Traditional Life Insurance Mock Exam 1

Life insurance policies with specific characteristics. Endowment policies provide a payout at the end of a period, while term policies offer protection for a set duration but no cash value.

An application for life insurance collects crucial information about the applicant's health and circumstances to assess their insurability and determine the terms of the contract.

Methods or actions to change a life insurance policy ownership and beneficiary to another person (usually a son) for inheritance purposes.

A designated beneficiary whose rights cannot be changed or revoked and benefits are assigned in an immovable manner, without the beneficiary’s permission.

Various payout options available from a life insurance policy upon death of the insured person. Examples include fixed amounts for a set time or life income.

Reasons why an insurance company can cancel a life insurance policy during a specific period (contestable period).

Predicting the likelihood of deaths in a specific group over a period of time, based on data analysis.

Attempting to determine when a specific person will pass away, based on known factors.

Insurance that can be extended for successive periods based on agreement with the insurer.

The right of a policyholder to renew their coverage, subject to the insurer's approval and potentially altered premiums.

A temporary agreement by the insurer that insurance coverage begins immediately, pending review, during an application process (usually life insurance).

A type of permanent life insurance that provides coverage for the policyholder's entire life and usually offers cash value.

A life insurance policy that will pay out either on death of the insured or at the end of the pre-set term

A type of life insurance that usually covers the insured for a certain period specified in the policy or until the death of the insured.

A sales approach in insurance where the agent assesses the client's complete financial needs and recommends tailored policies.

A provision that allows insurance payments to be discontinued while retaining some insurance coverage for a specific extended timeframe.

A payment option from an endowment policy that provides the policyholder a regular, recurring financial payout.

A life insurance settlement option providing income payments for the policyholder's lifetime.

The amount of medical information needed for a life insurance application which is dependent on applicant’s age, proposed insurance sum, and occupation.

Factors that support the ongoing validity/success of a life insurance policy.

Sources of information for insurance companies to evaluate a potential insured's risk.

Applicant's failure to disclose or providing false information in a life insurance policy application; invalidating the contract.

Various methods of distributing life insurance proceeds upon the insured's death.

Guarantees minimum benefits in life insurance policies, even if premium payments change.

Benefit of concentrating premium payments in a limited time period for better coverage.

A legal process used to resolve conflicting claims on the same insurance proceeds.

Endowment policies typically build cash value faster than whole life policies.

A legitimate reason for someone to insure another person's life or property.

Supplementary provisions that expand on basic life insurance coverage.

The payments made by the policyholder to maintain the insurance.

A choice to maintain coverage when policy payments are stopped.

Consequences for failing to pay interest on a policy loan.

A period after policy issuance where the insurer cannot contest its validity.

Insurance amount is adjusted to reflect the premium paid at the correct age.

Policy providing guaranteed cash values, annual distributions, and payout after a set time.

Assumes all group members are insurable if minimum work hours are met.

Policy with premiums payable for 20 years, paying full amount after 20 years.

Most important data requested in life insurance applications.

Policy isn't invalidated if the insured's death is misstated.

The company's authority to cancel a policy at any time.

Claims must be settled within 2 years.

Beneficiary needs to prove the insured's death.

After 2 years, the company cannot deny a claim.

Insured can change beneficiary at will.

Insured cannot add a third beneficiary.

Policy loan assignments require the primary beneficiary's consent.

Primary and secondary beneficiaries each receive 50% of policy face amount.

Insurer will adjust benefit for inaccurate age information.

If interest isn't paid on time, the insurer might limit future loans.

Premiums will increase each renewal.

The insurer may increment the loan amount or refuse further loans.

If premium payments have not been made and cash value is exhausted, the grace period is still available.

Events happening by chance will follow a pattern with numerous observations over time.

Individuals in poor health want to purchase insurance.

Policy is still active and covers for an extended period without premium payment.