Final Exam

Question 1

The _____ has the right to change a life insurance policy’s beneficiary.

Answer 1

Policyowner

Question 2

This type of policy may NOT have the Automatic Premium Loan provision attached to it.

Answer 2

Decreasing term

Question 3

This information is NOT required to be included in a Whole Life policy.

Answer 3

Policy’s guaranteed dividend table

Question 4

True or false: only the beneficiary may select settlement options

Answer 4

False: settlement options may be selected by the policyowner

Question 5

A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the

Answer 5

Policy Loan Provision

Question 6

The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured’s death is called

Answer 6

Insuring agreement

Question 7

A student pilot can pay regular premium costs for her life insurance policy with the addition of

Answer 7

Aviation exclusion

Question 8

What type of Term Life policy most likely contains a Renewability feature?

Answer 8

10 Year Convertible Term

Question 9

Allows the insured to exchange a term policy for a whole life plan without evidence of insurability

Answer 9

Conversion Provision

Question 10

What arrangement allows one to bypass insurable interest laws?

Answer 10

Investor-Originated Life Insurance

Question 11

Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of

Answer 11

$10,000

Question 12

What does a 401(k) plan generally provide its participants?

Answer 12

Salary-deferral contributions

Question 13

An insurer is NOT required to provide information on fraudulent claims if requested by

Answer 13

An insured

Question 14

The Consideration clause of an insurance contract includes

Answer 14

The schedule and amount of premium payments

Question 15

Accumulated interest earned on dividends from an insurance policy is

Answer 15

Taxed as ordinary income

Question 16

A promotional advertising item is not considered a rebate unless it has a value equal to or less than

Answer 16

$25

Question 17

A terminated employee with group term coverage may convert to

Answer 17

Individual whole life policy

Question 18

Characteristic of a Variable Life policy

Answer 18

Underlying equity investment

Question 19

A license may be denied, suspended, or revoked if the licensee

Answer 19

Is found guilty of misrepresentation in obtaining the license

Question 20

Variable Whole Life Insurance can be described as

Answer 20

Both an insurance and securities product

Question 21

A life insurance policy that has a level premium but allows the policyowner to choose from a selection of investment options

Answer 21

Variable Life

Question 22

Allows a policyowner to sell a life insurance policy for more than its cash value

Answer 22

Life settlement contract

Question 23

The _____ names the beneficiary in a Key Employee Life policy

Answer 23

Company

Question 24

Does not constitute policy delivery

Answer 24

Policy issued with a rating

Question 25

The interest rate on _____ may vary over time

Answer 25

Variable rate cash value loan

Question 26

Characteristic of Straight Life policy

Answer 26

Premiums are payable for as long as there is insurance coverage in force

Question 27

A temporary agent’s license issued by the Commissioner of Insurance is valid for up to _____ days

Answer 27

90