Practice Exam 2 Flashcards
What is not a required element of an insurance contract?
Counter offer
An annuity owner is funding an annuity that will supplement her retirement because she does not know what effect inflation may have on her retirement dollars she would like a return that will equal the performance of the Standard & Poor’s 500 index she would likely purchase…
Equity indexed annuity
An individual’s tendency to be dishonest, would be indicative of a
Moral hazard
Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?
Indemnity
Concerning juvenile life insurance, what is an incorrect statement?
Juvenile life is classified as any life insurance purchased by a minor
The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the…
Spendthrift clause;
The spendthrift clause protects the policy, proceeds from creditors of the policy, owner or beneficiary
Which of the following types of annuities will generally provide the highest monthly income
Straight life
What statement is true about a policy assignment?
It transfers, rights of ownership from the owner to another person
Concerning dividends, what is true?
Dividend amounts are guaranteed in the policy;
Dividends cannot be guaranteed
What what is an example of a limited pay life policy?
Life paid up at 65;
Limited pay whole life premiums are all paid by the time the insured reaches age 65 the policy and when the insured turns 100 it is the premium pain. That is limited, not the maturity.
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called…
Executive bonus
An individual was involved in a head-on collision while driving home one day his injuries were not serious and he recovered however, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again which method of risk management does this describe?
Avoidance;
Avoidance is a method of risk management by which person tries to eliminate the risk of loss by avoiding any exposure to an event that could give rise to such loss risk avoidance is effective, but seldom practice
A 403B plan commonly referred to as a TSA is available to be used by
Teachers and not for profit organizations
Concealment as defined by the California insurance code is
Neglect on the part of insured to communicate all information known to me material to the insurer
What type of life insurance policy generates immediate cash value?
Single premium
