Insurance Flashcards
Dividends from a MEC are taxable when…
When they are received in cash
When they are used to reduce premium
When they are used to pay off a policy loan
RJ no longer wishes to pay premiums on his whole life insurance policy. Besides cashing in the policy, in what other non-forfeiture option is available?
A. 1035 Exchange
B. Let dividends pay premioum
C. Let dividend buy paid-up additions
D. Extended Term option
E. One-Year Term Rider Option
D. Extended Term option
D is the only non-forfeiture option shown in the answers
Which of the following is a dividend option that is generally available through a participating life policy?
A. Extended Term
B. Fixed Period
C. One-Year Term
D. Reduced Paid-Up Insurance
C. One-Year Term
Lilly is comparing the policy provisions, features, and options of two whole life contacts. What feature below should be least important to her?
The insurance company rating is not a provision, feature, or option of a life insurance policy
Which of the following is not a correct statement concerning Universal Life?
UL provides a guaranteed minimum interest rate buy not a guaranteed cash value
Which non-forfeiture option could impose a delay clause?
A. APL
B. Grace Period
C. Paid-Up
D. Extended Term
E. Cash Surrender Value
E. Cash Surrender Value
CSV may apply a 6-month Delay Clause
When Andy purchased a whole life insurance contract, he wanted the death benefit to increase each year. Which dividend option did he select?
A. Paid-Up Insurance
B. Extended Term
C. One-Year Term
D. Pure Life
E. Accumulate with Interest
C. One-Year Term
An alligator escapes his cage. What is the responsibility of the alligator owner?
Absolute Liability
Keeping a wild animal exposes their owners to absolute liability
Which of the following are among the most important criteria for selecting an insurer?
i. Carrier represented by broker vs. agent
ii. Policy types offered
iii. AM Best Rating
iv. History of the company
Answers i and iv are not factors in deciding whether or not to select an insurer
Which of the following is not a situation involving neglegence?
Babysitting by itself is not a negligent situation
Alex, a CFP, is on vacation. His paraplanner, sue, gives advice to one of Alex’s clients. Sue’s recommendation causes the client to lose money. Can Alex be responsible?
Yes, under respondent Superior.
This is vicarious liability.
Which of the following is true about participating policies written by a participating insurance company?
They overcharge premiums
