

The balance of the loan will be taken out of the death benefit.

The title page of the policy provides a summary of the benefits and coverages provided by the policy. All of the following information is included in the title page EXCEPT

The insured's beneficiaries.

All of the following statements are true regarding installments for a fixed amount EXCEPT

The payments will stop when the annuitant dies.

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?

Unilateral

Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?

Withdrawals are not taxable.

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT

it is a life contingency option.

Another name for a substandard risk classification is

rated

signing and dating a delivery receipt for a life insurance policy helps to establish all of the following timeframes EXCEPT

the Grace Period.

All of the following are dividend options EXCEPT

. Fixed-period installments

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?

40 credits

If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?

Jumping juvenile policy

Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT

The loss may be intentional

The Commissioner of Insurance supervises and regulates the insurance affairs in the State of California, and is chosen by

The people.

Under an extended term nonforfeiture option, the policy cash value is converted to

the same face amount as in the whole life policy.

Which of the following best describes fixed-period settlement option?

Both the principal and interest will be liquidated over a selected period of time.

In order to become an admitted, authorized insurer, what is the primary body of law about which an applicant company must be concerned?

California Insurance Code