Questions and Answers
In order to reinstate a life insurance policy, the insured must do all of the following except?
Which of the following statements concerning the Medical Information Bureau is correct?
The Family Term Rider incorporates?
Spouse term and children's term.
If an annuity has accumulated a cash value of $70,000, how much will the beneficiary receive if the annuitant dies during the accumulation phase?
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All of the following information needs to be included on a life insurance application EXCEPT?
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The guaranteed insurability rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT?
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What status of coverage does an employee have under Social Security if they have 6 quarters of coverage during the previous 13 quarter period?
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Which is a permissible reason for an insurance company to contest payment of a claim based on statements in the application?
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An applicant for a disability insurance policy who is unaware of their heart condition and answers no to heart problem questions is considered to be?
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When term insurance is added to the main policy to enhance it, what is it called?
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What happens to the cash value in a new policy when a whole life policy is surrendered for a reduced paid-up policy?
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What settlement option did J choose if he receives fixed amount benefit payments from his late wife's insurance policy with remaining amounts going to the contingent beneficiary?
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An adjustable life policy can assume the form of?
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When an insurer mails an insurance policy to a new policyowner and relinquishes control, the policy is considered?
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Which of the following is NOT a standard exclusion in life insurance policies?
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What does it mean that insurance contracts are unilateral in nature?
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Who is the annuity owner?
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What type of insurance product is purchased if an insured's flexible premium is invested into a separate account?
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How long is a distribution from an employer-sponsored retirement plan or IRA eligible for a tax-free rollover if reinvested in an IRA?
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Level term insurance provides permanent protection.
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What rider is included when an insured is unable to pay due to an injury but the policy remains in force?
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What should an agent do if an applicant realizes they answered a question incorrectly on their life insurance application?
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If an insured dies and it is discovered that they misstate their age or gender, what will the life insurance company do?
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Dividends received on participating life insurance policies are?
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Which risk classification is representative of the majority of people in a certain age group and with similar lifestyles?
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Study Notes
Life Insurance and Policies
- To reinstate a life insurance policy, the insured does not have to pay next year's premium in advance.
- The Medical Information Bureau aids underwriters in risk evaluation and classification.
- Family Term Rider includes coverage for spouses and children.
- Annuity beneficiaries receive the total accumulated cash value if the annuitant dies during the accumulation phase.
- Life insurance applications are not required to include details about other health insurance policies in force.
Riders and Coverage
- The guaranteed insurability rider allows additional life insurance purchases without proof of insurability, excluding the purchase of a new home.
- An employee with 6 quarters of coverage is currently insured under Social Security.
- Insurance companies can contest claims if the application contains material misstatements.
- An applicant's unawareness of a heart condition is considered a representation, not a misrepresentation.
Insurance Policy Features
- Adding term insurance to a main policy is known as a Term Rider.
- A reduced paid-up whole life policy's cash value will continue to increase.
- Fixed amount benefit payments from a policy flow to the contingent beneficiary if the insured dies before full payment.
- Adjustable life policies can be structured as either term or permanent insurance.
Delivery and Exclusions
- An insurance policy is considered delivered once the insurer relinquishes control of the document.
- Disability is not a standard exclusion in life insurance policies.
- Insurance contracts are unilateral, indicating promises are made by only one party.
- Annuity owners are identified as individuals who purchase the annuity.
Investment and Rollover Rules
- Flexible premium investments in separate accounts indicate a Variable Universal Life insurance product.
- Tax-free rollovers from retirement plans or IRAs must be reinvested in an IRA within 60 days.
- Level term insurance provides temporary protection only.
Premium and Adjustments
- Waiver of premium rider keeps life insurance policies active if the insured is unable to pay due to injury or illness.
- Changes on insurance applications should be corrected by crossing out incorrect information, writing the correct answer, and getting initials from the applicant.
- If an insured misstates their age or gender, the life insurance company adjusts the death benefit proportionately to what the premium would have purchased at the correct age or gender.
Tax Implications and Risk Classifications
- Dividends from participating life insurance policies are not taxable as they represent a return on unused premiums.
- Standard Risk classification applies to the majority of individuals within a specific age group and similar lifestyle.
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Description
Test your knowledge on life insurance policies, medical information principles, and family term riders. This quiz covers essential concepts and practices that are crucial for understanding life insurance. Prepare to enhance your learning and exam readiness.
