Exam Premiums, proceed and beneficiaries

Question 1

Proceeds from a life insurance policy are protected from the beneficiary creditors by which clause?

Answer 1

Spendthrift trust cause

Question 2

Name a contingent beneficiary as all surviving children is described by which term?

Answer 2

Class designation

Question 3

How does life insurance create an immediate estate

Answer 3

After the first premium is paid the face amount may be available to the beneficiary

Question 4

A policy owner can receive an immediate payment before the insured dies by using

Answer 4

Viatical settlement contract

Question 5

Which of the following is not an insurer policy expense

Answer 5

Premium

Question 6

What happens to the total amount of premiums paid for an insurance policy when the payment frequency increases?

Answer 6

Increases

Question 7

Which of the following is not a life insurance settlement option

Answer 7

Extended term option

Question 8

How is the cost of the policy affected when a policy owner pays premiums more frequently

Answer 8

Increases

Question 9

The premium payment mode that result in the highest overall cost would be

Answer 9

Monthly

Question 10

Which of these affected by the frequency of insurance policy premium payments?

Answer 10

Cost

Question 11

Sharon is a policy owner of a $50,000 life insurance policy. Our son Mike, is a beneficiary. If Sharon must obtain Mike signature in order to change the beneficiary, what kind of beneficiary designation is this?

Answer 11

Irrevocable

Question 12

What would be an expense factor in insurance program?

Answer 12

Mortality costs

Question 13

Which of these premium payments frequencies is not typically available to a policy owners

Answer 13

Bi-weekly

Question 14

A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the

Answer 14

Name living primary beneficiary

Question 15

Which of the following describes a number of deaths in a year compared to the number of people in a select group

Answer 15

Mortality rate

Question 16

A beneficiary changes can occur

Answer 16

Normally at any time doing the policy term

Question 17

Which type of beneficiary should be named if the insured wants to give explicit directions on how the policy proceeds should be paid?

Answer 17

Individual

Question 18

Insurance premiums is determined by each of the following factors except

Answer 18

Liquidity 

Question 19

A tax free section 1035 exchange of insurance policy to a different policy is permitted if it occurs

Answer 19

From insurer to ensure earth and no cash is received by the policy owner

Question 20

An example of naming a beneficiary by class would be

Answer 20

To the children born of my union with Ned Jackson

Question 21

What does a life insurance policy guarantees to the state of beneficiary upon the death of the insured

Answer 21

Specific amount of money

Question 22

Which of these is considered a major tax advantage of life insurance

Answer 22

Income tax is typically not owed on processed pay directly to a beneficiary

Question 23

A policyowner is prohibited from making any changes to the policy
without the beneficiary’s written consent under which beneficiary
designation?

Answer 23

Irrevocable beneficiary

Question 24

Over the course of a year, which premium payment mode is most
expensive?

Answer 24

Monthly

Question 25

When calculating life insurance premium rates, which component is affected by an insured's age and gender?

Answer 25

Mortality 

Question 26

Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary?

Answer 26

Interest only

Question 27

Which of these is the automatic mode of settlement for life insurance policy proceeds?

Answer 27

Lump sum

Question 28

A creditor would be allowed rights to life insurance policy proceeds if which of the following beneficiaries is chosen?

Answer 28

The insured estate

Question 29

What is created after policy proceeds are obtained in a lump sum and then immediately invested?

Answer 29

Estate

Question 30

Which of the following is NOT a component of determining policy premiums?

Answer 30

Dividends

Question 31

Pat is insured with a life insurance policy and Karen is his primary beneficiary. They are both involved in an automobile accident where Pat dies instantly and Karen dies 5 days later. Which policy provision will protect the rights of the contingent beneficiary to receive the policy benefits?

Answer 31

Common disaster clause

Question 32

Which of these ensures that proceeds of a life insurance policy will be free from attachment or seizure by the beneficiary's creditors?

Answer 32

Spendthrift clause

Question 33

Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called

Answer 33

Estate conservation

Question 34

A spendthrift clause in a life insurance policy

Answer 34

Restricted ability of the beneficiary to assign benefits

Question 35

A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax lability owed?

Answer 35

No federal income taxes owed on life insurance proceeds

Question 36

The probability of death, listed by year, is demonstrated in

Answer 36

Mortality tables

Question 37

Which of these factors help determine an insured's life insurance premium?

Answer 37

Avocation (hobby)

Question 38

Level premium term life insurance policies

Answer 38

Have premiums that are average over the policy period

Question 39

Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?

Answer 39

Section 1035 exchange

Question 40

Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary?

Answer 40

Interest only

Question 41

Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in nayments of $10,000 per month until the principal and interest has been paid out. Which option was chosen?

Answer 41

Fixed amount

Question 42

When calculating life insurance premium rates, which component would an agent's commission fall under?

Answer 42

Insurer expenses

Question 43

A policyowner can receive a percentage payment of the death benefits prior to death by using what kind of contract?

Answer 43

Viatical settlement agreement

Question 44

Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident?

Answer 44

Contingency beneficiary

Question 45

Mortality is calculated by using a large risk pool of

Answer 45

People and time

Question 46

All of these are settlement options for life insurance policies except

Answer 46

Extended term

Question 47

How are death benefits that are received by a beneficiary normally treated for tax purposes?

Answer 47

Exempt from federal income taxes

Question 48

What is the primary feature of a viatical settlement 

Answer 48

Reduce death benefit pre-payment

Question 49

Pam is the primary beneficiary of a life insurance policy and wants to let the death benefit accumulate and receive only the monthly investment proceeds. Which settlement option should she choose?

Answer 49

Interest option

Question 50

A beneficiary receives only the death benefit earnings in which settlement option?

Answer 50

Interest option

Question 51

Tonya has replaced her whole life policy with an annuity without incurring a tax penalty. This transaction is called a(n)

Answer 51

1035 exchange

Question 52

If the beneficiary dies from the same accident as the insured individual, the insurer will proceed as if

Answer 52

The insured outlived The beneficiary

Question 53

Premiums are best described as

Answer 53

 The amount and insurance per pays unit of coverage