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Life and Disability
The other half of this test
| Question | Answer |
|---|---|
| If the purchaser of a variable immediate annuity is guaranteed to receive payments for a minimum of 240 months (20 years), the annuity is a ________. | variable life with period certain annuity |
| Melody is receiving a fixed life annuity. She can be certain that: | She will receive payments until her death because it is a life annuity (pure option). There is no beneficiary. |
| Which one of the following payout options might continue to pay benefits to a beneficiary? a/Fixed amount or period certain b/Joint c/Life with no refund d/Pure/straight | a/ Fixed amount or period certain- Under the fixed or period certain options, in the event the annuitant dies before the funds or fixed time in the annuity (or settlement) have been used up, the remainder is paid to the beneficiary. |
| When a life insurance company wishes to segregate certain assets held to fund variable contracts, it will use a ___________. | A separate account is the account in which a life insurance company places funds. These are funds from a variable contract, and performs the same function as a Mutual Fund. |
| The following are privileges allowed by law under terms of a life insurance contract after cash values have been created. It includes cash, reduced paid-up and extended term options. These are examples of _____. | Nonforfeiture Options- |
| _____ deals with receiving money from the insurance company other than in a lump sum | Settlement Options |
| _____ deals with the options of how a policyowner can receive a dividend. | Dividend Provisions |
| _____ provision allows the policyowner to change policy types, (ex. a Whole Life to a Universal Life, or a Universal Life to a Variable Life policy). | The Change of Contract |
| Death proceeds are paid to the beneficiary if the insured dies in the grace period, but the insurance company subtracts out the past due premium (no interest). | All premiums paid (no interest) must be refunded to the beneficiary if the insured commits suicide within the first two years of the contract. |
| George Washington requested a cash withdrawal from his Universal Life policy on April 1st.The insurance company must send the money no later than October 1st, under the delay clause. | Under the delay clause, the insurance company has the right to defer paying loans, withdrawals and cash surrenders to the policyowner for up to six months. |
| Once a policy has lapsed, the insured usually can reinstate the policy, provided proof of insurability is shown, all back premiums due | Plus interest have been repaid and less than three years have elapsed |
| no longer wants to pay premiums because his two children are going to college and he could use the premiums to help pay tuition. When a reduced paid-up non-forfeiture option is selected, ______. | the amount of protection will not vary during the life of the new policy (option amount).The Face Value is fixed. There are no more premiums due (a.k.a. Paid-Up), attained age is used to calculate the single premium and net premium is used |
| regarding the accumulation of Interest option when a dividend is received | The interest earned on the dividend is taxable.stays with the insurance company and earns competitive interest rates. The money is not put into the cash value account so it can be withdrawn at anytime without affecting the cash values |
| If Fitz were to die while in the grace period and with a $10,000 loan owed, how much of a death benefit will the beneficiary receive of a $100,000 face value policy? | $100,000, minus the outstanding loan and the one months premium. |
| What term defines and describes the scope of the coverage provided and limits of indemnification (a.k.a. The Heart of the Contract) | Insuring Agreement(Clause)usually on the first page of the policy, is the promise to pay from the insurance company |
| The _____ is a provision in a life insurance policy authorizing the insurer to pay, by means of a policy loan, any premium not paid by the end of the grace period. | automatic premium loan-The delay clause allows the insurer to delay (for up to six months) giving the policyowner loans, cash surrenders or withdrawals. |
| The policyholder wants to change his beneficiary. The insurance producer explains that: | A written notice to the insurance company is required, as well as written approval, known as an endorsement, from the insurance company.An irrevocable beneficiary may be changed with the signatures of the beneficiary and owner |
| Desmond is deciding on which type of policy he should purchase. If you, the producer, recommend a policy with a Mutual Insurance Company, the dividend projections | must contain a clear statement that payment of future dividends is not guaranteed. |
| A "last will and testament" does not supersede an insurance contract | T |
| The difference between an annual renewable and convertible term and the dividend one year term, also know as the fifth option, provision is: | the fifth option does not renew or convert, the annual renewable term does. |
| The advance purchase date of a guaranteed insurability rider provides that the policy owner may purchase insurance on the | Life of the insured in advance of the next option date, due to the birth of a child.The GIR allows the purchase of additional insurance on the insured not the children or dependents. |
| If Kate has a policy that lapses, she can put the policy back inforce under the reinstatement provision. Which of the following is correct about the reinstatement provision? | It requires the policyowner to pay, with interest, all past premiums. |
| A ____ Period is the time after the due date of a premium during which the policy remains in force without penalty, and any claims minus premium will be paid. | Grace- Lapse means the policy is not in force. Reinstatement means to put a lapsed policy back in force. A waiting period is a period of time where no coverage is available. |
| policy assignment (or assignment provision)- A beneficiary has no rights in policy assignment | It is valid during the insured's lifetime, therefore, can be called a living benefit.Transfers are not allowed without the written consent of the irrevocable beneficiary. |
| Intentional acts such as suicide are excluded (never covered)in this policy | AD & D policy |
| The Incontestability Clause states that | After a policy has been in force for over two years, the insurer cannot contest or void the policy. |
| If there is a misrepresentation or concealment discovered in the first two years, it must be material for the insurance company to deny coverage or to cancel the policy. | T |
| With the _______ rider, all or part of the face amount of the policy may be paid in advance on the diagnosis of certain dread diseases or in the event of circumstances significantly affecting the longevity and quality of life of the insured. | Accelerated Death Benefit |
| The Payor Waiver is a rider on a juvenile policy which will waive the premiums if the ___________. | payor becomes disabled or dies. |
| After two years, had a baby. The policy has a guaranteed insurability rider on it and he can purchase more insurance | On his own life at certain specified ages without proof of insurability/ the GIR gives the option to the insured, and no one else, and because NO insurability is required with this option. |
| completing an application for medical insurance, a producer should | Witness the signature of the applicant. |
| The policy provision that prevents an insurance company from altering its agreement with a policy owner by referring to documents NOT contained in the policy is called the _____ | Entire Contract |
| A preferred risk gives the insured a discount, which does not apply to a standard risk. | A standard risk is issued at the normal rate of premium. |
| conditional receipt is | It is sometimes called an interim insuring agreement. |
| Insuring Clause (agreement) represents the promise to pay by the insurance company under the conditions stipulated in the policy. | This clause performs the following functions: describes the general scope and limits of coverage, provides any definitions required, and sets forth the conditions under which benefits will be paid. |
| With an optionally renewable policy, the company reserves the right to terminate coverage at any policy anniversary date or premium due date but not between such dates, at their option | T |
| The ______ _______ is loss that would be sustained upon the death or disability of another, or loss of property sufficient to warrant compensation, and must be present at the time of application (a.k.a. inception of policy). | Insurable Interest |
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