life test prep

Policies written on a third-party ownership basis are ususally written to cover what?

Policyownwer's minor children or business associates

When comparing a joint life policy to two individual life policies of the same amount on the same insurance, which condition is true?

Joint life as a lower premium then the total of the two individual policies Since right life only pays one death benefit ( at the first death ) it's premium is less than the total of two individual policies.

Which of the following is a provision found in life insurance policy's?

Reinstatement is the only policy provision; the rest are policy riders.

What are characteristics of term life insurance?

Term insurance provides a substantial amount of temporary coverage at a low cost. The lower price is Possibly due to no cash value.

A viatical Settlement, is a transaction outside of the life insurance company where the owner sells the life insurance policy for which of the following?

A percentage of the face amount of the policy The viatical statement, an insured with a reduced life expectancy sells His or her policy to a third-party for a percentage of the face amount.

An agent delivers a policy to an applicant, Who pays the initial premium but refuses to submit a statement of good health. Which of the following terms best describes what the applicant has violated?

Consideration The binding Force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of a loss.

If a life insurance company uses HIV testing as a part of its underwriting, when must an applicant be notified of the procedure?

Prior to performance of the test Prior to testing, the insurer must disclose and riding it's intent to test the applicant for the human immunodeficiency virus infection or for a specific health condition the road from HIV. The insurer must obtain the applicants written informed consent to administer the test

If the policy summary for a life insurance policy is not given when the application is taken, when is the policy summary to be given to the policy owner?

When the policy is delivered The policy summary must be provided when the policy was delivered to the owner.

To be valid, and insurance policy must have all of the following

Acceptance consideration offer (legal purpose)

Which of the following would not trigger the payment of accelerated death benefits?

Being permanently disabled Accelerated death benefits or living writers allow the early payment of some portion of the death benefit if the insured has conditions such as terminal illness, permanent Institutionalization,Or a life-threatening medical condition that requires a dramatic medical intervention. Accelerated death benefit, however, it does not cover this Disability.

An employee dies having 6 quarters of coverage during the previous 13 quarter period. What's the status of coverage does the employee have under Social Security?

Currently insured Before becoming fully insured, workers may achieve the status of currently insured (Or partially insured), and by that qualify for certain benefits. An individual is considered partly insured if he or she has earned six credits (Or quarters of coverage) During the 13 quarter period ended with the quarter in which the insured dies or becomes disabled.

The provision that sets forth the basic agreement between the insurer and the insured and states the insurers promise to pay the death benefit upon the insured's death is called the

Insuring clause The insurance clause states the insurers promise to pay the death benefit upon the insured's deathAnd sets forth the basic agreement between the insurer and the insured.

Which of the following losses would likely be covered under the accidental death rider?

Death caused by head on collision. Accidental death rider pays some multiple of the face amount if that is the result of an accident as defined in the policy; it's will not, however, including death of that results from Any health problems or disability, self-inflicted injuries, war, or dangerous hobbies or avocations.

What is the difference between a straight life policy and a 20-pay whole life policy?

Premium payment period A limited pay whole life policy, just like straight life, endows for the face amount if the insured lives to age 100. The premium is, however, completely paid off in 20 years.

What three things are true regarding annually renewable term insurance

The death benefit remains level. The policy must be renewed no matter what happens to ones health. The premium increases each year. ART is a form of level term insurance, In which the death benefit remains level in the policy may be guaranteed to be renewable each year without proof of insurability, but the premium increases annually according to the insureds attained age.

Because of an injury, an insured has been unable to work for seven months. When his life insurance premium came due, he was unable to pay, yet the policy remains in force. The policy includes

Waiver of premium rider. The waiver of premium rider causes the insured to waive future premiums if the premium payor Is disabled for a period Beyond six months or more.

J's Retirement plan meets all federal requirements and entitles him to certain tax benefits as the owner of the plan. What term best describes j's retirement plan?

qualified A qualified retirement plan and titles the owner to tax benefits. In order for a retirement planTo be qualified, certain federal requirements must be met.

A whole life policy is surrendered for a reduced paid up policy. The cash value in the new policy will

Continue to increase The new policy continues to build up it's own cash value and will remain in force until the insured's death or maturity

Dividends received on participating life insurance policies are

Not taxable because they are a return of unused premiums

According to the "common disaster "clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

The primary beneficiary died before the insured According to the "common Disaster" clause, if it cannot be determined who died first, the insured or the primary beneficiary, it will be assumed the primary beneficiary died first, so the proceeds go to the contingent beneficiary. Proceeds will go to the insured's estate only if there is no contingent beneficiary.

And annuity has accumulated the cash value of $70,000, of which $30,000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive

$70,000 If the annuitant death occurs during the accumulation., The beneficiary will receive the amount of premiums paid into the plan or the cash value, which ever is greater. In this case, the beneficiary will receive $70,000.

Which of the following Policies would not offer a policy loan option?

Term life The policy loan option is only found in policies that contain cash value. Term life policies do not have cash value.

When would life insurance be taxable by the government?

if there is a transfer for value if life insurance are collected in a lump sum payment, they are generally not subject to federal taxation. If the benefit

If an insured dies, and it is discovered that the insured missed stated his/her age or gender, the life insurance company will

Adjust the death benefit to what the premium would have been at the actual age or gender.