Life and Health: Life Insurance Basics
At the time of initial licensing, what fee must a viatical settlement provider pay?
300
Violation of unfair discrimination law may result in all of the following penalties EXCEPT
Fines of up to $1000 for each act
An applicant wants to buy a life insurance policy in which he can count on receiving the same benefits as stated in the contract. Which type should he buy?
Fixed
All of the following are business uses of life insurance EXCEPT
Funding against general company financial loss
Another name for a substandard risk classification is
rated
Which of the following is NOT an example of insurable interest?
Debtor in Creditor
Who negotiates viatical settlement contracts on behalf of a viator
Viatical settlement broker
Who effectuates viatical settlement contracts
Viatical settlement providers
a key person insurance policy can pay for which of the following?
costs of training a replacement
According to the 2001 CSO Table, at what age will the terminal reserves be reached?
120
Once a mail-order solicitation has been filed, how long may it be used?
2 years
Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?
Human life value approach
Who makes up the Medical Information Bureau
Insurers
How often may a viatical settlement provider contaact an insured regarding the insured's health status if the insured's life expectancy is more than one year?
Once every 3 months
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?
Predicted needs of the family after the insured's death
Which of the following best details the underwriting process for life insurance?
Selection, classification, and rating of risks
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
Signed waiver of premium
Which of the following is an example of liquidity in a life insurance contract?
The cash value available to the policyowner
An insured has entered into a viatical settlement but decides that he would like to back out of the contract. Which of the following is true?
The insured has 15 days from the effective date of the contract to rescind it
An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?
Variable
When must insurable interest exist in a life insurance policy?
at the time of application
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a
executive bonus
An underwriter may obtain information on an applicants hobbies, financial status, and habits by ordering an
inspection report
How long must insurers maintain the evidence from the agent that a disclosure statement about a life insurance policy was delivered to the applicant
3 years
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
Bob has sold his life insurance policy to a viatical settlement provider. HOw long does the provider now have to inform Bob's insurer that his life policy has been viaticated?
20 days
Where would the underwriter find relevant information not presented by the applicant but communicated by the producer?
Application
Which of the following statements regarding HIV testing for life insurance purposes is NOT true?
Insurers are barred from requesting HIV testing
Which of the following is NOT an example of a business use of Life Insurance?
Workers Compensation
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
All of the following are personal uses of life insurance EXCEPT
Buy-sell agreement
Which of the following would describe a legal document which would dictate who can buy a deceased partners share of a business and for what amount?
Buy-sell agreement
Which of the following statements concerning buy-sell agreements is true?
Buy-sell agreements are normally funded with a life insurance policy
All of the following are characteristics of group life insurance EXCEPT
Premiums are determined by the age, sex, and occupation of each individual certificate holder
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
The date of the medical exam
Which of the following is NOT true regarding the needs approach method of determining the value of an individual's life?
Need is predicted using the number of years until the insured's retirement
An underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require?
Attending Physician Statement (APS)
Attempting to determine how much insurance an individual would require based upon their financial objective is known as
Needs approach
Which of the following documents must be provided to the policyowner or applicant during policy replacement?
Notice Regarding Replacement
In order to become licensed to become a viatical settlement provider, an application must be made with
The insurance department
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
Insurance producers must ensure that contracts they recommend in the best interest of the insured. This is called
Suitability
Are insurance company underwriters allowed to discriminate?
Yes, but not unfairlty
Which of the following defines the owner of a life insurance policy who seeks to sell the policy due to a terminal or chronic illness?
Viator
An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information?
Application