Podcast
Questions and Answers
Which of these types of Term insurance may be renewable?
Which of these types of Term insurance may be renewable?
What is considered to be a characteristic of an immediate annuity?
What is considered to be a characteristic of an immediate annuity?
Benefit payments start within one payment period of purchase
The Consideration clause in a life insurance policy indicates that a policy owner's consideration consists of a completed application and what?
The Consideration clause in a life insurance policy indicates that a policy owner's consideration consists of a completed application and what?
The initial premium
Which of these life products is NOT considered interest-sensitive?
Which of these life products is NOT considered interest-sensitive?
Signup and view all the answers
Which of the following consists of an offer, acceptance, and consideration?
Which of the following consists of an offer, acceptance, and consideration?
Signup and view all the answers
What kind of rider did S include on the Whole Life policy?
What kind of rider did S include on the Whole Life policy?
Signup and view all the answers
Under a Renewable Term policy, how is the renewal premium calculated?
Under a Renewable Term policy, how is the renewal premium calculated?
Signup and view all the answers
What can be added to a Whole Life policy to provide additional coverage?
What can be added to a Whole Life policy to provide additional coverage?
Signup and view all the answers
Dividends paid from a life insurance policy are issued by whom?
Dividends paid from a life insurance policy are issued by whom?
Signup and view all the answers
What action requires a policy owner to provide proof of insurability in an Adjustable Life policy?
What action requires a policy owner to provide proof of insurability in an Adjustable Life policy?
Signup and view all the answers
Credit Life insurance is issued in an amount not to exceed what?
Credit Life insurance is issued in an amount not to exceed what?
Signup and view all the answers
When does the free-look provision begin?
When does the free-look provision begin?
Signup and view all the answers
A Universal Life policy is sometimes referred to as an unbundled Life Policy because it allows the owner to see what?
A Universal Life policy is sometimes referred to as an unbundled Life Policy because it allows the owner to see what?
Signup and view all the answers
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years?
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years?
Signup and view all the answers
When is it appropriate for a producer's spouse to be the primary beneficiary on an applicant's life insurance policy?
When is it appropriate for a producer's spouse to be the primary beneficiary on an applicant's life insurance policy?
Signup and view all the answers
Rollover contributions in an individual retirement account (IRA) are limited by dollar amount.
Rollover contributions in an individual retirement account (IRA) are limited by dollar amount.
Signup and view all the answers
The entire cash surrender value of a life insurance policy is taxable.
The entire cash surrender value of a life insurance policy is taxable.
Signup and view all the answers
What type of annuity guarantees income payments for the rest of T's life?
What type of annuity guarantees income payments for the rest of T's life?
Signup and view all the answers
At what point does an informal agreement become a binding contract?
At what point does an informal agreement become a binding contract?
Signup and view all the answers
Which type of term life policy most likely contains a Renewability feature?
Which type of term life policy most likely contains a Renewability feature?
Signup and view all the answers
When does a life insurance contract become effective if the initial premium is not collected?
When does a life insurance contract become effective if the initial premium is not collected?
Signup and view all the answers
Which Nonforfeiture option offers the highest death benefit?
Which Nonforfeiture option offers the highest death benefit?
Signup and view all the answers
What is TRUE if the owner of an IRA names their spouse as a beneficiary, but dies before any distributions are made?
What is TRUE if the owner of an IRA names their spouse as a beneficiary, but dies before any distributions are made?
Signup and view all the answers
What kind of life policy pays the face value upon the death of the insured or when the insured reaches age 100?
What kind of life policy pays the face value upon the death of the insured or when the insured reaches age 100?
Signup and view all the answers
Variable Life products require a producer to hold what licenses?
Variable Life products require a producer to hold what licenses?
Signup and view all the answers
What is the advantage of reinstating an original life policy?
What is the advantage of reinstating an original life policy?
Signup and view all the answers
Face amount can be adjusted using policy dividends in an Adjustable Life policy.
Face amount can be adjusted using policy dividends in an Adjustable Life policy.
Signup and view all the answers
Which type of plan allows an employer to give money to an employee for buying a life insurance policy?
Which type of plan allows an employer to give money to an employee for buying a life insurance policy?
Signup and view all the answers
A(n) _____ Life policy offers the owner investment in products such as money-market funds.
A(n) _____ Life policy offers the owner investment in products such as money-market funds.
Signup and view all the answers
What is Old Age and Survivors Health Insurance (OASDHI) also known as?
What is Old Age and Survivors Health Insurance (OASDHI) also known as?
Signup and view all the answers
If a producer completes an insurance application and collects the initial premium, what is true?
If a producer completes an insurance application and collects the initial premium, what is true?
Signup and view all the answers
What kind of life insurance product covers children under their parents' policy?
What kind of life insurance product covers children under their parents' policy?
Signup and view all the answers
How are surrender charges deducted in a life policy with a rear-end loaded provision?
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Signup and view all the answers
Which provision requires proof of insurability after a policy has lapsed?
Which provision requires proof of insurability after a policy has lapsed?
Signup and view all the answers
What kind of receipt did K receive from the agent?
What kind of receipt did K receive from the agent?
Signup and view all the answers
What type of life insurance are credit policies issued as?
What type of life insurance are credit policies issued as?
Signup and view all the answers
Which of these is NOT an element of life insurance premiums?
Which of these is NOT an element of life insurance premiums?
Signup and view all the answers
What determines the full amount of Social Security retirement benefits?
What determines the full amount of Social Security retirement benefits?
Signup and view all the answers
What is the result of T purchasing a Straight Life Annuity?
What is the result of T purchasing a Straight Life Annuity?
Signup and view all the answers
What does a Cost of Living rider provide to the insured?
What does a Cost of Living rider provide to the insured?
Signup and view all the answers
What kind of policy has a premium that stays fixed for the first 5 years and then increases?
What kind of policy has a premium that stays fixed for the first 5 years and then increases?
Signup and view all the answers
An agent who violates a cease and desist order may be fined up to what amount?
An agent who violates a cease and desist order may be fined up to what amount?
Signup and view all the answers
How are Roth IRA distributions normally taxed?
How are Roth IRA distributions normally taxed?
Signup and view all the answers
Which settlement option pays a stated amount to an annuitant but no residual value to a beneficiary?
Which settlement option pays a stated amount to an annuitant but no residual value to a beneficiary?
Signup and view all the answers
What type of life policy has a death benefit that adjusts periodically and is written for a specific period?
What type of life policy has a death benefit that adjusts periodically and is written for a specific period?
Signup and view all the answers
Who is not eligible to receive commissions from the sale of an insurance product?
Who is not eligible to receive commissions from the sale of an insurance product?
Signup and view all the answers
Which policy requires an agent to register with the National Association of Securities Dealers (NASD)?
Which policy requires an agent to register with the National Association of Securities Dealers (NASD)?
Signup and view all the answers
A life insurance policy is considered a wagering contract without insurable interest.
A life insurance policy is considered a wagering contract without insurable interest.
Signup and view all the answers
A Universal Life policy is sometimes called unbundled because it displays what components?
A Universal Life policy is sometimes called unbundled because it displays what components?
Signup and view all the answers
What happens if P's premiums are waived due to a disability?
What happens if P's premiums are waived due to a disability?
Signup and view all the answers
At what time must a policy owner have insurable interest on the insured?
At what time must a policy owner have insurable interest on the insured?
Signup and view all the answers
The payments on Q's annuity are no less than $250 quarterly. Which annuity does Q own?
The payments on Q's annuity are no less than $250 quarterly. Which annuity does Q own?
Signup and view all the answers
A policyholder is able to choose the frequency of premium payments through what feature?
A policyholder is able to choose the frequency of premium payments through what feature?
Signup and view all the answers
An employee with $25,000 group term life coverage may convert it to what upon termination?
An employee with $25,000 group term life coverage may convert it to what upon termination?
Signup and view all the answers
Who makes the legally enforceable promises in a unilateral contract?
Who makes the legally enforceable promises in a unilateral contract?
Signup and view all the answers
How are policyowner dividends treated regarding income tax?
How are policyowner dividends treated regarding income tax?
Signup and view all the answers
The agreement in a life insurance contract that states a specific sum will be paid upon death is called a(n):
The agreement in a life insurance contract that states a specific sum will be paid upon death is called a(n):
Signup and view all the answers
Group life insurance policies are generally written as what type?
Group life insurance policies are generally written as what type?
Signup and view all the answers
Statements made on an insurance application believed to be true are called:
Statements made on an insurance application believed to be true are called:
Signup and view all the answers
All of these are considered benefits under Social Security, EXCEPT for:
All of these are considered benefits under Social Security, EXCEPT for:
Signup and view all the answers
Paying insurance premiums on a more frequent basis will cause the policy to have what?
Paying insurance premiums on a more frequent basis will cause the policy to have what?
Signup and view all the answers
Study Notes
Life Insurance & Annuities
- Renewable Term insurance options can include Level Term policies.
- Immediate annuities start benefit payments within one payment period after purchase.
- The Consideration clause involves a completed application and the initial premium.
- Modified Whole Life is not classified as interest-sensitive.
- A contract consists of an offer, acceptance, and consideration.
- A Return of Premium rider pays beneficiaries more than the policy’s face value at the insured's death.
- Renewal of a Renewable Term policy is based on the insured's attained age.
- Whole Life policies can have additional coverage through a Decreasing Term rider.
- Dividends from life insurance policies are issued by the insurer.
- Policy owners need to provide proof of insurability when increasing an Adjustable Life policy's face amount.
Types of Insurance Products
- Credit Life insurance is limited to the amount of the associated loan.
- The free-look provision allows a policy review period that starts upon receipt of the policy.
- Universal Life policies allow visibility of interest earned, expense charges, and cost of insurance, hence termed "unbundled."
- Family Maintenance policies provide a monthly income for 30 years, followed by a lump sum benefit.
- Producers' spouses can be primary beneficiaries if insurable interest exists.
- IRA rollover contributions have no dollar limits.
Taxation & Benefits
- Incorrect assumptions include the taxation of the entire cash surrender value of life insurance.
- A Life Annuity with Period Certain guarantees income for the owner's lifetime and pays remaining amounts to beneficiaries if the owner dies prematurely.
- An informal agreement becomes binding when consideration is exchanged.
- 10 Year Convertible Term policies are the most likely to contain a renewability feature.
- Life insurance contracts become effective when the policy is delivered and the initial premium is collected.
Nonforfeiture Options & Retirement Accounts
- The Extended Term nonforfeiture option typically provides the highest death benefit.
- If the IRA owner dies before distributions are made, the surviving spouse can roll over the account into their own IRA.
- Whole Life insurance pays the face value upon the insured's death or upon reaching age 100.
- Variable Life products necessitate both a Life Insurance license and a Securities license.
Policy Features & Conditions
- The reinstatement of a life policy allows premiums to be calculated based on the insured's younger age.
- A face amount adjustment typically does not occur through policy dividends in Adjustable Life policies.
- Split-dollar plans enable employer contributions for employee life insurance policies with beneficiary selection.
- Variable Life policies allow investments in diverse financial products including equities.
- Social Security is commonly known as Old Age and Survivors Health Insurance (OASDHI).
Miscellaneous Insurance Knowledge
- Coverage depends on the insurer's underwriting policies after the application is complete and the premium is paid.
- Term riders can cover children under a parent's life policy.
- Rear-end loaded life policies deduct surrender charges at discontinuation.
- Reinstatement requires proof of insurability if a policy has lapsed.
- Conditional receipts indicate immediate coverage commencement upon application approval.
- Credit life insurance is generally issued as term policies.
- Life insurance premiums consist of mortality and expense costs, excluding morbidity rates.
- The Primary Insurance Amount (PIA) determines Social Security retirement benefits.
- Straight Life Annuities provide lifelong income that cannot be outlived.
Additional Considerations
- Cost of Living riders increase death benefits overtime.
- Modified Whole Life policies start with fixed premiums for five years before increasing.
- Violations of cease and desist orders can lead to fines up to $500.
- Roth IRA distributions are typically tax-free.
- The Life Income settlement option pays an annuitant a fixed amount with no residual for beneficiaries.
- Decreasing term policies have adjusted death benefits based on specified periods.
- Corporate executives are not eligible for commissions from insurance sales.
- Selling Variable Life requires registration with National Association of Securities Dealers (NASD).
- Wagering contracts in life insurance lack validity without insurable interest.
- Policy dividends are subject to taxation on accumulated interest.
- An insuring agreement promises a specified payment to a beneficiary upon the insured's death.
- Group life insurance policies are mostly structured as annually renewable term policies.
- Representations on applications are deemed true to the applicant's best knowledge.
- Benefits under Social Security exclude unemployment assistance.
- Paying premiums more frequently increases overall costs.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on key concepts in life insurance. This quiz covers topics like renewable term insurance, immediate annuities, and important clauses in policies. Perfect for those studying for exams in life insurance and financial planning.
