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2. Indicate which of the following is not a function of an application for life insurance policy.
3. A father has his present life insurance payable to his estate and because he has now retired he
wants to pass the policy on his son will assume the premium payments. Which of the following will
have to appoint his son to achieve his desire and protect the son from Estate Tax Liability?
A. Absolute assignment
B. Absolute assignee
4. A policy where an irrevocable beneficiary has been designated the insured, without the
beneficiary’s permission can
C. Fixed amount
A. Company discovers at any time that the policy owner was not a minor at the time of
application
B. Company discovers at any time that the policy owner was actually a minor at the time of
Application
7. Which of the following is the least important reason for requiring that insurance agents be
licensed?
8. In the event that a policy owner elects the paid-up insurance option
B. The premiums does not cease and the protection does not continue
C. The premiums cease and protection continues with a reduced amount of coverage
D. The premiums does not cease and the protection continues with a reduced amount of
coverage
9. The company will allow a policy change from a higher premium to a lower premium provided the
insured
10. A policy which permits the policyholder to vary the level of premiums, the sum insured and has its
cash values dependent upon the investment performance and the level of premium paid is known as
____________ policy
A. Global Life
B. Universal life
C. Company Life
D. Corporate Life
11. Which of the following statements about “Disability Waiver of Premium Rider” is false?
12. In most life insurance applications, the largest amount of information requested is data which
14. The total life coverage of a permanent basic policy can be greatly increased through the use of
15. Life insurance companies make use of the laws of probability in order to
16. In the case of renewable term insurance, the policy owner may
A. Immediately provides interim insurance that remains in effect until the policy
B. Immediately provides interim insurance that does not remain in effect until the policy
18. Endowment life insurance and term life insurance are similar in that both plans.
B. Provide life insurance protection for only the period of time specified in the policy contract
19. An agent who determines a prospect’s complete financial requirements preparatory to offering
him a policy using the correct selling approach knows as
20. Name the provision in a permanent life insurance policy under which premiums are discontinued,
full insurance will be maintained for a specified period:
21. Notwithstanding various possible legal impediments, if the owner of an endowment at age 65
policy tells you that the maturity of the policy he wants to provide his church with a monthly donation
for as long as the church exists. Which option do you recommend?
A. Interest option
B. Policy option
C. both A and B
D. Neither of the age of the applicant and the proposed sum to be insured
23. The conservation of a life insurance policy is dependent on all the following except
A. Pressure selling
B. Pressure cooking
C. Excess selling
D. Excess cooking
24. All of the following are sources of information to an insurance company pertaining to the
insurability of an applicant except
25. If the applicant for life insurance fails to disclose or misrepresents material fact, the contract is
B. Valid
D. Automatic invalid
26. The settlement options provision may provide all of the following except:
A. Proceeds held by the government, with interest payable to the beneficiary on request
B. Proceeds held by the company, with interest payable to the beneficiary on request
C. Proceeds held by the government, without interest payable to the beneficiary on request
D. Proceeds held by the company, without interest payable to the beneficiary on request
27. Non-forfeiture provisions are included in whole life and endowment policies to assure the policy
owner that certain minimum policy benefits shall remain with him even under certain changed
conditions. Non forfeiture values guarantee to the policy owner that
A. Any guaranteed policy values will belong to the agent even if premium payments are
discounted
B. Any guaranteed policy values will belong to the policy owner even if premium payments are
discounted.
C. Any guaranteed policy values will belong to the manager even if premium payments are
discounted
28. Purchasing a continuous-premium, whole life policy rather than a limited payment, whole life
policy gives the policy owner the advantage of
29. In certain situations a company may file interpleader actions with a Court of Law, This remedy is
used to
A. Because of its very short duration the cash value of a yearly renewable term policy grows very
Fast
B. Because of its very long duration the cash value of a yearly renewable term policy grows very
fast
31. Which of the following does not have a legitimate insurable interest?
A. Top-ups
B. Top-downs
C. Face amount
D. Riders
A. Cash is not required for all premiums paid in the grace period
34. A non-forfeiture option would ordinarily be selected at the time a policy owner
35. If the interest on a policy loan is not paid at the policy anniversary the insurance company may
A. Prevents the company from denying a claim after the policy has been in force for 2 years
B. Does not prevent the company from denying a claim after the policy has been in force for 2
years
C. Prevents the company from not denying a claim after the policy has been in force for 2 years
38. When you bought an insurance policy on your wife’s life, you were 27 and she was 26, but you
stated that you were 26 and she was 27. Five years later your wife died. The insurer will pay
39. If the interest on a policy loan is not paid at the policy anniversary the insurance company may
C. there is no amswer
40. A yearly renewable term life insurance policy generally specifies that