Life Insurance Certification Exam

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Life Insurance Certification Exam The income period when a surviving spouse doesnot qualify for social security survivor or retirement benefits is called A) the retirement period B.) the preretire... ment "blackout" period C.) the family dependency period D.) the "in-between period - ✔✔B Which of the following settlement options produces benefits that are tax exempt to the Life Insurance beneficiaries? A.) fixed- income benefits B.) Fixed period benefits C.) interest only payments D.) lump-sum payments - ✔✔ A nontaxable trans action where a cash value Life Insurance policy is converted into an annuity is known as A.) a modified endowment contract (MEC) B.) a rollover C.) a 1035 exchange D.) a pension enhancement - ✔✔C The tendency of poor risks to seek insurance and get coverage more often than average risks isnown as A.) discrimination B.) adhesion C.) adverse selection D.) Insurance - ✔✔C What is a Life Insurance policy dividend? A.) a refunds of a portion of the premium B) interest paid to the policy owner on the cash value accumulation of a permanent insurance policy c) that portion of the premium not used to pay death claims D) the stockholders return on an investment in the company - ✔✔B If desdemona is insured by a life policy with a face amount the insurer t of $250,000, but which has an outstanding loan of $ policy 10,000 at her death the insurer A) will subtract the amount of the outstanding loan and pay $ 240,000 to the beneficiary B) does not have to pay the death claim until the loanhas been repaid C) must pay the beneficiary and continue to collect the $$10,000 outstanding plan D) will pay the entire $250,000 to The beneficiaryand continue to collect interest on the loan until it is repaid - ✔✔A Which of the following best describes the annuitization period? A). The time which payments are made to the annuitant, B) the time during which premiums are paid to fund the annuity C) the principle factor is determining the annuity premium D) the process determining the annuity premium - ✔✔A The type of premium for-term life innsurance that remains the same throughout the policy period is A) the graded premium B) the renewable premium C) the modified premium D) the level premium - ✔✔D Fixed annuities are supported by an insurer's A) personal account B) investment account C) general account D) separate account - ✔✔A Samantha filled out an insurance application with her agent. The statements made on the application are A) representations B) affirmations C) declarations D) warranties - ✔✔A Collateral for a life policy loan is A) normally required for any loan over $500 B) the face value of the policy itself C) normally obtained by having the policyownerassign items of personal property to the company D) the cash value of the policy itself - ✔✔B what are the dividend options? - ✔✔Carpo : cash,accumulate at interest,reduce next premium amount,paid up options -attained age, paid up policy ,1 year term insurance -attained age. The premium for a renewable term life insurance policy A) decreases each time its renewed B) increases each time its renewed C) stays the same D) maybe skipped if the policy has sufficient cash value to meet the premium - ✔✔D A guaranteed insurability rider normally provides between that ages 25 and 40, additional Life be insurance may be purchased without proof of insurability. A) only once B) at 3-year intervals C) whenever the policy owner wishes D) every year - ✔✔B An insurer that distributes dividends to its policy owners is A) a mutual company B) a stock company C) an alien company D) a surplus lines company - ✔✔A The applicant for an insurance policy must sign or initial all of the following except A) a disclosure form B) the application C) the producers report D) changes to the application - ✔✔C insured does not see this What is the purpose of the fair credit reporting act? A) it prohibits insurers from denying applications based on poor credit B) it gives consumers the right t question reports about them by investigative agencies and get false informati, corrected C) it prohibits insurance companies from obtaining reports on applicants from outside investigative agencies D) it protects credit companies during the course of their investigation - ✔✔B A life ins, policy is a unilateral contract because A) only the insured is bound to live upto his side of the agreement B) neither party may default on the agreement C) only the insurer is bound to perform its obligations under the policy D) either party may default in the agreement - ✔✔C Which Life Insurance settlement option is considered the default option if noother option is elected? A) lump-sum cash B)paid up policy C) fixed amount D) extended term - ✔✔A In a contract of adhesion, the provisions of the insurance contract are prepared by the A) insurer B) the beneficiaries C) insured D) agent - ✔✔A Which of the following term insurance options has an increasing death benefit and a level premium throughout the life of the policy? A) increasing term B) level term C) decreasing term D) renewable term - ✔✔A or c All statements made by an applicant in an application. For life insurance are considered to be A) warranties B) affirmations C) representations D) declarations - ✔✔C. Most states require that life insurance policies contain a provision that all statements made in application be deemed representation not warranties. A representation is a statement made by the applicant that the applicant believes to be true. A warranty is a statement made by the applicant that is guaranteed to be true. If an insurance company rejects a claim on the basis of a representation, the company bears the burden of proving materiality. When a convertible termlife policy is converted to a permanent policy, the insured A) must prove insurability B) must use attained age only C) must use original age only D) does not have to prove insurability - ✔✔D A policy owner decides to pay life insurance premiums quarterly. instead of annually which of the following statements is correct? A) the total outlay of premium dollars will now be increased B) The total outlay of premium dollars will now be decreased each year because the policy owner is paying less at each quarterly payment C) the total outlay of annual premium dollars will now be decreased D) the total outlay of annual premium dollars will remain the same - ✔✔A When Imogene begins receiving payments from her annuity, annually she can expect those payments to be A) taxed according to the exclusion ratio B) entirely -tax free C) taxed on their entire amount D) entirely tax-free until her basis in the annuity is used up, after which the entire amount will be taxed - ✔✔A Damon purchased a 10-pay life policy at age 35. He can expect to be paid up by age A) 59.5 B) 100 C) 65 D) 45 - ✔✔D The two major phases of annuity are A) accumulation & actualization B) accumulation & annuitization C) fixed and variable D) general account & separate account - ✔✔B Jane, age 35, has just purchased a 20-pay whole life policy. When she turns 55, she will A. receive the policy's face value benefit B. have a fully matured policy C. cease paying premiums D. no longer be covered by the policy - ✔✔C. Limited pay whole life policies have level premiums that are limited to a certain period (less than life), after which no more premiums are owed. All of the following are dividend options except A) assigning dividends to pay off a mortgage B) buying paid-up additions C) leaving dividends to accumulate at interest D) applying dividends to premiums - ✔✔A Pauline decides to add a spendthrift clause to her life policy that has been in force for several years which of the following statements is correct? A) the spendthrift clause canonly be placed into effect by the beneficiary not the insured B) the spendthrift clause Can only be used with the lump sum method of payment C) the spend thrift clause cannot be added to a policy once it is in force D) Pauline must arrange for the policy proceeds to be paid in some wayother than lump sum. - ✔✔D With a modified premium whole life contract, premium payments - ✔✔are lower in the early years of the contract The employees of artifax corporation must each pay a portion of the premium for their group insurance this means they are members of A) a nonparticipating plan B) a contributory plan C) a participating plan D ) a noncontributory group plan - ✔✔B Term Life Insurance differs from permanent life insurance in that term A) builds no cash value, and pays a death benefit only B) insurance repays money to a living insured C) builds cash value bout pays no death benefit D) has a higher premium per/$1,000 of insurance - ✔✔D? Which of the following parts of the application includes medical information? A) agents Statement B) part 1 C) part 2 D) general information agents statement - ✔✔C Premiums for a variable universal life policy - ✔✔can vary in amount as well as payment schedule With respect to life policies all of the following are subject to federal income tax except A) annuity payments B) cash accumulations withdrawn by the policy owner C) interest paid on policy dividends D) policy proceeds paid in a lump sum - ✔✔B? Which of the following options is the settlement option of a life policy that provides periodic Payments of a specified amount as long as the proceeds plus interest last? A) Life income B) fixed amount C) fixed period D) interest - ✔✔C A person purchases a temporary annuity with a life with period certain of 10 years, but he dies well before the 10 year certain period has elapsed. In abiding with his annuity contract, the company would A) make the stipulated payments to the annuitants estate B) make the stipulated payments to the annuitants beneficiary for the rest of the certain period C) make a one lump sum payment to the beneficiary D ) keep all the funds associated with this annuity contract - ✔✔D [Show More]

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