Life Insurance Basics

an underwriter may obtain information on an applicants character, financial status, and habits by ordering a(n)

Investigative consumer report

which of the following premium modes would result in the highest annual cost for a life insurance policy?

Monthly

Who makes up the Medical Information Bureau? (MIB)

Insurers

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

The cash value available to the policy owner

In life insurance, an insurable interest between the policy owner and the insured must exist

at the time of the application

what is the primary source of information used for insurance underwriting?

application for insurance

if can applicants health is poorer than that of an average applicant, the policy may be issued

substandard

what is the purpose of key-person insurance?

To cover decreased business earnings due to the death of a key employee

During replacement of life insurance, a replacing insurer must do which of the following?

obtain a list of all insurance policies that will be replaced

upon policy delivery, the producer may be required to obtain any of the following EXCEPT

signed waiver of premium

In life insurance, which of the following is NOT required to have an insurable interest in the insured?

The beneficiary

which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy

which of the following methods of calculating the amount of life insurance needed takes into account the insureds wages, years until retirement , and inflation?

Human life value approach

which of the following describes the specific information about a policy?

Policy Summary

for what reasons may a life insurance producer backdate a life insurance policy?

to avoid an increase in premium rate for the insurance