Summit Licensing Test
A(n) __________ _____________ Life policy combines investment choices with a form of term coverage
Variable Universal
Hold a life insurance license and a securities license
Variable life products require a producer to
Assign policy ownership to the bank
What action can a policyowner take if an application for a bank loan requires collateral?
Face amount plus the policies, cash value
What does the face amount plus cash value policy pay upon the insurance death
Statement guaranteed to be true
What is the best way to describe your warranty?
Family Maintenance Policy
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
Family Maintenance Policy
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?
term life
What type of life insurance gives the greatest amount of coverage for a limited period of time?
Joint Life Policy
What type of life policy covers 2 lives and pays the face amount after the first one dies?
Modified Endowment Contract (MEC)
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
Conversion Provision
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?
When the insured dies or at the policies, maturity date whichever happens first
When is the face amount of a whole life policy paid?
Inception of the contract
When was insurable interest exist for life insurance contract to be valid?
Premiums may be applied as a credit against income tax
Which of the following actions is NOT possible with a Universal Life policy?
increase face amount
Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy?
contract
Which of the following consist of an offer, acceptance and consideration?
10 year convertible term
Which of the following types of Term Life policies most likely contains a Renewability feature?
AD&D
Which of the following types of policies pays a benefit if the insured goes blind?
principal
Which of these is not a type of agent authority
Modified whole life
Which of these life price is not considered interest sensitive
Modified whole life
Which of these life products is not considered interest sensitive
contract
Which of these require an offer, acceptance, and consideration?
Variable life
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
decreasing term
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
Life paid up at age 70
Which of these would be considered a limited pay life policy
Cash value maybe borrow against
Which statement about a whole life policy is true
Modified endowment contract
Which type of policy is considered to be overfunded, as stated by IRS guidelines?
policyowner
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
insurance company
Who makes the legally enforceable promise is in a unilateral insurance policy
Stranger-Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a(n):
third-party with no insurable interest
How does a typical Variable Life Policy investment account grow?
through mutual funds, stocks, bonds
20-pay life
J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?
modified premium life
J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of Life Insurance policy is this?
Modified whole life
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?
Automatic Policy Loan
S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?
cash value
The investment gains from a Universal Life Policy usually go toward:
reserves
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to his policy holders is called
are lower during the policy's early years
Under a Graded Premium policy, the premiums
The renewal premium is calculated on the basis of the insured's attained age
Under a Renewable Term policy,
cash values are determined by interest rates
Under an interest sensitive whole life policy
15-year decreasing term
A 15-year mortgage is best protected by what kind of life policy?
Adhesion
A contract, where one party, either accepts or rejects the terms of a contract written by another party is called a contract of what
Payor Provision
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?
Risk Retention Group
A group on insurance company that is formed to assume and spread the liability risk of its members is known as a
Investor-Originated Life Insurance
A life insurance arrangement, which circumvents insurable interest statues is called
Insurable interest
A life insurance policy would be considered a wagering contract without
variable life
A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as:
Fraternal Benefit Society
A nonprofit Incorporated society that does not have capital stock, and operates for the sole benefit of its members is known as
The insurance company
A policy of adhesion can only be modified by who
decreasing term rider
Additional coverage can be added to a Whole Life policy by adding a(n):
Modified whole life
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them, EXCEPT for:
When consideration is provided by one of the parties to the contract
At what point does an informal agreement become a binding contract?
level term
D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?
F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?
Decreasing term policy
Declared by the insurance company
Dividends, payable to a policy owner are
10 years
G purchased a Family Income policy at age 40. The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?
without evidence of insurability
If a 10-Year Term Life policy contains a Renewability provision, the policy will renew
Insuring Clause
In a Life insurance contract, an insurance company's promise to pay stated benefits is called the:
Key person insurance
In architecture firm with stand to lose a lot of money in the event of death of a project manager which type of policy should the firm purchase on this project manager?
If material to the risk, false representation will void a policy
In regards to representation of warranties, which of these statements is true
conditional
Insurance contractors are known as ______, because certain future conditions or act must occur before any claims can be paid
performance is conditioned upon a future occurrence
Insurance policies are considered aleatory contract, because
Contract of adhesion
Insurance policies are offered on a "take it, or leave it "basis, which makes them
endowment at age 70
P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own?
straight life policy
Premiums are payable for as long as there is insurance coverage in force
Aleatory
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q die suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?
renewable
T has a turn policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?
Varies according to the contract
Term life policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period:
Upon the insured's death during the term of policy
Term, life insurance policy matures
Initial Premium
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and
partial withdrawal features beyond a surrender charge period
Whole life insurance policies are contract, leave guarantee, derive, which of the following except
Whole life policy with an other insured rider
Y purchased $100,000 worth of permanent protection on himself and $50,000 worth of 10-year Term coverage for his wife on the same policy. Which of these policies did Y purchase?
change the policy's interest rate
a company that owns a life insurance policy on one of its key employees may do all of the following EXCEPT
variable life
a life policy with a death benefit and cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as
will lose many of its tax advantages
a policy that becomes a modified endowment contract
expense charges
a universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, cost of insurance and the
Fair Credit Reporting Act
an insurance applicant must be informed of an investigation regarding his/her reputation and character according to the
long term care
an insureds inability to perform two or more activities of daily living may trigger which type of life policy rider?
When the cash value equals the death benefit
at what point does a whole life insurance policy endow
S is covered by a whole life policy. Which insurance product can cover his children?
child term rider
issued in an amount not to exceed the amount of the loan
credit life insurance is
insured
if a contract of adhesion contains complicated language, to whom would the interruption be in favor of
exclusion
in a life insurance policy, which feature states that the policy will not cover certain risk?
Owner's Rights
in a life insurance policy, which provision states may select policy options, designate, and name of beneficiary, and be the recipient of any financial benefits from the policy?
unilateral
in an insurance contract, the insure is the only party who makes a legally enforceable promise. What kind of contract is this?
Variable
in order to sell a(n) _______ life policy, a producer is required to register with the financial industry regulatory authority (FINRA)
level
k is looking to purchase renewable term insurance. which of these types of term insurance may be renewable?
legal purposes (insurance interest)
stranger originated, life insurance (STOLI) has been found to be in violation of which of the following contractual elements
Fiduciary
taking receipt of premiums and holding them for the insurance company is an example of
expired at the end of the policy period
term insurance has which of the following characteristics
Negotiating
what is not considered to be an element of an insurance contract?
Universal Life Insurance
what type of life insurance incorporates flexible premium and an adjustable death benefit
participating
when a policy pays dividends to its policyholders, it said to be?
insurable interest in the proposed insured
when the third-party ownership is involved applicants who also happen to be the stated, primary beneficiary are required to have?
increase face
which of the following actions require a policy owner to provide proof of insurability in an Adjustable Life policy?
policy's guaranteed dividend table
which of the following information is NOT required to be included in a whole life policy
1970: Fair Credit Reporting Act (FCRA)
which of the following requires insurers to disclose when applicants consumer or credit history is being investigated
Exceeded the maximum amount of premium that could be paid into a policy and still have it recognized as a life insurance contract
which of these statements describes a modified endowment contract (MEC)
A minimum guarantee death benefit is provided
which statement is TRUE regarding a variable whole life policy
insured
who has the option to renew a renewable term policy
