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Life Insurance Premiums and Policy Loans Quiz

12 Questions

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Life Insurance Premiums and Policy Loans Quiz

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Questions and Answers

What is the maximum timeline for reinstating a lapsed policy subject to normal conditions of proof of insurability?

Two years

One year

Six months

Three years (correct)

Who is responsible for making the necessary assumptions and calculations in order to determine the premium rates for life insurance policies?

Senior statistician

Insurance commissioner

Life agent

Actuary (correct)

What is the fundamental advantage of using insurance as a means of meeting economic losses?

Deferred for a specified period of time

Spread over a large number of people (correct)

Only available to the rich

Limited to specific groups

What must an individual meet when purchasing life insurance?

Certain standards of health and occupation Signup and view all the answers

What does insurance provide protection against?

Reduce the possibility of the occurrence of the event causing the loss Signup and view all the answers

When is a life insurance contract treated primarily as an indemnity agreement?

Person in a partnership insures the life of his partner to protect the firm against loss due to the death of that partner Signup and view all the answers

What does the convertible feature of a term insurance policy allow?

Changed to a permanent insurance policy without evidence of insurability Signup and view all the answers

What is an advantage of choosing a straight-premium whole life policy over a limited payment whole life policy?

Concentration of premium payments during the period of highest earnings Signup and view all the answers

What is the maximum amount that a life insurance policy loan can be limited to?

Cash value of the policy Signup and view all the answers

When an irrevocable beneficiary has been designated and the policy owner needs to loan against the policy, what is required for any transactions or changes in the policy?

Any transactions or changes would need endorsement of the irrevocable beneficiary Signup and view all the answers

What is one fundamental advantage of using life insurance as a means of meeting economic losses?

Spread over a large number of people Signup and view all the answers

Which statement is FALSE regarding an agent's role in selling life insurance?

When an agent sells a policy, he must guarantee high returns on investment Signup and view all the answers