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Life License-Test#1

Part 4

QuestionAnswer
91. Which of the following is correct regarding the transfer of risk? the transfer is from an individual to a group of other insureds
92. Which of following is false concerning risk? pure risks are uninsurable; ; pure risks are potentially insurable, risk is uncertainty of loss, speculative risks involve the possibility of gain and loss, speculative risks are uninsurable
93. which of the below describes the term "aleatoric" as it relates to insurance? performance/contract depends on an uncertain future event;
94. which of the following is not false? in a contributory plan, 75% of all eligible employees must enroll; false: in a contributory plan, 75% of all employees must enroll, also the group sponsor contributes 75% of the premium,in a noncontributory plan, all eligible employees must not be covered
95. not all of the following are false, except: stock insurers are not owned by stockholders; true: mutual insurers are owned by policyholders, stock insurers may declare dividends, mutual insurers may declare policy dividends
96. identification of clients is performed by the: Marketing Department; marketing identifies clients
97. which of the following is false? a broker is licensed to sell life, property and casualty insurance; true: an agent represents a principal, an agent can be independent or exclusive, a broker represents an insured
98. in order to be considered an ideally insurable risk the situation must NOT: potentially cause catastrophic economic harm; must: involve uncertainty of loss, potentially cause significant economic harm, be reasonably predictable
99. Which of the following is the definition of the Law of Large Numbers? the larger the number of individual, but similar, risks that are combined into a group, the easier it is to predict losses for that group over time
100. the period of time following the youngest child's 18th/19th birthday until the surviving parent is eligible for benefits is called the: blackout period; a survivor does not receive benefits during the blackout period
101. one of the principal benefits of insurance is: reduction of uncertainty
102. which of the following is true regarding mortality tables? mortality tables predict the number of people per 1,000 in a particular age group who will die in a given year
103. if an insured works at two different jobs, they will be rated according to the: job that has the worst safety record
104. which of the following is not an acceptable risk for the insurer? declined; the only unacceptable risk is one that the insurer declines
105. which of the following is the most correct regarding reinsurance? it is used to allow an insurance company to write insurance in excess of its retention limits; reinsurance is required for the insurer to write beyond its retention limit
106. which acronym relates to the calculation of life premiums? M.I.X. = Mortality, Interest and Expenses
107. in which type of permanent insurance does the insurance protection decrease over the lifetime of the policy? whole life; the death benefit is made up of increasing cash value and decreasing insurance protection
108. the factors that affect the amount of cash value in a Universal Life Policy are: premium, current interest rates, mortality cost and expenses
109. the following statements are all incorrect, except: the Family Protection policy will cover newborns w/out an increase in premium, newborns automatically covered
110. which is correct concerning Survivorship Life? ...Survivorship Life pays on death of the second insured and has a usual death benefit of $1 million or more none of the above/following = it pays death benefit upon first death rather than second, this type is frequently used in cases where there will be a large estate tax liability upon death of the first spouse, death benefit is usually $1 million or less....
111. the Waiver of Premium Rider will usually waive payments after: 6 months of disability; 6 months is the usual waiting period
112. which of the following is not one of the policy parts? consideration; "conditions" not "considerations"; policy parts are conditions, policy face, and insuring clause
113. policy conditions are: the duties and rights of all parties to the contract
114. which of the following is untrue about life insurance free looks? the free look is at least 30 days for persons aged 65 or older; true are: usual free look lasts 10 days, free look is at least 20 days for a replacing policy, and a person who returns policy during free look is not covered from beginning of contract;
115. which of following is true about nonforfeiture provisions? extended term is the default option
116. which of the following is/are false regarding settlement options? ..and beneficiary can only choose settlement option if not already chosen for them Life Income Only payments will end on the death of the insured and the beneficiary can choose a settlement option if policyholder has previously chosen one for them; Life Income only ends on death of beneficiary...
117. at what age can a widow begin to receive social security benefits and still qualify for full benefits upon retirement? 60; minimum age is 60
118. the period during which principal and interest accumulate in an annuity is called the all untrue = annuity period, benefit period, and actuarial period; principal and interest accumulate during the Accumulation Period
119. which of the following is true regarding the annuity free-look? ...invested in stock or bond portfolio, cancellation during the free-look period entitles owner to a full refund of the premium not true = in a variable annuity, insurer will invest the premium in fixed income or money market funds, if the policy is returned during cancellation period the full premium paid will not be refunded; if owner has directed that premium is immediately ...
120. which of the following is a false statement? mistake on choices on test;answer is Keogh Plans are designed for unincorporated businesses
Created by: jennyhqs2
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