Life Insurance

Choose the correct statement about the ten-day freely provision in a life insurance policy

A full refund of the premium is required policies return within 10 days of delivery

The master policy owner of a group insurance policy is responsible for paying the premiums submitting information about the employees forwarding the applications to the insurer and maintaining the policy

True

Select the incorrect statement from the choices below concerning insurance applications

Before the insurer can issue the policy the beneficiary missing knowledge any changes by providing his or her original initial

Which of the following is not an acceptable risk to the underwriting department of an insurance company

Substandard preferred standard all are acceptable risk

Charles received a large inheritance from his uncles estate because he can use the income he buys an annuity with the full amount of his inheritance that will begin paying him monthly payments starting the following month Charles has purchased

Single premium immediate

Survivorship life or second to die policy's

Are effectively used to cover the cost of the estate and are issued in excess of 1 million in most cases

Any transaction that involves purchasing a life insurance policy and terminating an existing policy is known as a

Replacement

Variable life insurance policies and variable annuities are primarily governed by which agency

SEC

The owner of a non-par whole life policy never misses a payment never borrowed from the policies cash value and finally reaches the age of 100 cash value is this person entitled to in comparison to the face amount

100% of the cash value which is now the same as the face amount

The California insurance code contains very specific regulations regarding the infidelity of a senior citizen to return a life insurance policy or annuity the regulation

Allows a senior cytisine a minimum of 30 days to return a life or annuity contract to the ensure they are entitled to a full refund of premium

When premiums are paid into a universal life insurance policy insurance must make certain adjustments to the cash value the company will add the current premium paid and

Deduct for expenses or mortality cost then add a current interest

From the descriptions below identify which one is a term policy

Each year the premium increases as the insured it grows older after several years the coverage and premiums and simultaneously cash value is not created

All of the following would be considered one of the three major types of lost exposures except

Financial loss exposure

Juan has been named and every bookable beneficiary and a life insurance policy Juan there for

Has vested rights to the policy proceeds that unless he gives consent cannot be affected by the policy owner nor any creditors

Which of the following supports the medical information bureau

Insurance companies

All of the following are examples of the dividend options available on a whole life insurance policy except

Life income with period certain

According to the California insurance code in which of the following classes of insurance and a binder not be issued

Life insurance

In life insurance policy's name beneficiaries is an important part of the application process choose from below the best description of a contingent beneficiary

One with the first right to receive proceeds if there is no surviving primary beneficiary and the insured dies

And organization will cease to exist an entity eligible to hold a license for all of the following reasons except

Termination of a key employee

In a overall comparison of a savings account any tax deferred annuity where the savings account and annuity both paid the same interest on the same principle amount and for the same period of time which will generate the highest return of investment dollars

The annuity will pay more because of the tax differ all qualities it has

Harold a variable annuity applicant does not request the premium to be invested in a stock or bond per folio during the cancellation. The policy is returned to the company within the cancellation. What is Harold entitled to receive

The entire premium

All of the following are true regarding a policy owner that sees is making premium payments on a 10 pay life policy and select the extended term insurance option except

The extended term policy will reflect the same cash value as the original policy

From the examples below choose the one that gives the best description of a reduced paid up nonforfeiture option

The insured decides to cease paying premiums on his 100,000 cash value policy he uses the cash value to buy a paid up policy of 40,000 face amount

Insurance companies have several departments handling various responsibilities in the issuance of policies which department is primarily involved in the selection of risk

The underwriting unit

Which of the following is false about dividends paid for my life insurance policy a dividend is

Treated as a return of exes premium paid by the owner and is therefore taxable

If no other selection is made which of the following settlement options become the default or automatic mode of settlement for the death benefit of a life insurance policy

Lump sum in cash

Which of these statements with regard to the tax treatment of life insurance is true

Death benefits are generally exempt from taxation

There are four basic classes of life insurance all the selections listed below are regarded as ordinary insurance except

A group life insurance policy

Eight annuity which may be used to help fund retirement in a few years maintains a separate account the owner purchases accumulation units this is called a

Variable

What does the incontestable clause of a life insurance policy do

It keeps the insurance from canceling the policy if after two years there is a discovery of air concealment and miss statement by the policy owner

Which of the following list any person engage in the business of acting as an insurance agent or broker who receives compensation for Arranging or directing sale in connection with the premium financing agreement to

Maintain a list of accounts in connection with compensation exempted in premium financing payments for three years

One of the provisions commonly found in life insurance is the miss statement of each class if the age of the insured is in the air but not discovered until much later the insurance company will

Make an adjustment to the face amount to properly reflect the premiums that have been paid

When the public purchase is a new Woody's they are attempting to address the risk of

Outliving the money they have saved for retirement

What type of life insurance policy gives you another right to share in the insurers profits in the form of a Dividend

Participating policy

If the owner of a life insurance policy elects to pay an annual premium, she will...

Pay less as compared to paying premiums every 6 months

Choose the correct statement about the cost of living right here at the policy

Pays an additional premium for the extra protection the writer provides and will see the face amount of the contract increase according to the increase of the index

Choose the best beneficiary designation for the following case the children are to receive equal shares of the benefit if any of the children die before the insured does the insured wishes the remaining children receive the deceased child shared equally divided among

Per capita

All of the following are used in determining life insurance rates except

Policy reserves

All of the following are reasons for an individual to purchase personal life insurance except

To cover a buy/sell agreement

Why would a business use a key person life insurance policy

To protect the company from the financial consequences of the death of a Vice President

An additional amount of premium used to pray for an accidental death benefit provision does not increase the cash value of the policy

True

An irrevocable beneficiary have certain rights to policy proceeds not shared by revocable beneficiary for example an irrevocable beneficiary must grant permission for the policy owner to borrow from the cash value

True

Decreasing term insurance is frequently used to pay the unpaid balance of the mortgage upon the death of a mortgage holder

True

The dividends in cash value continue and all features of the policy remain in force even though the insurance company not the owner is making the premiums this is a description of a blank rider

Waiver of premium

When insured becomes totally implement the disabled her condition triggers a provision that keeps the policy in force even though the insured stops making premium payments this is a

Waiver of premium provision

Beth wants to purchase more life insurance through her current policy she calls you the agent and ask your opinion you know Beth has a guaranteed insurability rider on the policy she can buy more insurance

Without the need to prove insurability on her life at a specific age

From the following identify that which constitutes the entire contract in a life insurance policy the policy

And a copy of the application when attached

A type of contract which is considered a savings instrument used for accumulating investment funds for the purpose of eventually receiving those through a systematic program of with drawl is an

Annuity

Settlement options provide a number of choices relating to health death benefits can be paid by the insured these choices

Can be made by the policy owner at the time of submission of the application can be changed by the policy owner at any time before benefits are paid can be made by the beneficiary at the time of death the insured no option with all three

Many insurance policies insured contain a comment disaster prevention the provision is designed to protect

Contingent beneficiaries

Inflation can have a tremendous and Robin affect on the purchasing power of benefits that I received from a disability income policy what type of supplementary benefit rider can be used by the insured to offset the effects of inflation

Cost of living adjustment writer

Jennifer has reached a time in her life when she wishes to begin receiving payments from her tax deferred annuity her agent has suggested that she take the money by means of the life income with ten-year certain option when she does the insurer will make payments

For at least 120 months or the remainder of her life

According to the terms of the suicide clause found in life insurance policy if uninsured commit suicide within six months after the policy is issued what will the insurance do

Refund all the premiums paid

Choose the payments from an insurance policy which are not subject to federal income taxes

The death benefit paid to a beneficiary in a lump sum

Assume two people apply for life insurance with exactly the same monthly premiums one individual buys a whole life policy and the other 810 year renewable term plan both are standard risk with no difference in their age or health rating select a statement from below which is false

The whole life policy will pay higher amount to the beneficiary should be insured died within the first 10 years

When applying for insurance there is usually the owner of the contract the insured and the applicant they may be

Three different individuals or the same person