Life and health chap. 3 and 4

In order to qualify for a conversion from a group life policy that has been terminated to an individual policy of the same coverage a person must have been insured under the group plan for how many years

5 years

The accelerated benefits provision will provide for an early payment of death benefit when the insured

Becomes terminally ill

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

Insuring clause

All of the following are nonforfeiture options except

Interest only

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed., During which, is the original recipient dies, the payments will continue to a designated beneficiary

Life income with period Certain

An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?

She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.

All of the following are general requirements of a qualified plan except

The plan must provide an offset for social security benefits.

If the 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

An absolute assignment is a

transfer of all ownership rights in a policy

What provision in insurance policy extend coverage be on the premium due date

Grace period

If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?

It is only taxable if the cash value exceeds the amount paid for premiums.

Which of the following is correct concerning the taxation of premiums in a key person's life insurance policy

Premiums are not tax-deductible as a business expense

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Purchase a single premium policy for a reduced face amount

All of the following are characteristics of a group life insurance plan except

There is a requirement to prove insurability on the part of the participants.

Which of the following insurance arrangements will be appropriate for a parent by a life insurance policy on a child where the parent is the policy owner

Third-party ownership

What is the purpose of key person insurance

To lessen the risk of financial loss because of the death of a key employee

What is the name of the clause that is included in a policy that limits or illuminates the death benefit if the insured dies as a result of war or while serving in the military

War or military service

What type of life insurance is most commonly used for group plans

annually renewable term

An insured pays an annual premium to his insurer. In return the insurer promises to pay benefits in accordance with the terms of the contract. This is called

consideration

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

6 credits

Who can make a fully deductible contribution to a traditional IRA?

An individual not covered by an employer-sponsored plan who has earned income

All of the following are true of the federal tax advantages of a qualified plan except

At distribution, all amounts received by the employee are tax free.

What is the clause that describes the method of paying the Death benefit in the event that the insured in beneficiary are both killed in the same accident

Common disaster clause

What happens when a policy is surrendered for its cash value

Coverage ends and the policy cannot be reinstated

Which of the following terms is used to name the non-tax return of unused premiums

Dividend

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusions clause

When an employee terminates coverage under a group insurance policy coverage continues in force

For 31 days.

In a direct rollover, how is the money transferred from one plan to the new one?

From trustee to trustee

Which of the following, when attached to a permanent life insurance policy, allows the policyholder to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members

Term rider

All of the following statements are true regarding tax qualified annuities except

employer contributions are not tax deductible

Life income joint and survivor settlement option guarantees

income for 2 or more recipients until they die

Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors

life expectancy

In a life settlement contract, whom does the life settlement broker represent

owner

What is the name of the insured who enters into a viatical settlement

Viator

In the executive bonus plan, Who is the owner of the policy and who pays the premium

Executive is the owner, and the executive pays the premium

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Family term rider

If a life insurance policy has an irrevocable beneficiary designation

The beneficiary can only be changed with written permission of the beneficiary

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

The cash value available to the policy owner

Which of the following statements about a suicide clause in a life insurance policy is true

Suicide is excluded for a specific period of years and covered thereafter.

Children's riders attached to whole life policies Are usually issued as what type of insurance

Term

Viatical settlements

allow someone living with a life-threatening condition to sell their existing life insurance policy and use the proceeds when they are most needed, before their death