life insurance
If an insured purchases an Annuity from which income is received, the insured is the
Annuitant
Under the internal revenue code, a portion of the employer-paid premiums of group Term Life insurance is taxable for an employee whose coverage exceeds what minimum amount?
$50,000
A 30-year-old prospective insured is considering the purchase of a life insurance policy. fI all of the following policies have the same face amount, which would require the largest annual premium?
20-Pay life
An insured, age 30, wants to purchase a whole life policy that wil accumulate cash value at a faster rate in the early years of the policy. Which of the following statements would be the producer's most appropriate response?
20-pay life will accumulate cash value faster."
J, a 30-year-old proposed insured, plans to retire at age 60 and wants to purchase life insurance that offers level premiums and life-long protection. If J also wants the policy to be paid up when J retires, J should buy:
30-pay life
Traditional individual retirement account (IRA) withdrawals are generally subject to a tax penalty fi they are made before the insured reaches what minimum age?
59 1⁄2
Which of the following items binds the insurer to coverage as of the date of the application or medical examination, whichever is later, provided that the proposed insured is determined to be an acceptance risk?
A conditional receipt
An application for a life insurance policy that is submitted with the initial premium is legally considered to be:
A consideration
Which of the following contracts is purchased with a lump sum and pays a guaranteed income?
A single premium Annuity
Which of the following features of a life policy is used to restrict coverage?
An endorsement
If a forty-five-year-old individual bought an annuity to provide income for life beginning at age sixty-five, the insured did NOT buy:
An immediate annuity
An adjustable life policyowner may take all of the following actions without providing proof of insurability EXCEPT:
Increase the face amount
An insurance company accepts an application containing several unanswered questions and Issues the policy in this situation, the company:
Must honor the policy as issued
Al of the following options are examples of Nonforfelture options EXCEPT
Renewability
An insurer's underwriter uses medical information obtained on an application to determine:
Risk classification
When an employer provides noncontributory group Term Life insurance, which of the following statements is CORRECT?
The emplover pays the entire cost of the plan.
Under a unilateral life insurance policy, which of the following parties makes the enforceable promises?
The insurance company
Which of the following features is typical of Term insurance?
The policy expires at the end of the policy period
Which of the following statements is CORRECT about a whole Life Policy?
The policyowner may borrow against the cash value of the policy
In a third-party ownership arrangement, which of the following individuals is a party to the contract?
The revocable beneficiary
Which of thefollowing types of policies offers the owner investment in money-making funds, long-term bonds, or equities?
Variable life
Which of the following parts of a policy is guaranteed to be CORRECT?
A warranty
The premium mode that results in the lowest premlum outlay is:
Annually
Able construction company wants to take out an insurance policy on its president to the cost of replacing replacing the president if the president should buy is called:
Key employee
An accelerated death benefit of a life insurance policy is also known as:
Living benefit
Aguaranteed insurability provision is best described as a: Provision that allows the insurance of additional coverage
Provision that allows insurance to be issued on children of the insured
An agent receives an unsolicited call from a prospective client who wants to purchase a large single premium life policy. When advised about early withdrawal penalties, the client does not seem concerned and is evasive when the agent inquires about the source of the funds. In this situation, the agent should take which of the following actions?
Request a cashier's check for submission to the insurance company with an application
The U.S.A Patriot Act was signed into law in response to:
September 11, 2001 attack
An annuity that allows an individual to choose the annual premium payment amount is:
Single premium
The accelerated death benefit in a life insurance contract can be accessed by:
Submitting for access 75% of the contracts death benefit upon diagnosis of a cancerous tumor
Which of the following policies insures two individuals and is designed to pay a benefit at the second death?
Survivorship life
Which of the following statements is CORRECT about the amount of the group life death benefit that the beneficiary must report for federal income tax... ?
The beneficiary does not need to report any amount
Which of the following persons has the right to change the beneficiary designation on a life insurance policy?
The policyowner
If an insured dies during a contestable period of life insurance policy the insurance company will NOT pay the policy proceeds in which of the following situations?
There was a material misrepresentation in the application
Which of the following statements is CORRECT about statements a proposed insured maxes on a life insurance application?
They are representations and deemed true to the best of the applicant's knowledge
The applicant's signature is required on a life insurance application for which of the following reasons?
To represent that the statements on the application are true to the best of the applicant's knowledge
A client should know that the indexed annuity differs from the fixed annuity in the indexed annuity:
may receive credited interest based on the fluctuations of the linked index
Which of the following provisions could double the face amount of insurance if an insured's death occurred a s the result of an unintended and unforeseen event?
Accidental death and dismemberment (AD&D) provision
A beneficiary who must consent to a change in the beneficiary designation in a life insurance policy is referred to as:
An irrevocable beneficiary
R's life insurance policy lapsed because R did not pay the premium after 60 days in order to put the policy back in force. R should take which of the following actions?
Complete an application for reinstatement and summit all back premiums due
On january3, aninsured accepts delivery of a whole life policy that has an effective date of December 22 of the insured becomes disabled on January 6 as the result of an accident, and the disability continues beyond july 6, the insurance company will:
Continue the coverage and reimburse the insured for wage loss incurred during the period of disability
Which of the following features of a group term life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?
Conversion privilege
If an insured commits suicide when a suicide clause is in effect, an insurance company wil take which of the following actions with a beneficiary's claim?
Deny the claim and return the premiums paid
Which of the following sections of a life insurance contract states that the application is part of the contract?
Entire contract provision
One of the basic concepts of insurance underwriter is that a life insurance policyowner must be the insured, a blood relative of the insured, or someone who would suffer an economic loss if the insured died. This concept is known as
Insurable interest
which of the following statements is correct about a policy loan against a life insurance contract?
Interest rates on a loan are determined by the insurance company's loss-ratio experience
Which of the following statements about a settlement option provision in a life insurance policy is correct?
It describes various methods of distributing death benefits to beneficiaries.
Which of the following statements is CORRECT regarding variable whole life insurance?
It is insurance and securities product
On May 8, a prospect filled out an application for a life insurance policy but paid no premium. The insurance company approved the application on May 14... ....... producer delivered the policy on May 26 and collected the first premium. The coverage became effective on:
May 26
Which of the following policy features permits an insured to pay premiums MORE than once every year?
Mode of premium provision
A policy that is overfunded, according to I.R.S tables, is classified as which of the following types of policies?
Modified Endowment Contract
Munderstates her age in an application for a life insurance policy. At M's death the company wil MOST likely:
Pay an amount based on what M's premium payments would have purchased if M had given her true age
An insured must take which of the following actions to continue a renewable term policy?
Pay the renewal premium
Which of the following provisions of a life insurance policy will pay a stated amount to an insured
Payor clause
In a life insurance contract, the consideration given by the applicant in exchange for the promises of the insurance company consists of the Insured's statement in the application and which of the following items?
Permission for the company to check the insured's credit
Dividends paid on a life insurance policy are:
Projected but not guaranteed
The primary purpose of including a Sucide provision in a life insurance policy is to:
Protect the insurer against the purchase of a policy in contemplation of sucide
S and W are business partners. Each takes out a $100,000 life insurance policy on the other, naming himself as primary beneficiary. S and w eventually dissolve their business, and two months later S dies. Although s was married at the time of death, the primary beneficiary is still W. however, an insurable interest no longer exists. The proceeds from S's life insurance policy will go to:
W
An applicant for life insurance must be informed of their rights under the Fair Credit Reporting Act at which of the following times?
When the producer completes the insured's application
