Life 8 Flashcards
Which of the following is the required number of
participants in a contributory group plan?
a) 50%
b) 75%
c) 100%
d) 25%
Under a contributory group plan, an insurer will require
that 75% of eligible employees be included in the plan.
All of the following statements are true regarding tax-
qualified annuities EXCEPT
a) Withdrawals are taxed.
b) Employer contributions are not tax deductible.
c) Annuity earnings are tax deferred.
d) They must be approved by the IRS.
Employer contributions are not tax deductible.
Tax-qualified annuities must be approved by the IRS and
allow for tax deductible employer contributions. All
withdrawals are taxed and earnings grow tax deferred.
Which of the following is another term for an authorized insurer? a) Legal b) Admitted c) Certified d) Licensed
Admitted
Which of the following statements is TRUE about a
policy assignment?
a) It is the same as a beneficiary designation.
b) It permits the beneficiary to designate the person to
receive the benefits.
c) It authorizes an agent to modify the policy.
d) It transfers rights of ownership from the owner to
another person.
d) It transfers rights of ownership from the owner to
another person.
13.
An insured had a $10,000 term life policy. The annual
premium of $200 was due on February 1; however, the
insured failed to pay the premium. He died on February
28. How much would the beneficiary receive from the
policy?
a) $0
b) $200
c) $9,800
d) $10.000
9800
In this scenario, the death occurred within the
mandatory 30-day grace period. Past due premium
would be subtracted from the face amount of the policy.
When a life insurance policy was issued, the
policyowner designated a primary and a contingent
beneficiary. Several years later, both the insured and the
primary beneficiary died in the same car accident, and it
was impossible to determine who died first. Which of
the following would receive the death benefit?
a) The insurance company
b) The insured’s estate
c) The primary beneficiary’s estate
d) The insured’s contingent beneficiary
The insured’s contingent beneficiary
The dividend option in which the policyowner uses
dividends to purchase a term policy for one year is
referred to as the
a) One-year term option.
b) Paid-up option.
c) Accelerated endowment.
d) Paid-up additions.
One-year term option.
The validity of coverage under a life insurance policy
may not be contested, except for nonpayment of
premium, after the policy has been in force for at least
how many years?
a) 1 vear
b) 2 years
c) 5 years
d) 7 years
2 years
The incontestability clause prevents an insurer from
denying a claim due to statements in the application
after the policy has been in force for 2 years, even if
there has been a material misstatement of facts or
concealment of a material fact.
In a survivorship life policy, when does the insurer pay
the death benefit?
a) Half at the first death, and half at the second death
b) If the insured survives to age 100
c) Upon the last death
d) Upon the first death
Upon the last death
Survivorship life pays on the last death rather than upon
the first death.
When the insured selects the extended term
nonforfeiture option, the cash value will be used to
purchase term insurance with what face amount?
a)
The same as the original policy minus the cash value
b) Equal to the original policy for as long as the cash values
will purchase.
c) In lesser amounts for the remaining policy term
of age 100.
d) Equal to the cash value surrendered from the policy
Equal to the original policy for as long as the cash values
will purchase.
Which option is being utilized when the insurer
accumulates dividends at interest and then uses the
accumulated dividends, plus interest, and the policy
cash value to pay the policy up early?
a) Paid-up additions
b) Dividend Accumulation option
c) Paid-up option
d)
Accumulation at Interest
Paid up option
All of the following entities regulate variable life policies EXCEPT a) The Guaranty Association. b) Federal government. c) The SEC. d) The Insurance Department.
The Guaranty Association.
What is the purpose of a suicide provision within a life
insurance policy?
a)
To protect the policyowner
b)
To protect the insurer from persons who purchase life
insurance with the intention of committing suicide
c) To limit the insurer’s liability after the 2 year
waiting period
d) To deter the policyowner from committing suicide
To protect the insurer from persons who purchase life
insurance with the intention of committing suicide
Which of the following is NOT one of the three types of
term coverage based on what happens to the face
amount during the policy term?
a) Decreasing
b) Level
c) Increasing
d) Renewable
Renewable
Under the Fair Credit Reporting Act, individuals rejected
for insurance due to information contained in a
consumer report
a) Must be informed of the source of the report.
b) Are entitled to obtain a copy of the report from the
party who ordered it.
C)
Must be advised that a copy of the report is
available to anyone who requests it.
d) May sue the reporting agency in order to get inaccurate
data corrected.
Must be informed of the source of the report.
