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Life insurance > simulation > Flashcards

simulation Flashcards

1
Q

All of the following could own group life ins. EXCEPT

A

A group needing low-cost life insurance.

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2
Q

Which of the following best describes an insurance company that has been formed under the laws ot this state?

A

domestic

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3
Q

Which universal life option has a gradually increasing cash value and level death benefit?

A

Option A

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4
Q

Where would the underwriter find relevant infromation not presented by the applicant but communicated by the producer?

A

Application

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5
Q

in group life policies, individual certificates

A

each person

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6
Q

Which authority is not stated in an agent’s contract but is required for the agent to conduct business?

A

Implied

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7
Q

which of the following insurance options would be considered a risk-sharing arrangement?

A

reciprocal

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8
Q

what describes the specific information about a policy ?

A

policy summary

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9
Q

which of the following would not be considered deceptive act?

A

Comparing an insured’s current policy with a potential replacement policy

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10
Q

the full premium was submitted with the application for life ins. and policy issued two weeks later as requested. when does policy coverage become effective?

A

as of the application date

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11
Q

which of the following shows type insurance an insurer permitted to transact?

A

To create an estate

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12
Q

which of the following

policies classified as traditional level premium contract?

A

straight life

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13
Q

best reason to purchase life insurance than annuities?

A
  1. to liquidate a sum of money over a period of years
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14
Q

which issued by state dep. of insurance to show insurer has power to write insurance contracts in that state?

A

Certificate of Authority

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15
Q

the ownership provision entities the policy owner to do all of the following except?

A

set premium rates

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16
Q

an investor buys a life policy on an elderly person in order to sell it for a life settlement this is an examle of

A

a STOLI policy

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17
Q

a rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as consumer price index, is called

A

Cost of living rider.

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18
Q

what happens when a policy is surrendered for its cash value ?

A

Coverage ends and the policy cannot be reinstated.

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19
Q

what is the waiting period on a waiver of premium rider in life insurance policies?

A

6 months

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20
Q

according to the nonforfeiture law, the owner decides to surrender a deffered annuity prior to annuitization, the owner is entitled to which of the following ?

A

Guaranteed surrender value

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21
Q

all of the following are personal uses of life insurance except

A

Buy-sell agreement.

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22
Q

under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?

A

Installments for a fixed period

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23
Q

what license or licenses are required to sell variable annuities?

A

Both a life insurance license and a securities license

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24
Q

Part 2 of the application for the life insurance provides questions regarding all of the following except

A

Other insurance coverages.

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25
Q

the premium of a sruvivorship life policy compared with that of a joint life policy would be

A

Lower.

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26
Q

when a policyowner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called

A

Class designation.

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27
Q

in a group life insurance policy, the employer may select all of the following except

A

the beneficiary

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28
Q

under which nonforfeiture option does the company pay the surrender value and have no further obligations t the policy owner?

A

cash surrender

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29
Q

who is the owner and who is the beneficiary on a key person life insurance policy?

A

the employer is the owner and the beneficiary

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30
Q

which of the following is an example of a limited-pay life policy?

A

life paid-up at age 65

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31
Q

an insured owns a term policy with a guaranteed renewable option. when the end of the policy draws near, the insured answers medical questions in order to prove insurability and qualifies for a discounted premium rate. which option best describes this scenario?

A

Re-entry

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32
Q

if an insured changed his payment plan from monthly to annually, what happens to the total premium?

A

decreases

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33
Q

an insured has a life insurance policy with a face amunt of $500. He pays a premium each week to the agent who sold him the policy. What kind of policy does the insured have?

A

Industrial life

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34
Q

which of the following terms is used to name the nontaxed return of unsed premiums

A

Dividend

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35
Q

an insurer receives a report regarding a potential insured that includes the insured’s financial status, hobbies and habits. What type of a report is that?

A

Inspection Report

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36
Q

which of the following would describe a legal doc. which would dictate who can buy a deceased partner’s share of a bus. & for wat amount?

A

buy-sell agreement

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37
Q

a person doesn’t lock the door nor doesn’t repair leaks an indifferent attitude. type of hazard?

A

morale

38
Q

which of the following is true about credit life insurance?

A

creditor is the policyowner

39
Q

straight life policy has what type of premium?

A

A level annual premium for the life of the insured

40
Q

if the annuitant dies during the accumulation period, who will receive the annuity benefits?

A

The beneficiary

41
Q

the mode of premium payment

A

Is defined as the frequency and the amount of the premium payment.

42
Q

a universal life insurance policy is best described as a/an

A

Annually Renewable Term policy with a cash value account.

43
Q

what documentation grants express authority to an agent?

A

Agent’s contract with the principal

44
Q

all of the following are characteristics of a group life insurance plan except

A

There is a requirement to prove insurability on the part of the participants.

45
Q

an individual purchases a 100,000 joint life policy on himself and his wife. Eight years later, he died in an automobile accident. how much will his wife receive from the policy?

A

$100,000

46
Q

a business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. the business owner then decided to use her $250,000 life insurance policy to secure the loan. which provision makes this possible?

A

Collateral assignment

47
Q

the policyowner of an adjustable life policy wants to increase the death benefite. which of the following statements is correct regarding this change?

A

The death benefit can be increased by providing evidence of insurability.

48
Q

life insurance death proceeds are

A

generally not taxed as income

49
Q

which of the following is true regarding a waiver of a surrender charge on an anuuity contract?

A

The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days.

50
Q

a married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. which policy is that?

A

Joint Life Policy

51
Q

if a property or casualty producer has les than 2 years left on his or her existing license, what percentage of the surplus lines broker license fee will the producer be charged for the addition of that license?

A

50%

52
Q

the rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled called?

A

waiver of premium

53
Q

an insured purchased an insurance policy 5 years ago last year, she received a divided check from the insurance company that was not taxable. this year, she did not receive a check from the insurer. from what type of insurer purchase the policy?

A

mutual

54
Q

an insured pays $1,200 annually for her ife insurance premium. the insured applies this years $300 worth of accumulated dividends to the next year’s premium, thus reducing it to $900. What option does this describe?

A

reduction of premium

55
Q

Twin brothers are starting a new business, they know it will take several years to build the business to the point that they pay off the debt incurred in starting business. what typ of insurance would be the most affordable and still provide a death benefit should one of them die?

A

Joint Life

56
Q

an insurer wants to begin underwriting procedures for an applicant what source will it consult for the majority of its under writing information?

A

Application

57
Q

if a premium payment is mailed, how can an isurer establish the date of payment?

A

The postmark on the envelope

58
Q

an insured receives an annual life insurance dividend check. what term best describes this arrangement?

A

Cash option

59
Q

a rider attached to a life insurance policy that provides coverage on the insured’s family members is called the..

A

Other-insured rider.

60
Q

when an annuity is written, whose life expectancy is take into account?

A

Annuitant

61
Q

the automatice premium loan provision is activate at the end of the

A

grace period

62
Q

when J. applied for a life insurance policy, the agent infromed him that a medical exam would be required the exam may be completed by

A

A paramedic or examining physician at the insurer’s expense.

63
Q

what do individuals use to transfer their risk of loss to a larger group?

A

Insurance

64
Q

annuities can be used to fund which of the following

A

Retirement plans

65
Q

annuities can be used to fund which of the following

A

variable

66
Q

after a back injury, an insured is disabled for a year. his insurance policy carries a disability income benefit rider. which of the following benefits will he receive?

A

monthly premium waiver and monthly income

67
Q

under an extended term nonforfeiture option, the policy cash value is converted to

A

The same face amount as in the whole life policy.

68
Q

pertaining to insurance, what is the definition of a fiduciary responsibility?

A

promptly forwarding premiums to the insurance company

69
Q

an adjustable life policy owner can change which of the following policy features?

A

The coverage period

70
Q

which of the following ultimately determines the interest rates paid to the owner of a fixed annuity?

A

Insurer’s guaranteed minimum rate of interest

71
Q

if an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may

A

Require evidence of insurability.

72
Q

a producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. this is a personal use of life insurance known as

A

Survivor protection.

73
Q

an insured has a level term life insurance policy that is guaranteed renewable and also includes a re-entry provision. the re-entry provision would allow the insured to renew the policy and

A

Pay a lower renewal premium by proving insurability.

74
Q

which of the following best describes annually renewable term insurance?

A

it is level term insurance

75
Q

which of the following is not true regarding the accumulation period of annuity

A

it would not occur in a deferred annuity

76
Q

which of the following applies to the 10-day free-look privilege?

A

it permits the insured to return the policy for a full refund

77
Q

if a contract provides a set amount of income for 2 or more persons with the income stopping upon the first death of the insured, it is called

A

joint life

78
Q

which of the following types of policies allows for a flexible premium and a variable investment component?

A

Variable universal life insurance

79
Q

life ins. policies that have cash value must provide for a maximum policy loan interest rate of no more than

A

8% per annum.

80
Q

which of the following would not be accepted as a doc. showing that an applicant for a license is in the US legally?

A

A Social Security card

81
Q

partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. what type of insurance policy may be used to fund this agreement?

A

Any form of life insurance

82
Q

at age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy than can be modified to accomodate those changes as the occur. Which of the following policies would fit his needs?

A

Adjustable Life

83
Q

during the accumulation period in a nonqualified annuity, what are the tax consequences of a withdrawal?

A

taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 1/2

84
Q

which is true about a spouse term rider?

A

The rider is usually level term insurance.

85
Q

which statement is not true regarding a straight life polic

A

Its premium steadily decreases over time, in response to its growing cash value.

86
Q

an individual purchased a life ins. policy on his life naming his wife as primary bene. and their daughter as contingent bene. what circumstances could the daughter collect death benefit?

A

If the primary beneficiary predeceases the insured

87
Q

if someone wants to buy kife ins. that will provide lifetime protection against premature death, what type of life ins. plcy. should that person buy?

A

Permanent

88
Q

a policyowner has a 10,000 term life policy he paid his annual premium feb. 1 he fails to renew the policy and dies on feb 28 of the following year. accounting for the $200 of earned premium, how much will the bene. receive from the policyowner’s insurance company?

A

$$9,800

89
Q

which of the following applicant could the insurer charge a higher rate of premium and not violate regulations regarding unfair discrimination?

A

An applicant who is a smoker

90
Q

which of he following not true regaridng policy loans?

A

Money borrowed from the cash value is taxable.

91
Q

Stranger-originated life insurance policies are in direct opposition to the principle of

A

Insurable interest.

Life insurance (8 decks)

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