Questions and Answers
P wants to name her husband as the beneficiary of her life policy. However, she wishes to retain all of the rights of ownership. P should have her husband named as the:
A contract that has as its basic function the systematic liquidation of accumulated assets through periodic payments is called an:
An insurance producer takes an application for a life insurance policy but does not collect the initial premium. On delivery of the policy to the proposed insured, the producer must collect the initial premium and which of the following?
An employer can deduct premium payments as an ordinary business expense for which of the following life coverages?
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A producer takes applications from identical twins who want to buy the same type of policy in the same amount. The insurer issues the policies as applied for but charges a 25 percent higher premium for one of the policies. The difference in premiums is probably due to which of the following factors?
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In the event of an insured's death, which of the following provides an income for the family during a designated period of time followed by a lump sum death benefit?
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Which of the following statements is CORRECT about Group Life conversion privileges?
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Which of the following policies is an interest-sensitive form of permanent protection?
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Reinstatement of a life insurance policy requires an insured to take all of the following actions EXCEPT:
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Which of the following statements about a Renewable Term policy is CORRECT?
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If an insured commits suicide after the suicide clause in the insured's life insurance policy has expired, the insurer will take which of the following actions?
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Which of the following policy provisions provides for continuation of coverage despite nonpayment of premiums?
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An applicant for life insurance may question the validity and source of any consumer information developed under the
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The PRIMARY reason for selecting a Variable Whole Life policy instead of a traditional Whole Life policy is that the Variable Whole Life policy:
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Study Notes
Beneficiaries and Rights
- A revocable beneficiary allows the policy owner to retain all rights of ownership while changing the beneficiary at any time.
- An irrevocable beneficiary cannot be changed without the beneficiary’s consent, restricting the policy owner's rights.
Types of Insurance Contracts
- An annuity is designed for systematic liquidation of accumulated assets through periodic payments, unlike other contracts that may involve indemnity or investment.
Initial Premiums and Policy Delivery
- Upon delivering the life insurance policy, the insurance producer must collect the initial premium and the insured's signed statement of continued good health.
Deductibility of Premium Payments
- Employers can deduct premium payments for group life insurance as an ordinary business expense, beneficial for employee benefits.
Risk Classification and Premiums
- The difference in premiums charged for identical policies can be attributed to risk classification, which assesses the risk level of each applicant.
Family Income Protection
- A Family Income rider provides income to the family for a designated period followed by a lump sum death benefit, adding financial security.
Group Life Conversion Privileges
- Death during the conversion period is covered even if the departing employee opts not to convert their policy, ensuring some protection.
Permanent Protection Policies
- Universal Life is an interest-sensitive form of permanent life insurance, allowing for flexible premium payments and potential cash value growth.
Reinstatement of Policies
- Evidence of insurability is required for reinstating a policy, but collateral assignment to the insurer is not necessary, avoiding extra steps.
Renewable Term Policies
- Renewable Term policies are renewable at the option of the insured, not the insurer, providing assurance for continuing coverage.
Suicide Clause and Death Benefits
- If an insured commits suicide after the expiration of the suicide clause, the insurer is obligated to pay the death benefit, safeguarding beneficiaries.
Continuation of Coverage
- Nonforfeiture Options enable continuation of coverage despite nonpayment of premiums, protecting the policyholder's investment.
Consumer Information Rights
- Under the Fair Credit Reporting Act, applicants can question the validity of any consumer information used in underwriting, ensuring transparency.
Variable Whole Life Policy Options
- Variable Whole Life policies are chosen for their potential to earn a higher rate of return on cash value, providing investment opportunities beyond traditional Whole Life policies.
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Description
Test your knowledge of life insurance concepts with this set of flashcards. Each card presents a question related to beneficiaries and contracts, providing an excellent tool for exam preparation. Use these flashcards to master the critical aspects of life insurance policies.
