H&L Exam Questions (3/4)
X is a policyowner and insured for a $50,000 life insurance policy. The beneficiary is X's wife. X and his wife divorce and X remarries, transferring ownership of his policy to his new wife. If X dies without making any further changes, to whom will the policy proceeds be paid to?
Ex-Wife
Which nonforfeiture option offers the highest death benefit?
Extended Term
All of these are characteristics of Adjustable Life policy EXCEPT
Face amount can be adjusted using policy dividends
X recently died and was insured with a life insurance policy for over 5 years. During the claims process, the insurer discovered that X had understated his age by 5 years at the time of the application. In this situation , the insurer will
Pay the amount that the premium would have purchased at the correct age
X had an annual life insurance premium payment due January 1st. She died January 10th without making the premium payment. What action will the insurer take?
Pay the face amount minus the past due premium
This provision guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?
Payor clause
Graded Premium Whole Life
Premium increases each year during the early years of the contract and remains the same after that time
Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?
Variable Life
A(n) _____________ ____________ Life policy combines investment choices with a form of term coverage
Variable Universal
Which of the following policies is characterized by a flexible premium and death benefit and allows the policy-owner control of the investment aspect of the plan?
Variable Universal life
Life insurance policy that combines Term insurance with an investment element?
Universal Life
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
X, age 40, is looking to buy a life insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for X would be ?
Universal Life
In order to sell a _______ Life policy, a producer is required to register with the Financial Industry Regulatory Authority (FINRA)
Variable
Hold a life insurance license and a Securities license
Variable life products require a producer to
X took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. 5 years later , X commits suicide. How much will the insurer pay?
$50,000
X purchases a $50,000 whole life insurance policy in 2005. One of the questions asked on the application is if X engages in scuba diving, in which X answered "no". The policy is issued with no scuba exclusions. In 2010, X takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to X's beneficiary?
$50,000 minus any outstanding policy loans
A Cost of Living rider gives the insured
Additional death benefits
A Term Life rider offers the insured
Additional life coverage
What action can a policyowner take if an application for a bank loan requires collateral?
Assign policy ownership to the bank
X would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT
Beneficiary's age
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
Conversion
Which statement regarding the misstatement of age provision is considered to be true?
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered
X needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?
Decreasing Term policy
Which of these needs is satisfied by Adjustable Life insurance?
Insured's need for flexible premiums
In a Life insurance contract, an insurance company's promise to pay stated benefits is called the
Insuring Clause
Dividends paid from a life insurance policy are
Issued by the insurer
which of these is NOT an example of a Nonforfeiture option?
Life income
When a Life insurance policy exceeds certain IRS table values, the result would creat which of the following?
Modified Endowment Contracy (MEC)
Which of these is NOT considered to be a right given to a policyowner
Modify a provision in the insurance contract
All of these statements concerning Settlement Options are true EXCEPT
Only the beneficiary may select
Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE?
Taxed as Ordinary income
What type of insurance give the greatest amount of coverage for a limited period of time?
Term Life Insurance
The investment gains from a Universal Life Policy usually go toward
The cash value
The amount of coverage on a group credit life policy is limited to
The insured's total loan amount
Key Person Insurance
Type of life insurance that provides a death benefit to a business if its owner or another significant employee passes away
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
Void the policy only if it is discovered during the Contestable period and proven to be material
Upon death of last insured
When is the face amount paid under a Joint LIfe and Survivor policy?
X purchased $100,000 worth of permanent protection on himself and $50,000 worth of 10-year Term coverage for his wife on the same policy. Which policy did X purchase?
Whole Life policy with an Other Insured Rider
X is the insured on a participating life policy. Which statement is true if X's premiums are waived due to a disability?
X will still receive declared dividends
