Chapter2: Life insurance basics

Which circumstances describes someone who is terminally ill

An individual who because of an illness is expected to live no longer than 24 months

At the time of initial licensing, what fee must viatical settlement provider pay?

$300

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

The cash value available to the policyowner

An underwriter is reviewing the medical questions in the application in needs further information due to a medical situation the applicant has d in the past. What will the underwriter require

Attending physician statement

When an applicant purchased a life insurance policy, the agent dated the application 4 months prior. When asked by the applicant the agent said he was allowed to backdate policies up to six months if it would

Lower the insureds premium

Which of the following is not a characteristic of variable annuities

They offer guaranteed stock performance

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?

inspection report

Which of the following is usually true of a participating life insurance policy

Pays dividends to the policy owners.

A producer agent must do all of the following When delivering a new policy to the insured except

Disclose commissions earned from the sale of the policy

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyway and pay the face value to the beneficiary

Which is the appropriate action by the insured if a prospective insured submitted an incomplete application

Return the application to the applicant for completion

Which part of an insurance application would contain information regarding the cause of death of the applicant deceased relatives

Medical information

Which of the following is not a characteristic of variable annuities?

They offer guaranteed stock performance

Which of the following is the best reason to purchase life insurance rather than annuities?

to create an estate

Which of the following is not an example of a business use of life insurance

workers compensation

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

If a change needs to be made to the application for insurance the agent may do all the following except

Erase the incorrect answer and record the correct answer.

The mode of premium payment

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

Attempting to determine how much insurance A family would require based upon their financial objectives is known as

Needs approach

Which of the following statements is true concerning the creditors of the deceased insured?

The creditors have rights to the proceeds if they can show evidence of valid assignment

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?

Any form of life insurance

If someone wants to buy a life insurance policy that will provide lifetime protection against premature death what type of life insurance policy should that person buy

Permanent

Once a vatical settlement contract has been completed, how long does the vatical settlement provider have to notify the insurance company that the life policy has been viaticated

20

All of the following are factors that an underwriter could use to select and classify risk except

National origin

When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by

A paramedic or examining physician at the insurer's expense.

The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What should the insurer do with the application?

Return to the applicant for completion

Which of the following methods of calculating the amount of life insurance needed takes into account the insured wages, years until retirement, and inflation

Human life value approach (HLVA)

A key person insurance policy can pay for which of the following?

Costs of training a replacement

Insurers must notify the Commissioner's office as to whether or not a life insurance policy will be marketed with illustrations. Certification of that notification must be provided annually within how many days of the anniversary of the original certification?

30 days