Life Insurance Study Guide Part 2

The dividend option that can be used to leave the highest amount of death benefit to a beneficiary can be described as?

one year term

The required uniform provision which states the policyowner may adjust the beneficiary, premium mode and coverages is found in:

owners rights

In a Major Medical insurance policy, the Usual Reasonable Customary costs is best described as:

reimbursements to physicians for extra costs for services

The type of annuity that allows for different annual premium modes is known as:

flexible premium

When does the free look period begin?

hand delivering policy to applicant

The entire contract clause states that only which party may make changes to the contract?

insurer

Where can the insured find the benefits and perils listed in a policy?

insuring clause

Which of the following provisions will show the insureds benefits which are covered?

insuring clause

P has a major medical policy (deductibles and coinsurance) with a $500 deductible and 80/20 coinsurance. If P has a claim of $2,500, what amount would P have to pay total for this claim?

$900

F has an accidental death policy with Q and H as co-primary beneficiaries and his father as contingent beneficiary. Q died due to cancer last week and today F died in a motorcycle crash. What is the MAXIMUM amount F's father will receive?

0

Q has a flat deductible of $500 and coinsurance of 80/20. When Q incurs a claim of $5,000 how much will Q pay total for this claim?

1,400

A disability policy has an elimination period of 7 days. If an insured has an illness for 15 days, how long will the benefits paid?

8

Under a contributory group life insurance plan, when XYZ employer pays $45,000 in premiums, what amount is taxable to the employee?

: $0

Which of the following is NOT a duty of the commissioner of insurance?

: Activate claims reserves

In Texas, the term transacting business from the producers standpoint includes which?

: collecting premiums

Which of the following options will reduce the death benefit?

Accelerated payment

An applicant purchases insurance but does not pay the premium. The agent tries to deliver the policy, but the insured is not home. On April 21st, the agent hand delivers the policy and collects the premium. When is coverage effective?

April 21st

Company A has five stockholders within the company each owning 20% of the company, which of the following policies would be best suited to distribute the shares among the remaining stockholders if one becomes disabled?

Disability Buy-Sell.

A person was traveling on vacation and obtains a sickness that makes them unable to work for 6 weeks. Income benefits would likely be paid under which policy?

Disability Income

Which type of insurer must have an open enrollment period of 31 days every 12 months?

HMO

Which of the following is NOT true about the guaranteed insurability rider?

It allows for death benefit increases without higher premiums

The type of insurance policy contingent upon being ineligible to complete 2 Activities of Daily Living (ADL's) is known as:

Long Term Care

The IRS has deemed a policy that is over-funded will be known as?

Modified Endowment Contract

Under the notice of claims clause, which would NOT constitute notification?

Notifying the physician in the hospital that the insured has incurred a claim

Which of the following best describes a Modified Endowment Contract?

a whole life policy with payments made too early

An insured completes an application and the producer submits it to underwriting. The underwriter issues the policy. What is still needed for this to become a legal contract?

consideration (money)

The provision of a policy that determines the method of payment would be best described as:

the premium payment mode

A customer calls a producer and wishes to inquire about purchasing insurance over the phone, what is the best course of action?

Answer any relevant questions and schedule an appointment to meet in person

If a person takes a loan against a Variable Universal Life insurance policy, what will most likely happen next year?

Interest will accrue on the loan

The insured may change all of the following on an adjustable life policy EXCEPT:

Irrevocable beneficiary

J completed his application on April 20th, paid his initial premium and was issued a receipt. On April 29th the underwriter issued the policy and mailed it to the agent. The agent made 3 attempts to deliver the policy but was unsuccessful. On May 20th the agent placed the policy in his desk and forgot about it, which of the following statements is true?

J was insured on April 29th

J has an Accidental Death & Dismemberment policy in the amount of $100,000 with his mother as primary beneficiary. J is involved in a car accident and dies, 2 months later J's mother dies. How was the death benefit paid?

J's mother received the death benefit

All of the following are Whole Life Policies EXCEPT:

Joint Life

X is the primary beneficiary, Y is the insured and Z is named as contingent beneficiary. One day X is driving Y and Z to Austin Texas for the SXSW festival when Y, the front seat passenger, sees a deer jumping across the street. Z tells X to swerve and but X swerves the wrong way into oncoming traffic. X and Z die immediately at the scene, who receives the benefits?

Nobody

Which of the following riders will waive the insureds premium until a child reaches a certain age?

Payor Benefit

If an insured is injured at work while covered by Workers Compensation, Group Health Insurance and Medicare, which plan would be considered primary under the Coordination of Benefits clause?

Workers Compensation

Which of the following would be considered misrepresentation in an advertisement?

an insurer exaggerates their dividend payouts in a newspaper advertisement

M is 25 years old and looking to purchase a permanent whole life policy to cover her for burial expenses later on in life. She understands that inflation devalues the effect of life insurance benefits, which rider can she add to the policy to ensure it will maintain its purchasing power in the event of death?

cost of living adjustment rider

A copy of the application and the policy together comprise of which document?

entire contract

Under the Uniform Policy Provisions, what is the MAXIMUM amount of time that may go by before a policy is considered to lapse?

31 days

Which of the following does NOT describe a whole life insurance policy?

Policy builds cash value quicker the younger the insureds age due to stock market gains

What must be signed by the applicant if no premium was collected and the agent is delivering the policy?

Statement of Good Health

P has a basic hospital and surgery policy. After being admitted to the hospital, P files a claim with his insurance company. How much will his play pay?

Up to the limits in the policy

A woman is searching for a life insurance policy where she has a separate account with self directed investments. Which policy would she prefer?

Variable Universal Life

Which of the following would not occur if the insured made extra payments into an adjustable life policy?

lower non-forfeiture value

J normally pays her premiums annually on July 1st. She has a claim midway through the month, but pays her premiums immediately on July 31st. How will the insurer decide the claim?

pay the claim

All of the following are non-forfeiture options except:

policy loan

Which of the following best describes a Limited Pay life insurance policy?

premiums are made for a predetermined timeframe

If a policyowner wants to retain rights over their beneficiaries, the policyowner would choose which designation?

revocable

An irrevocable beneficiary may only be changed by whom?

the beneficiary themselves