If the insured does NOT pay the premium with the application, when does a life policy take effect?
a. Immediately upon the issue of the policy
b. Upon completion of the application including the required physical exam
c. The date that the under writer app
D. upon policy delivery and payment of the initial premium
Jacob owns a Whole Life insurance policy and wants to borrow against its cash value. which of the following statements is true?
a. he must pay the interest rate indicated in teh policy or it will be addd to the policy loan.
b. unpaid loans are forgiven at
a. He must pay the interest rate indicated in the policy or it will be added to the policy loan.
which of the following statements concerning group insurance is true?
a. it allows underwriters to look more direcltly at specific individual health histories.
b. all members of the group must participate if the employer pays 75% of the premium
c. it enco
c. it encourages adverse selection over time
which one of the following plans allows cash accumulation funds to be invested in a specified set of stocks or stock indexes and has cash value that fluctuates with the value of the investment?
a. Variable annuity
b. retirement speculation life insurance
a. variable annuity
which of the following insurance plans describes a group of people who dont qualify for group insurance but apply individually and have a group-type policy issued to them with the program administered by a sponsor?
a. franchise group insurance
b. key-empl
a. franchise group insurance
which of the following would an underwriter consider in evaluating an application?
a. fair credit reporting act
b. agent's report
c. paramedic report
d. all of the choices
d. all of the choices
Which policy requires premium payments for the longest period of time?
a. decreasing term insurance
b. whole life insurance
c. limited-pay whole life insurance
d. retirement income endowment insurance
b. whole life insurance
which of the following is not a reason for purchasing term insurance?
a. to protect mortgages
b. to protect installment loans
c. to build cash value
d. to protect against loss of income
c. to build cash value
when does a life insurance policy take effect?
a. upon completion of application, the required medical exam, and payment of the initial premium
b. upon policy delivery
c. immediately upon the issue of the policy
d. the date the underwriter approves the po
a. upon completion of application, the required medical exam, and payment of the initial premium
which of the following is a characteristic of term insurance?
I. the policy endows at age 100
II. a decreasing term policy is automatically renewable.
III. there is insurance protection for only a limited period of time
III only
which of the following is true if the policy owner is someone other than the insured?
I. the owner must have insurable interst in the insured's life.
II. the owner must sign the application
III. the insured must sign the application
I,II,&III
which of the following is a business agreement that provides for a surviving business parner to buy out another at his or her death?
a. estate endowment life
b.decreasing term insurance
c. survivorship life
d. buy-sell agreement
d. buy-sell agreement
in which of the following ways could an insurance company rate a policy?
a. require the waiver of premium option
b. charge a surcharge on top of the regular premium
c. disallow policy riders
d. decrease the death benefit
b. charge a surcharge on top of the regular premium
which of the following plans is a whole life insurance policy with a decreasing term rider with benefits used to provide a family income?
a family maintenance plan
b. disability life income insurance plan
c. family life insurance plan
d. family income pla
d. family income plan
Which of the following statements concerning dividends is true?
a. paid-up additional insurance purchased with dividends accrues no cash value
b. dividends may never be paid in cash
c. the owner has the right to choose the dividend option
d. dividends are
c. the owner has the right to choose the dividend option
Which of the following statements concerning group insurance is or are true?
a. each covered person is issued a certificate.
b. all of these
c. group insurance is usually Whole Life Insurance
d. Most plans are designed to encourage adverse selection
a. each covered person is issued a certificate
the ten-day free look provision is described by which of the following?
a. it provides the insured 10 days to look for a better policy.
b. it gives the insured 10 days from the date of issue to review the policy without premium charge.
c. it states that t
d. it gives the insured 10 days from date of delivery to return the policy for any reason without charge.
which of the following would NOT be a reason for purchasing Whole Life Insurance?
a. Non-forfeiture options that the owner can obtain at surrender.
b. it provides the greatest amount of insurance possible at the lowest premium rate possible
c. level premi
b. it provides the greatest amount of insurance possible at the lowest premium rate possible
Life insurance based upon two or more lives, with benefits paid only upon the second death is called...
a. Estate Endowment Life
b. survivorship Life
c. decreasing term insurance
d. buy-sell agreement
b. survivorship life
which is NOT a right of ownership in a life insurance policy?
a. receiving dividends
b. changing settlement options
c. changing irrevocable beneficiaries
d. using the policy as collateral for a bank loan
c. changing irrevocable beneficiaries
which of the following is true if a policy includes an Aviation Exclusion?
a. the insured who begins flying lessons 10 years after the policy is issued will be covered.
Anne bought a Whole Life policy with a Guaranteed Insurability provision. This means which of the following?
a. she can convert to any policy with a lower premium rate without evidence of insurability
b. she is guaranteed a certain interest rate on the ca
d. anne may purchase additional insurance at set periods of time with no evidence of insurability
who CANNOT be an owner of a life insurance policy?
a. the insured
b. a disinterested third party that has no financial interest in teh insured's life
c. a family member
d. a creditor
b. a disinterested third party that has no financial interest in the insured's life
which of the following objectives would a key employee life insurance plan accomplish?
a. secure children's college education
b. pay estate taxes
c. secure widow's income
d. provide a business with operating cash at the death of a key executive
d. provide a business with operating cash at the death of a key executive
__ is often used to provide funds for a family to pay off a mortgage or other loans.
a. a buy-sell agreemnt
b. survivorship life
c. estate endowment life
d. decreasing term insurance
D. decreasing term insurance
Insurance is based on a theory of probability called which of the following?
a. the law of large numbers
b. the law of mortality
c. the law of largess
d. the law of probabilty
a. the law of large numbers
which of the following is NOT a non-forfeiture option?
a. extended term insurance
b. Lump sum
c. dividends
d. paid-up insurance
c. dividends
which of the following annuity options would yield payments in a fixed amount each month until principal and interest are depleted?
a. fixed period
b. variable annuity
c. Life annuity, period certain
d. life annuity, fixed amount
d. life annuity, fixed amount
which of the following is a financial interest that the policyowner must possess at the time that a life insurance policy is purchased?
a. monetary interest
b. insurable interest
c. medical interest
d. business interest
b. insurable interest
which of the following might typically be entered into between an employer and one of his best employees?
a. industrial life insurance
b. whole life insurance
c. key employee protection
d. buy-sell agreement
c. key employee protection
two business partners own life insurance on each other. In the event of death of one of the partners, which of the following contracts will allow the survivng partner to purchase the deceased partner's interest?
a. survivorship life agreement
b. key emplo
d. buy-sell agreement
which of the following statements concerning Social Security survivor benefits is not true?
a. the covered individual must have achieved currently insured or fully insured status prior to death
b. none of the choices
c. benefits can be paid to widows who
d. benefits are paid to dependent children through age 22
John Scam listed his age as 29 on his life insurance application. When he died 3 years later, it was discovered he died at age 38. Which of the following statements is true of how teh insurer will handle benefit payouts?
a. the insurer will have to pay th
b. the insurer will reduce beneifts to what it would pay in relation to the insured's actual age.
which of the following is/are a cost savings typically associated with group insurance?
a. all of these
b. individual underwrites on only those who do not accept coverage within the enrollment period.
c. master policyholder assists in policy administratio
a. all of these
Jeanette purchased a life insurance policy on January 4, 1997. During the next year she was very depressed and committed suicide on february 3, 1998. How much will the insurer pay towards her life insurance policy benefits?
a. nothing will be paid by the
c. return of premiums only