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Life Insurance Practice Exam Flashcards | StudBud
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Life Insurance Practice Exam
Life Insurance Practice Exam
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Flashcards
32 cards
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32
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1
The premium payment mode can be best described as the
Mortality table used to calculate the premium.
Payment method of the policy premium
Frequency with which the policy premium will be paid.
Amount of the policy premium
2
The policy and a copy of the application, along with any riders and amendments, is called the
Entire contract.
Primary contract.
Whole contract.
Complete contract.
3
Underwriting is the process of
Determining insurance companys risk regarding a proposed ins
Comparing policies between insurance companies
Dividing business between two insurance companies
Writing policy forms to conform to state insurance departmen
4
The MIB is a nonprofit trade association that maintains
Motorist information on applicants for life & health insuran
Classifications of risk for previous policyowners.
Maternity information on female applicants for life & health
Medical information on applicants for life & health insuranc
5
At 25, a individual purchased a decreasingterm policy. Wht does that say abt the coverage & pre
Coverage decreases but the premium stays the same.
Premium decreases but the coverage stays the same.
Both coverage & the premium decrease.
Neither the coverage nor the premium decreases
6
In a renewable term policy additional premium pays for the right to renew the policy
the same premium amount regardless of the insured's health
with a higher coverage amount
at the same premium amount
with the same coverage regardless of the insured's health
7
If a misstatement of age is discovered during the processing of a life insurance claim, what wi
Rescind the policy cause incorrect info was given on the app
Adjust the death benefit based on the premium that were paid
Automatically pay the total death benefit to the primary ben
Pay half of the death benefit to the primary beneficiary
8
A current assumption or interest-sensitive whole life policy has
premiums that the policyowner may change based on the certai
Higher guaranteed cash value interest rate than traditional
premiums that may vary according to the interest rate flucat
interest rate assumptions that allow the policyowner to chan
9
What do employees receive under a group life contract?
Buyer's guide
Individual policy
Certificate of insurance
Master policy
10
A producer accepts a completed application w/o the 1st premium, when does coverage become effec
when the last outstanding medical requirement is completed
When the policy is delivered & the first premium is paid
When the insurance company approves the application
When the insurance company receives the application
11
Variable universal life insurance offers a policyowner which of the following features?
The ability to increase the death benefit
A face amount that must stay level
Dividends that are guaranteed for the life of the policy
Premiums that increase each year for a specified # of years.
12
What is the purpose of the grace period in life insurance policies?
To extend coverage past the end of the policy's term
Protect the policyowner against an unintentional lapse
To allow a month of free coverage
To allow the policyowner to examine the policy
13
Which statement is INCORRECT concerning policy dividends?
Dividends are paid on participating policies.
Policyowners have several options to receive dividends.
The insurance company may guarantee dividends.
Dividends are not taxable.
14
An annuity that is purchased with a lump-sum payment & begins income payments within 1 yr is?
Periodic deferred annuity.
Single premium immediate annuity.
Single premium deferred annuity.
Flexible deferred annuity.
15
A universal life contract expires when
The cash value account becomes too small to pay the cost
The outstanding loan equals the death benefit
A regularly scheduled premium payment is missed.
The cash value equals the death benefit
16
A life insurance death benefit paid in a lump sum to a beneficiary is
Subject to federal, state, and estate taxes.
Not subject to estate taxes but subject to federal taxes.
Not subject to any taxes.
Subject to federal taxes only.
17
Wht age can a participant receive distribution from a qualified plan w/o incurring a 10%penalty
59 1/2
55 1/2
59
45
18
Which settlement option guarantee an income for two or more recipients for as long as they live
Life income
Fixed Amount installments
Single life option
Joint and Survivor
19
When the business is the owner, benefit payor, & beneficiary of a life insurance policy,
Buy-sell agreement
Key person policy
Stock reputation
Executive bonus plan
20
How long does an employee have to convert to a group life policy to an individual policy w/o ev
60 days.
10 days.
31 days.
90 days.
21
Which of the following is NOT a nonforfeiture option of a whole life policy?
Cash surrender Value
Accumulate at interest
Reduced paid-up insurance
Extended term
22
What does the payor benefit rider protect?
Contestability
Premium payments for a juvenile policy
Disability claims benefits
Grace period for a whole policy
23
An annuity is considered fixed when it does all of the following EXCEPT
Provides level income payments
Pays a specific $ amount for each annuity benefit payment
Guarantees a minimum rate of return.
Provides the annuitant with the guaranteed or current intere
24
The legal transfer of all of part of a policyowner's rights, title or interest is called
Modification.
Assignment.
Waiver.
Counterfeit.
25
Which of the following individuals would NOT sign an application for life insurance policy?
The beneficiary
The proposed insured
The agent
The owner if different from the insured
26
A beneficiary who has a vested interest in the proceeds of a life insurance policy is the
Secondary beneficiary.
Irrevocable beneficiary.
Contingent beneficiary.
Primary beneficiary.
27
To prevent individuals from profiting from a loss, insurance companies must be certain that
Face amount of the policy is only 5 Xs the insured's annual
The owner and insured are related.
Insurable interest exists.
There is no cash value in the policy.
28
Type of policy allows to change the amount of the death benefit, amount of premium, & type cove
Variable life
Universal life
Adjustable life
Decreasing term life
29
Wht is the risk classification those who are insurable, but present a higher than average risk
Substandard
Declined
Preferred
Standard
30
All of the following apply to the waiver of premium rider EXCEPT
Company continues the policy in force if the premiums were
Premium is waived only if the insured is permanently disable
There is waiting period of 6 mo before the premium is waived
There is no charge for this rider.
31
Which rider would allow additional insurance at specified dates or events, w/o evidence of insu
Disability income
Return of premium
Guaranteed insurability
Cost of living
32
Each of the following is a typical characteristic of group life insurance EXCEPT
Individual certificates are issued.
The master policy is issued to the sponsor of the group.
The plan has a grace period.
Evidence of insurability is usually required.
