General Powers And Duties

Question 1

What is the primary purpose of life insurance?

Answer 1

To provide financial protection to beneficiaries upon the death of the insured.

Question 2

True or False: Life insurance policies are only available for individuals over the age of 18.

Answer 2

False

Question 3

Fill in the blank: The individual whose life is insured is referred to as the __________.

Answer 3

insured

Question 4

What are the two main types of life insurance?

Answer 4

Term life insurance and whole life insurance.

Question 5

Which type of life insurance provides coverage for a specific period?

Answer 5

Term life insurance.

Question 6

What is a beneficiary in the context of life insurance?

Answer 6

A person or entity designated to receive the death benefit from a life insurance policy.

Question 7

True or False: Whole life insurance policies accumulate cash value over time.

Answer 7

True

Question 8

What is ‘underwriting’ in life insurance?

Answer 8

The process of evaluating the risk of insuring a person and determining the premium.

Question 9

Multiple Choice: Which of the following is NOT a factor in determining life insurance premiums? A) Age B) Health C) Marital Status D) Location

Answer 9

C) Marital Status

Question 10

What does ‘premium’ refer to in life insurance?

Answer 10

The amount paid periodically to keep the insurance policy active.

Question 11

Fill in the blank: A life insurance policy that pays out upon the death of the insured is called a __________ policy.

Answer 11

death benefit

Question 12

True or False: Life insurance proceeds are generally subject to income tax.

Answer 12

False

Question 13

What is the difference between ‘term’ and ‘permanent’ life insurance?

Answer 13

Term life insurance provides coverage for a set period, while permanent life insurance provides lifelong coverage.

Question 14

What is ‘cash value’ in a whole life insurance policy?

Answer 14

The savings component of a whole life policy that grows over time and can be borrowed against.

Question 15

Multiple Choice: Which type of life insurance typically has higher premiums? A) Term life B) Whole life

Answer 15

B) Whole life

Question 16

What is the ‘contestability period’ in life insurance?

Answer 16

A period during which an insurer can challenge a claim due to misrepresentation or fraud.

Question 17

Fill in the blank: Life insurance policies often include a __________ clause that allows the policyholder to cancel the policy within a specified time frame.

Answer 17

free look

Question 18

What is ‘riders’ in the context of life insurance?

Answer 18

Additional provisions that can be added to a life insurance policy to customize coverage.

Question 19

True or False: Life insurance policies can be transferred to another person.

Answer 19

True

Question 20

What is a ‘lapse’ in a life insurance policy?

Answer 20

The termination of a policy due to non-payment of premiums.

Question 21

Multiple Choice: Which of the following is a common rider? A) Accidental Death Benefit B) Automatic Premium Loan C) Both A and B

Answer 21

C) Both A and B

Question 22

What does ‘face amount’ refer to in a life insurance policy?

Answer 22

The amount of money the insurer pays to beneficiaries upon the insured’s death.

Question 23

Fill in the blank: A __________ is a legal document that outlines the terms of the life insurance policy.

Answer 23

policy contract

Question 24

What is ‘conversion privilege’ in term life insurance?

Answer 24

The option to convert a term policy to a permanent policy without medical underwriting.

Question 25

True or False: Life insurance is only necessary for individuals with dependents.

Answer 25

False

Question 26

What is the role of an insurance agent in life insurance?

Answer 26

To help clients select appropriate policies and assist with the application process.