THE STUDY GUID

how many years does a insurance producer need to do to be qualified

1 year

free look gives the owner how many days to cancel contract

10 days

free look must be done in how many days

10 days

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase.

Which of the following riders would NOT cause the Death Benefit to increase?

Payor Benefit Rider

qualified retirement plans

Qualified plans have tax-deferred contributions from the employee, and employers may deduct amounts they contribute to the plan.

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

The same face amount as in the whole life policy.

conditional is

both parties follow certain rules on the contract

policy that been surrendered for cash value

cant be reinstated

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

cash option

life insurance pays

dividends to the policy-owners

if a spouse term puts benefits straight into another IRA rollover

generally not taxed

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

give a notice regarding replacement

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

if the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age, such as 21.

what does the debtor NOT have on the creditor

insurable interest

what happens if no beneficiary named

it goes to the insured estate

cash payment settlement option taxable

it is tax free

what happens for the key person tax benefit

it is taxed free

a grace period is

mandatory provision found in all life and health insurance policies that provides coverage for a period of time after the premium becomes past due.

entire contract is

policy +copy of application + any riders or amendants

for incontestability clause to happen

policy must be in forced for 2 years

Inconstestability Clause

prevents an insurer from denying a claim due to statements in application after policy been in force for 2 years

All of the following are beneficiary designations

primary or contingent, secondary and tertiary.

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

set premium rates

upon delivery the producer may be required to obtain all of the following except

signed waiver of premium

a warranty in insurance is

statement that is guaranteed to be true

difference between substandard and standard

substandard pays higher premiums

what is the maximum time limit for reinstatement

usually 3 years

When calculating the amount a policy-owner may borrow from a variable life policy, what must be subtracted from the policy's cash value?

outstanding loan difference

apparent is also known as

perceived authority

The guaranteed insurability option allows the insured to

purchase specific amounts of additional insurance at specific times without proving insurability.

Insureds cannot be

randomly selected.

rescinded mean

revoke, cancel

exclusions are

risks that. the company will not cover

The interest earned on policy dividends is

taxable

what is the base source of the information

the application

what will key person insurance policy cover

the cost of running the business and replacing the employee

risk is

uncertainly or chance of loss

the guarantee assocaton will not pay more than

100,000 for net cash surrender and net cash with-drawls

non qualified retirement plans

Non-qualified plans use after-tax dollars to fund them, and in most cases employers cannot claim their contributions as a tax deduction.

If an insured continually uses the automatic premium loan option to pay the policy premium,

The policy will terminate when the cash value is reduced to nothing.

Buy sell are strictly used for

business uses

the policy owner must have an insurable interest in who

in the insured

what does the inspection report cover

moral and finical information regarding potential insured

what happens when a policy has been personally delivered to owner

must sign a delivery receipt

legal action must be taken within

2 years after the loss

what age can I start taking distributions out fo my IRA

72

To avoid interest on insurance proceeds, the insurer must pay the death benefit within how many days of receipt of proof of loss?

Insurance proceeds must be paid within 30 days after receiving proof of loss. A 6% interest rate will be assessed on the proceeds left on deposit with the insurer after the 30 days.