Class C
An annuitant died after receiving $ 200 monthly for 10 years ( $ 24,000 total ) from a $ 30,000 installment refund annuity . His wife , as beneficiary , will now receive the same monthly benefit until her payments total
$ 6,000 .
The annuity owner dies during the accumulation period without naming a beneficiary . Annuity's cash value exceeds premiums paid . Which of the following is TRUE ?
. The cash value will be paid to the annuitant's estate .
In underwriting a substandard risk , which of the following is INCORRECT ?
A discounted premium would be charged .
if a person purchases a Flexible Premium Deferred Annuity , when is the soonest that income payouts will begin ?
After 1 year
With a Single Premium Deferred Annuity ( SPDA ) , when are the benefits paid ?
After more than 1 year
Which of the following statements is true concerning the alteration of optional policy provisions ?
An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder.
When an annuity is written , whose life expectancy is taken into account ?
Annuitant
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium ?
Automatic premium loan
An insurance contract must contain all of the following to be considered legally binding EXCEPT
Beneficiary's consent
All of the following are utilized by an underwriter in order to underwrite an applicant EXCEPT
Birth certificate .
A producer who fails to separate premium monies from his own personal funds is guilty of
Commingling
What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident ?
Common Disaster Clause
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy . Which of the following insurance principles has the insurer violated ?
Consideration
An applicant for an individual health policy failed to complete the application properly . Before being able to complete the application and pay the initial premium , she is confined to a hospital . This will not be covered by insurance because she has not met the conditions specified in the
Consideration Clause .
Representations are written or oral statements made by the applicant that are
Considered true to the best of the applicant's knowledge .
Contracts that are prepared by one party and submitted to the other party on a take - it - or - leave - it basis are classified as
Contracts of adhesion .
Which of the following will NOT be an appropriate use of deferred annuity ?
Creating an estate
Which of the following is NOT allowed in credit life insurance ?
Creditor requiring that a debtor buys insurance from a certain insurer
All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT
Death benefits are paid only if death occurs within 24 hours of an accident .
An individual has just borrowed $ 10,000 from his bank on a 5 - year installment loan requiring monthly payments . What type of life insurance policy would be best suited to this situation ?
Decreasing term
Which of the following best describes an insurance company that has been formed under the laws of this state ?
Domestic
Which of the following would most directly affect the purchasing power of benefits paid on a fixed annuity ?
Economic inflation
The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the
Entire contract clause .
Which of the following best describes the aleatory nature of an insurance contract ?
Exchange of unequal values
Items stipulated in the contract that the insurer will not provide coverage for are found in the
Exclusions clause .
The authority granted to an agent through the agent's contract is referred to as
Express authority
The authority granted to an agent through the agent's contract is referred to as
Express authority .
An agent selling variable annuities must be registered with
FINRA .
Under a 20 - pay whole life policy , in order for the policy to pay the death benefit to a beneficiary the premiums must be paid
For 20 years or until death , whichever occurs first .
An individual is purchasing a permanent life insurance policy with a face value of $ 25,000 . While this is all the insurance that he can afford at this time , he wants to be sure that additional coverage will be available in the future . Which of the following options should be included in the policy ?
Guaranteed insurability option
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates , without proving insurability , the policy includes a
Guaranteed insurability rider .
Units with the same or similar exposure to loss are referred to as
Homogeneous .
In which of the following cases would a credit disability policy be issued ?
If an individual is in debt to specific will be made for him / her until the return to work . creditor , payments
A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider . In which of the following scenarios will the rider waive the payment of premium ?
If the father is disabled for more than 6 months
What type of annuity can be purchased with a single premium and provides benefit payments immediately ?
Immediate
Which benefits would a disability plan most likely pay ?
Income lost by the insured's inability to work
Which of the following is a feature of a single premium immediate annuity ?
Income payments start within one year .
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital ?
Indemnity
Which of the following entities has the authority to make changes to an insurance policy ?
Insurer's executive officer
Question Which of the following ultimately the owner of a fixed annuity ? determines the interest rates paid to
Insurer's guaranteed minimum rate of interest
Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity ?
Insurer's guaranteed minimum rate of interest
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured . Which policy is that ?
Joint Life Policy
The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called
Joint and survivor .
The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called
Life income with period certain .
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up . What kind of policy is it ?
Limited - pay Life
Which of the following is the basis for a claim against an insurance policy ?
Loss
Untrue statements on the application unintentionally made by insureds that , if discovered , would alter the underwriting decision of the insurance company , are called
Material misrepresentations
An insurance company wants to obtain the insurance history of an applicant Which source releases coded information to insurers regarding information included on previous insurance applications ?
Medical Information Bureau
A person who does not lock the doors or does not repair leaks shows an indifferent attitude . This person presents what type of hazard ?
Morale
How many pairs of glasses in a 12 - month period will a vision expense insurance plan cover ?
One
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other - insured rider .
An individual buys a flexible premium deferred life annuity with 20 year period certain . What would his beneficiary receive if he died 5 years after beginning the annuity phase ?
Payments for 15 years
An applicant for health insurance has not had a medical claim in 5 years . He exercises daily and does not smoke or drink . What classification do you assume the applicant would receive from his insurer ?
Preferred
Which of the following insurance options would be considered a risk - sharing arrangement ?
Reciprocal
Which of the following insurance options would be considered a risk sharing arrangement ?
Reciprocal
Installing deadbolt locks on the doors of a home is an example of which method of handling risk ?
Reduction
A man decided to purchase a $ 100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college . He discovered that his policy
Required a premium increase each renewal .
In case of a loss , the indemnity provision in insurance policies
Restores an insured person to the same financial state as before the loss .
Which of the following components of dental insurance does NOT require the payment of a deductibie ?
Routine and preventive maintenance
To sell variable life insurance policies , an agent must receive all of the following EXCEPT
SEC registration .
If an agent wishes to sell variable life policies , what license must the agent obtain ?
Securities
The Ownership provision entitles the policyowner to do all of the following EXCEPT
Set premium rates .
An insurance policy that only requires a payment of premium at its inception , provides insurance protection for the life of the insured , and matures at the insured's age 100 is called
Single premium whole life .
Hazard is best defined as
Something that increases the risk of loss .
Which of the following would an accident - only policy NOT cover ?
Surgery to repair a wrist damaged by tendonitis .
Which of the following is TRUE regarding variable annuities ?
The annuitant assumes the risks on investment .
All of the following statements about equity index annuities are correct EXCEPT
The annuitant receives a fixed amount of return
Which of the following would qualify as a competent party in an insurance contract ?
The applicant has a prior felony conviction .
Which of the following is true about the requirements regarding HIV exams ?
The applicant must give prior informed written consent
Which of the following is NOT the consideration in a policy ?
The application given to a prospective insured
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 .
Peril is most easily defined as
The cause of loss insured against
Which of the following is true regarding a waiver of a surrender charge on an annuity contract ?
The charge may be waived if the annuitant is confined to a long - term care facility for at least 30 days .
Which of the following statements about group life is correct ?
The cost of coverage is based on the ratio of men and women in the group .
The policyowner of an adjustable life policy wants to increase the death benefit . Which of the following statements is correct regarding this change ?
The death benefit can be increased by providing evidence of insurability .
When a fixed annuity owner pays a monthly annuity premium to the insurance company , where is this money placed ?
The insurance company's general account
Which is NOT true regarding an insured who is considered to be a standard risk ?
The insured may have to pay slightly higher premiums .
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
The interest is not taxable since it remains inside the insurance 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 .
Twins brother and sister each purchased a retirement annuity . When they retired at the same time , each selected the life income option Both have similar life styles and are in good health . Which of the following is true with respect to their monthly annuity payments ?
The man's payments will be larger .
The insuring clause of a disability policy usually states all of the following EXCEPT
The method of premium payment .
Hospital indemnity / hospital provide payment based on confinement indemnity policy will
The number of days confined in a hospital .
All of the following statements are true regarding installments for a fixed amount EXCEPT
The payments will stop when the annuitant dies .
In terms of parties to a contract , which of the following does NOT describe a competent party ?
The person must have at least completed secondary education
The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as
The policy contains sufficient cash value to cover the cost of insurance .
If an insured continually uses the automátic premium loan option to pay the policy premium ,
The policy will terminate when the cash value is reduced to nothing .
A group of 15 skydivers met at a seminar and began talking about life insurance during a break . Because it was expensive to get individual life insurance , they decided to band together to form a small group so that they could qualify for group life insurance . After they applied for group life insurance , they were rejected . Why ?
The purpose of the group was to purchase life insurance .
What is the purpose of establishing the target premium for a universal life policy ?
To keep the policy in force
The paid - up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy .
When an individual purchases insurance what risk management technique is he or she practicing ?
Transfer
If only one party to an insurance contract has made a legally enforceable promise , what kind of contract is it ?
Unilateral
The insurer must be able to rely on the statements in the application , and the insured must be able to rely on the insurer to pay valid claims . In the forming of an insurance contract , this is referred to as
Utmost good faith .
Which of the following is a key distinction between variable whole life and variable universal life products ?
Variable whole life has a guaranteed death benefit .
Which of the following is a statement that is guaranteed to be true , and if untrue , may breach an insurance contract ?
Warranty
When is the insurability conditional receipt given ?
When the premium is paid at the time of application
beneficiary If an annuitant receive dies ? before annuitization occurs , what will the
of Either the plan the amount whichever paid is into the the greater plan or amount the cash value