A prospect statements made in the application for insurance, constitute a part of which of the following?
Consideration clause
Dividend projections may be included in a proposal for life insurance when which of the following is true?
There is a clear statement that the payment of future dividends is not guaranteed
And insurable interest must exist when?
A life insurance policy is issued
Mr. Peabody only say 30 pay life policy that he purchased at the age of 30. The cash value will equal the face amount of the policy when he reaches the age of?
100
In a policy insuring the life of a child, which of the following allows the premium to be waived in the event of the death or disability of the person responsible for the premium payments?
Payer provision/ Death of payor Rider / payor death benefit rider / payor benefit clause
If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to
Charge an extra premium
Which statement about the reinstatement provision is true
It requires the policyholder to pay, with interest, all the premiums that are in arrears in order for the policy to be reinstated
A parent who wishes to have complete control of a son's life insurance policy until the Sun reaches age 25 can do so through the use of?
Ownership provision
An applicant for a life insurance policy is a student pilot, which of the following is true?
They would have to pay more than a standard risk for their coverage
An insured died during the grace period of her life insurance policy and had not paid the required annual premium. The insurance company is obligated to pay which of the following to the beneficiary
The the face amount of the policy less any earned premiums
On May 8th, a prospect filled out an application for a life insurance policy but paid no premium. The insurance company approve the application on May 14th and issue the policy on May 15th. The producer delivered the policy on May 26th and collected the f
May 26th
The life insurance policy clause that prevent an insurance company from denying a claim payment of a death claim after a specific period of time is known as the
Incontestability clause
At age 30, Clark Peterson wishes to purchase a whole life policy. His producer explains that he can pay for the policy in several ways. One method is called 20 year pay life, and another, straight life. Clark wishes to know which plan will accumulate cash
20 day life will accumulate cash the fastest
Which of the following statements is true about a policy assignment
It transfers the ownership rights under the policy to the extent expressed in the assignment form
Statements made by an applicant for a life insurance policy that are supposed to be true are referred to as
Representations
A single premium used to buy a whole life policy will pay up the policy
For the life of the policy
A producer takes an application from a proposed insured without receiving payment for the first premium. The insurance company issues the policy and, when the producer visits the proposed insured to deliver it, the producer realizes that the health of the
Refuse to deliver the policy or to accept any premium offered
The time period covered by the 10 day free look provision of a life insurance contract starts
When the insured received the contract and make the first premium payment, if needed
Which policy provides the greatest amount of protection for an insurance premium dollar as well as some cash accumulation
Whole Life policy
A $10,000 life insurance policy with a triple indemnity clause has been in force for three years. The insured is injured in a train wreck and dies in the hospital 5 months later. The proceeds payable under the policy would be
$10,000 for triple indemnity death must occur within 90 days
Which of the following is an example of a limited pay life policy
Life paid up at 65
Which of the following is a non forfeiture option that provides continuing cash-value build up
Reduce paid-up
In the information of a life insurance contract, the special significance of a conditional receipt is that it
Is intended to provide coverage on a date earlier than the date of the issuance of the policy
Which type of insurance policy would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources
Term life
Which statement would a typical suicide clause in a life insurance policy is true
Suicide is excluded for a specific period of years and covered there after
A client pays $4,000 in premiums on his 50000 whole life policy that has a cash value of 5000. If he takes cash surrender, his tax implication will be
1000 ordinary income
A 54 year old client surrenders his 403 B tsa for cash. His tax implications would be
The full amount is taxed as ordinary income plus a 10% penalty on the full amount distributed
A client with a 300000 modified endowment contract paid in 70000 in premiums his cash value is 900000. If he takes cash surrender what percentage of the distribution is taxed as ordinary income?
30% : he received 100,000 paid in 70,000 at least 30,000 which equals 30%
Which statement about a renewable term policy is true?
It is renewable at the option of the insured without having to prove insurability
Which contract/policy requires a series of benefit payments be made at specified intervals?
Annuity
Which individual policy conversion is usually permitted without any evidence of insurability?
Conversion from a term policy to a whole life policy
Which policy is generally used to accumulate funds for education?
Endowment
The provision in a life insurance policy that provides protection against unintentional policy lapses is known as the
Automatic premium loan provision
Which settlement option might provide payments that exceed the proceeds of the policy and the interest earned?
Life annuity
The owner of a business is insured under 100000 key employee life policy that contains a double indemnity clause and a suicide clause. The business has paid the annual premium of $2,000. The six months after the inception date of the policy, the insured c
Only the $2,000 that was paid into the policy because he committed suicide inside of two years
An applicant has been denied insurance coverage because of information contained in a consumer report. According to the Fair Credit Reporting Act, all of the following statements are true about this situation except
The applicant has the right to obtain a copy of the consumer report directly from an insurance company that used to report. They are not required to give a copy
All of the following are true about universal life except
The death benefit paid to a beneficiary is taxable as ordinary income. Not true because it's just like any other life insurance policy
If the beneficiaries main objective for the death benefit proceeds is a state conservation, they would most likely select which settlement option upon death of the insured
Interest
And insurance prospect wants to purchase a policy that will accumulate the largest amount of cash by the age of 65. Which policy would be most likely to satisfy the prospects needs?
Endowment at age 65
Seth brown, whose wife is a business partner, find a life insurance policy on his wife's life. Because of the third party ownership, the beneficiary should be the
Policyholder
Cheryl brown, 827, is advised by her producer to purchase life insurance to cover a 20 year amateur rised 50000 business improvement loan. Which plan would adequately protect Mrs Brown at the minimum premium outlet?
A $50,000 decreasing term policy for 20 years
Which statement about the misstatement of age provision in a life insurance policy is true?
If the insured's age has been miss understated, it provides that the death benefit smaller than the face amount of the policy will be payable
A husband and wife are going to attend and decide to select the joint life payout option upon amateurization. They will receive monthly annuity payments from the insured until
Either the husband or wife dies because they didn't select joint survivorship
Which statement is true about the premium payment schedule for a whole life policy?
Premiums are payable throughout the insured's lifetime, the coverage continues until the insured's death
Cash surrender is available on an annuity in which of the following situations
During the accumulation.
All of the following are part of a life insurance policy accept
Conditional receipt
When someone other than the insured is the owner of a life insurance policy, the owner may do all of the following without the insured's consent except
Increase the amount of insurance
Fixed life insurance products are guaranteed by the insurance companies
General account
Which of the following is true of the duties of the National Association of Securities Dealers also known as NASD
They are responsible for making sure that their members follow federal laws and rules
Which of the following is true of the duties of the Securities and Exchange Commission also known as the SEC
They are responsible for enforcing federal securities laws