Life Only

Question 1

When must insurable interest exist for a life insurance policy to be valid?

Answer 1

At the time the contract was made.

Question 2

For an applicant to qualify to transact business and maintain a license as a Life & Settlement Provider, the applicant must file with the State Treasurer a surety bond, or deposit cash or securities, in the sum of:

Answer 2

$100,000.

Question 3

If the advertising of a Life Settlement Contract mentions the dollar amounts available to policyholders, the advertising must disclose the average purchase price with regard to a particular life expectancy as a percent of face value paid to policyholders during the past how many months?

Answer 3

6 months.

Question 4

When must an insurer provide to each prospective buyer of life insurance a Buyer’s Guide and a Policy Summary?

Answer 4

Prior to accepting the applicant’s initial premium or premium deposit.

Question 5

A copy of the basic illustration and any revised basic illustration, along with any certification must be retained by the insurer until how long after the policy is no longer in force?

Answer 5

3 years.

Question 6

What 3 things are considered a replacement transaction?

Answer 6

1. A transaction in which new life insurance or annuity is to be purchased, and it is known, or should be know to the agent, that the existing contract(s) will be assigned as collateral for a loan or subjected to substantial borrowing of loan values in single or multiple transactions.
2. A transaction in which new life insurance or an annuity is to be purchased, and it is known, or should be known to the agent, that the existing contract(s) will be converted to effect a reduction in the amount of existing insurance, or term of which the coverage could remain in force.
3. A transaction in which new life insurance or an annuity is to be purchased, and it is known, or should be known to the agent, that the existing contract(s) will be lapsed, forfeited, surrendered or terminated.

Question 7

In terms of selection criteria and unfair discrimination what are the 3 things defined as a “physical disability”?

Answer 7

1. Blindness or deafness, either partial or full.
2. Hearing or speaking impairment.
3. Loss or partial loss of function of one or more of the upper or lower extremities.

Question 8

What will the premiums the insured pays be based upon when they convert from a group life insurance plan to an ordinary individual life insurance policy?

Answer 8

The form and amount of coverage at their attained age.

Question 9

When does the accelerated benefit provision become effective for accidents?

Answer 9

On the effective date of the policy or rider.

Question 10

Insurable interest:

Answer 10

A lawful economic interest in having the insured‘s life continue, differing from an interest which only arises by the insured‘s death. A person related by blood or law also has an insurable interest engendered by love and affection.

Question 11

Life insurance policies may be effected although the person paying the consideration has no insurable interest in the life of the person insured if:

Answer 11

A charitable, benevolent, educational or religious institution is designated irrevocably as the beneficiary.

Question 12

The life settlement provider or broker may NOT make contact with the policyholder:

Answer 12

More frequently than once every 3 months if the policyholder has a life expectancy of more than one year.

More frequency than once a month if the policyholder has a life expectancy of one year or less.

Question 13

Illustration requirements apply to all group and individual life insurance policies and certificates, except:

Answer 13

Variable life insurance
Individual and group annuity contracts

Credit life insurance

Life insurance policies under $10,000 illustrated death benefits on any individual