Life Insurance Policy Quiz

Questions and Answers

What is usually payable to the beneficiary if the insured dies during the grace period of an unpaid life insurance policy?

Cash surrender value of the policy minus the unpaid premium (correct)

Total premium paid plus interest

Face amount of the policy minus the unpaid premium

Full face amount

When is an insurance agent's license renewed?

For the lifetime of the agent

When the corresponding application and fee are received by the Insurance Commissioner

Only for a period of one month

When the Commissioner is satisfied that the information in the application is accurate and all requirements are met (correct)

What is a restriction on commission sharing for an insurance agent?

Never allowed with anyone (correct)

Allowed with another licensed agent or agents only

Always allowed with anyone

Allowed when selling whole life policies, but not term policies

What is 'twisting' in the context of insurance?

Replacing a policy from one company with one from another Signup and view all the answers

When is interest charged on policy loans?

To replace investment income the insurer cannot earn since a loan has been granted Signup and view all the answers

What can result in the revocation of an insurance agent's license?

Any or all of the above Signup and view all the answers

What does 'knocking' mean in the insurance industry?

Persuading a policyowner to surrender or lapse a policy Signup and view all the answers

What happens to the beneficiary if the insured dies during the grace period of an unpaid life insurance policy?

They receive the cash surrender value minus the unpaid premium Signup and view all the answers

What does a joint life annuity promise to pay?

A fixed annual income as long as both annuitants survive Signup and view all the answers

What is NOT a prohibited practice for an insurer?

Promising to pay a fixed annual income as long as both annuitants survive Signup and view all the answers

What are the three non-forfeiture values in a permanent policy?

Cash surrender value, paid value, extended term insurance Signup and view all the answers

What are the basic settlement options for a life insurance policy?

Fixed amount, fixed period, interest, fixed period and for life Signup and view all the answers

What will the insurance company pay if an applicant misstates their age on a life insurance application?

The face amount adjusted for misstatement of age Signup and view all the answers

What is the use of a mortality table in insurance?

To determine the number of years a person will live on average Signup and view all the answers

Study Notes

Life Insurance Policy Provisions

If the insured dies during the grace period of an unpaid life insurance policy, the beneficiary receives the face amount minus the unpaid premium.

Insurance Agent License

An insurance agent's license will be renewed when the Commissioner is satisfied that the information in the application is accurate and all requirements are met.
An insurance agent's license is valid for a specific period, not a lifetime, and requires renewal.
To renew a license, the corresponding application and fee must be received by the Insurance Commissioner.

An agent is allowed to share commissions with another licensed agent or agents, but not with anyone else.

Policy Replacement

Persuading a policyowner to surrender or lapse a policy in one company and replace it with a policy from another company is called twisting.

Policy Loans

Interest is charged on policy loans to replace investment income the insurer cannot earn since a loan has been granted.
The interest charged on policy loans is not limited to a specific type of policy.

Insurance Agent License Revocation

An insurance agent's license can be revoked for fraudulent practices, violation of any provision of the Insurance code, or misrepresentation in the application for license.

Insurance Terminology

Knocking refers to making derogatory remarks about competing underwriters or companies.

Non-Forfeiture Values

The three non-forfeiture values in a permanent policy are cash surrender value, loan value, and extended term insurance.

Settlement Options

The basic settlement options are fixed amount, fixed period, interest, fixed period, and life.

Misstatement of Age

If the policyholder misstates their age or their beneficiary's age, the insurance company will pay the face amount adjusted for the misstatement of age.