Life And Annuities Specific Flashcards
The policy owner wants to make sure that upon his death the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?
Interest only option
With this option. The insurance company retains the policy proceeds and pays the interest on the proceeds to the beneficiary at regular intervals
Equity indexes annuities
Seek higher returns
Equity indexes annuities are not securities, but they invest on a relatively aggressive basis to aim for higher returns.
According to the entire contract provision, what document must be part of the insurance policy?
Copy of the original application
Insurance contract must contain this
All of the following benefits are available under social security EXCEPT
Welfare benefits
Social security is an entitlement program not a welfare program
Which of the following policies would be classified as traditional level premium contract?
Straight life
Straight whole life policies have a level guaranteed face amount and a level premium for the life of the insured
What describes the specific information about a policy?
Policy summary
This describes the features and elements of the specific policy for which a person is applying
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
The policy can be effective as early as the date of the application if the premium is submitted with the application and the policy is issued as applied for
In which of the following examples would a contract between an insurer and prospective insured be legal?
The applicant has a prior felony conviction
It is legal for a person convicted of a felony to buy an insurance contract
Two attorneys at law and operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose
HR-10 (Keogh Plan)
These plans are specifically for self-employed and their employees
If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
Whether an insurance interest exists between the individuals
An insurance interest must exist at the time the policy is issued. Some relationships are automatically presumed to qualify as an insurance interest- spouses, parents, children, and certain business relationships
Under which fit he following circumstances would an insurer pay accelerated benefits?
An insured is diagnosed with cancer and needs help paying for their medical treatment
Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?
Third party ownership
Contracts owned by Someone other than the insured are known as theirs-party ownership.
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3days
Which rider, when attached to a permanent life insurance policy, provides an amount of Insurance on every family member?
Family term rider
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die
All of the following are true of key person insurance EXCEPT
The plan is funded by permanent insurance only
Key person coverage may be funded by any type of life insurance
Which for he following statements regarding the taxation of modified endowment contracts is FALSE?
Withdrawal are not taxable
Any distributions from MEC’s are taxable, including withdrawals and policy loans. All of the other statements are true.
All other factors being equal, the least expensive first year premium is found in
Annually renewable term
It’s the purest form of insurance, the premium increases as the age increases.
The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability
A man purchased a 90,000$ annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is that?
Immediate
Immediate annuity, distribution starts within 1 year of purchase
When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a return of all of the premiums paid. Which rider is attached to the policy?
Return of premium
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policy owner?
Cash surrender
Once the cash surrender value is paid, the contract is over
Which policy component decreases in decreasing term insurance?
Face amount
Decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term.
The ice insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
Incontestability clause
In an insurer wishes to contest any statements on an application, they must do so within the first two years.
An insured purchased a life insurance policy. The agent told him that depending upon the company’s investments and expense factors. The cash values could change from those shown in the policy at issue time. The policy is a/an
Interest-sensitive whole life
Because the cash values are generated by investments, interest rates will affect the amount of the cash value.
Which of the following determines, the cash value of a variable life policy?
The performance of the policy portfolio
The cash value of a variable life policy is not guaranteed and fluctuates with the performance of the portfolio in which the premiums have been invested by the insurer
If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?
The balance of the loan will be taken out of the death benefit
Which of the following statements is TRUE concerning irrevocable beneficiaries?
They can be changed only with the written consent of that beneficiary
Which of the following is an eligibility requirement for all social security disability income benefits?
Have attained fully insured status
