Life Insurance basics( quiz 2)

4. A key person insurance policy can pay for which of the following? A. Costs of training a replacement B. Loss of personal income C. Workers compensation D. Hospital bills of the key employee

A. Costs of training a replacement

8.Which of the following premium modes would result un the highest annual cost for an insurance policy? A. Monthly B. Quarterly C. Semi-annual D. Annual

A. Monthly

6. Which of the following statements concerning buy-sell agreements is true? A. Buy- sell agreements pay in the event of a medical emergency B. Buy- sell agreements are normally funded with a life insurance policy C. Premiums paid are deductibles as a business expense D. Benefits received are considered income taxable

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

11. Which is generally true regarding insureds who have been classified as preferred risks? A. They keep a higher percentage of any interest earned on their policies B. Their premiums are lower C. They can barrow higher amounts off of their policies D. They can decide when to pay their monthly premiums

B. Their premiums are lower

7. If a policy includes a free- look period of at least 10 days, the buyers guide may be delivered to the applicant no later than_________ A. Prior to filling out an application for insurance B. With the policy C. Upon insurance of the policy D. Within 30 days after the first premium payment was collected

B. With the policy

15. In a viatical settlement a terminally ill insured is expected to live no longer than how many months? A. 12 B. 18 C. 24 D.6

C. 24

13. When must insurable interest exist in a life insurance policy? A. When there is a change of the beneficiary B. At the time of loss C.At the time of application D. At the time of policy delivery

C.At the time of application

9. Which of the following methods of calculating the amount of life insurance needed takes into account the insureds wages, years until retirement and inflation? A. Lump-sum approach B. Human life value approach (HLVA) C. Needs approach D. Blackout approach

D. Blackout approach

1.At the time if initial licensing, what fee must a vatical settlement provider pay? A.$500 B.$100 C.$200 D.$300

D.$300

3.The mode of premium payment A. Does not affect the amount of premium paid B.Is defined as the frequency and the amount of the premium paid C. Is the factor that determines the amount of dividends in a policy D. Is a method used to compute cash surrender value of the policy

B.Is defined as the frequency and the amount of the premium paid

14. Which of the following would least likely be considered a legitimate need that would be paid by insurance proceeds? A. Debt collections B. Day care C. Vacation travel expenses D. Travel expenses for family to come to funeral

C. Vacation travel expenses

10. An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin? A. On the designated effective date B. On the application date C. When the agent submits the application to the company and the company issues a conditional receipt D. When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable statement of good health.

D. When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable statement of good health.

12. If an applicant for a life insurance policy and person to be insured by the policy are two different people the underwriters would be concerned about? A. The gender of the applicant B The type of policy requested C. Which individual will pay the premium D. Whether an insurable interest exists between the individuals

D. Whether an insurable interest exists between the individuals

2.Which of the following is one of the requirements for a person to be considered chronically ill? A. To have a condition that requires at least 10 days of hospitalization for 20 days of outpatient treatment B. To have a condition that renders the person unable to work 20 hours per week or more C. To have a condition that renders the person unable to perform at least 2 activities of daily living D. To have an acute illness that last for 30 days,

C. To have a condition that renders the person unable to perform at least 2 activities of daily living

5.In the event the key employee quits or is terminated, what provision provides for the owner of the policy to transfer coverage to the replacement employee, provided the new employee provides evidence of insurability? A.consideration B.misstatement of age C.free look D.Change of insured

D. Change of insured