Traditional Life Online Mock Exam
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Traditional Life Online Mock Exam

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@ResourcefulLemur

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Questions and Answers

In the case where the insured designated his common law wife as beneficiary, which of the following statements is CORRECT?

  • Insurer may rescind the contract, the premiums is forfeited
  • Designation of beneficiary is void, estate of the insured will get the proceeds (correct)
  • Policy is void, the insurer must return the premiums paid
  • Beneficiary is disqualified, the proceeds will go to the estate of the beneficiary

    • Which of the following statements is/are CORRECT with regards to the definition of “accident”?

  • Accident is an event which happens by chance or fortuitously
  • Accident must happen without intention or design and which is unexpected, unusual and unforeseen
  • All of the above (correct)
  • I and III only

    • The only instance when a life insurance contract is treated primarily as an indemnity agreement is when?

  • Person insures the life of his or her spouse to protect against the loss of income earned by the spouse (correct)
  • Policyholder insures their own life to protect against loss of income
  • Insured individual designates a charity as beneficiary
  • A person insures the life of a friend

    • If the debt was already paid when the debtor dies, what happens to the proceeds of the insurance in a creditor-debtor relationship where the CREDITOR insures the life of the DEBTOR?

    <p>Proceeds of the insurance will go to the estate of the insured</p> Signup and view all the answers

    If the person whose life is insured dies during the grace period and the premiums were not paid, what amount will the insurance company usually pay to the beneficiary?

    <p>Face amount of the policy minus the unpaid premium</p> Signup and view all the answers

    What are life insurance policy loans limited to?

    <p>Cash value of the policy</p> Signup and view all the answers

    In practice, how are most claims for the death benefits of life insurance policies handled?

    <p>Investigated thoroughly for evidence of misrepresentation or fraud before payment is made</p> Signup and view all the answers

    What do limited payment life policies limit?

    <p>Limit the period during which the premiums are payable</p> Signup and view all the answers

    In life insurance, what does 'substandard rates' generally refer to?

    <p>Premiums charged to persons who are considered to be higher-than-average risk categories</p> Signup and view all the answers

    Study Notes

    Life Insurance Policy

    • If the insured designates their common-law wife as the beneficiary, the insurance company will pay the benefit to her.

    Definition of "Accident"

    • An "accident" refers to an unexpected and unforeseen event, not a predictable consequence of a deliberate act.

    Indemnity Agreement

    • A life insurance contract is treated primarily as an indemnity agreement only when the creditor insures the life of the debtor.

    Creditor-Debtor Relationship

    • If the debt was already paid when the debtor dies, the proceeds of the insurance will go to the creditor.

    Grace Period

    • If the person whose life is insured dies during the grace period and premiums were not paid, the insurance company usually pays the beneficiary the premiums paid, minus any outstanding debts.

    Policy Loans

    • Life insurance policy loans are limited to the cash value of the policy.

    Claims Handling

    • Most claims for death benefits of life insurance policies are handled by the insurance company paying the full policy amount to the beneficiary.

    Limited Payment Life Policies

    • Limited payment life policies limit the number of premiums paid by the policyholder, but provide lifelong coverage.

    Substandard Rates

    • "Substandard rates" in life insurance generally refer to higher premiums charged to individuals who are considered higher risk due to health or other factors.

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    Description

    Test your knowledge of traditional life insurance with this online mock exam. Mark the correct answer by putting an X beside the letter. From types of life policies to beneficiary designations, this exam covers essential concepts for insurance professionals.

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