Life Insurance Policy Provisions and Regulations, Exams of Nursing

Download Life Insurance Policy Provisions and Regulations and more Exams Nursing in PDF only on Docsity! 2024 Idaho Life Insurance Practice Exam from Exam Fx Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company are called: 1. Common errors 2. Warranties 3. Fraudulent statements 4. Material Misrepresentation 4. Material Misrepresentation Which nonforfeiture option provides coverage for the longest period of time? 1. Extended Term 2. Accumulated at interest 3. Paid up option 4. Reduced paid up option 4. Reduced paid up option The Ownership provision entitles the policy owner to do all of the following EXCEPT: 1. Assign the policy 2. Receive a policy loan 3. Designate a beneficiary 4. Set premium rates 4. Set premium rates All of the following entities regulate variable life policies EXCEPT: 1. The SEC 2. The Insurance Department 3. Federal Government 4. The Guaranty Association 4. The Guaranty Association Which type of life insurance policy allows the policy owner to pay more or less than the planned premium? 1. Variable whole life 2. Universal Life 3. Straight whole life 4. Decreasing Term 2. Universal Life An insured and his wife are both involved in a head on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision 1. Second to Die 2. Survivor Life 3. Accidental Death 4. Common Disaster 4. Common Disaster Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? 1. Reinstatement 2. Extended Term 3. Reduced Paid up Option 4. Automatice Premium loan 4. Automatice Premium loan The policy owner pays for her life insurance annually. Until now, she has collected a non taxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this? A. Paid up addition 2. Reduction of premium 3. Accumulation of interest 4. Cash option Reduction of Premium If a life policy allows the policy owner to make periodic additions to the face amount of standard rates, without proving insurability, the policy includes a: 1. Paid up additions option 2. Cost of living provision 3. Guaranteed insurability Rider 4. non forfeiture Option Which of the following is NOT true regarding an annuity certain? 1. There are no life contingencies 2. It is a short-term annuity 3. It will pay until a fixed amount has been liquidated 4. Benefits stop at the annuitant's death 4. Benefits stop at the annuitant's death The term "fixed" in a fixed annuity refers to all of the following EXCEPT: 1. Guaranteed rate of interest 2. Equal Annuity payments 3. Death Benefits 4. Amount and lengths of payments 3. Death Benefits Am underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require? 1. A complete medical record 2. Sworn health affidavit from applicant 3. Statement of continued good health 4. Attending physician statement 4. Attending physician statement The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary received? 1. $100,000 2. $50,000 3. $300,000 4. $0 $100,000 What kind of policy allows withdrawals or partial surrenders? 1. Universal life 2. Term Policy 3. 20 day life 4. Variable whole life 1. Universal Life Which of the following would help prevent a universal life policy from lapsing? 1. Corridor of Insurance 2. Target Premium 3. Adjustable premium 4. Face Amount 2. Target Premium An agent selling variable annuities must register with: 1. Department of Insurance 2. The guaranty Association 3. SEC 4. FINRA 4. FINRA All of the following are true of key person insurance EXCEPT: 1. The plan is funded by permanent insurance only 2. The employer is the owner, payor and beneficiary of the policy 3. The key employee is the insured 4. There is no limitation to the number of key employee plans in force at any one time 1. The plan is funded by permanent insurance only What is the maximum penalty for habitual willful noncompliance with the Fair Credit reporting act? 1. $ 1,000 2. $100 per violation 3. Revocation of license 4. $2,500 4.$2,500 All of the following information about a customer must be used in determining annuity suitability EXCEPT: 1. Financial Experience 2. Annual Income 3. Tax Status 4. Beneficiaries Age 4. Beneficiaries Age If a consumer requests addition information concerning an investigative consumer report, how long dies the insurer or reporting agency have to comply? 1. 10 days 2. 5 days 3. 3 days 4 7 days 5 days We have an expert-written solution to this problem! Insurance companies can defer a policy loan request for up to six months unless the reason for the loan is: 1. To pay medical bills 2. To pay for an emergency cost, which are defined by state statues 3. To pay the policy premium 4. To pay for a dependent's education 3. To pay the policy premium In the event of replacement, the replacing insurance company must obtain from the current producer all of the following except: 1. A list of applicant's life insurance or annuity contracts to be replaced 2. The new policy's first premium payment 3.. A copy of the replacement notice provided to the applicant 4. Non of the above 2. The new policy's first premium payment In order for a debtor group to qualify for group life insurance, what would be the minimum number of participants? 1. 50 2. 100 3. 25 4. 10 2. 100 A participating insurance policy may do which of the following? 1. Provide group coverage 2. Pay dividends to the policy owner 3. Require 80% of participation 4. Pay dividends to the stock holder 2. Pay dividends to the policy owner We have an expert-written solution to this problem! What is the time period called during which the surviving spouse of the insured does not receive social security income? A. Waiver of premium B. Blackout period C. Probationary period D. Retention of Capital B. Blackout period Which of the following premium modes would result in the highest annual cost for an insurance policy? A. Quarterly B. Annual C. Monthly D. Semi-annual C. Monthly What is the benefit of choosing extended term as a nonforfeiture option? A. it matures at age 100 B. It allows for coverage to continue beyond the maturity date C. It has the highest amount of insurance protection D. It can be converted to a fixed annuity C. It has the highest amount of insurance protection Which of the following is true about the premium on the children's rider in a life insurance policy? A. It remains the same no matter how many children are added to the policy B. It decreases when an adopted child is added to the policy C. It decreases when the oldest child reaches the age of 21 D. It increases when a newborn baby is added to the policy Which of the following is true of a children's rider added to an insured's permanent life insurance? A. It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age B. The policy covers only the natural children of the insured C. Each child covered must show evidence of insurability D. It is permanent insurance A. It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age An insured decides to surrender his $100,000 whole life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable? A. $50,000 B. $15,000 C. $3,000 D. $18,000 C. $3,000 Annually renewable term policies provide a level death benefit for a premium that A. Decreases Annually B. Increases Annually C. Fluctuates D. Remains Level B. Increases Annually An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits? A. The entire living benefit is considered taxable income B. A portion of the benefit up to a limit is tax free, the rest is taxable income C. Principal is tax free, interest is taxed D. The entire benefit would be tax free B. A portion of the benefit up to a limit is tax free, the rest is taxable income Peril is most easily described as A. Something that increases the chance of loss B. An unhealthy attitude about safety C. The chance of a loss occurring D. The cause of the loss insured against . The cause of the loss insured against If a life insurance agent wants to affect a savings of premium rates by backdating an application for life insurance, what is the maximum time period that an application may be backdated? A. It varies B. One year C. Back dating is not allowed D. 6 months The paid up addition option uses the dividend A. To purchase a one year term insurance in the amount of the cash value B. To purchase a smaller amount of the same type of insurance as the original policy C. To reduce the next years premium, D. To accumulate savings for retirement B. To purchase a smaller amount of the same type of insurance as the original policy Which of the following statements is correct about a standard risk classification in the same age group with similar lifestyles? A. Standard risk requires extra rating B. Standard risk pays a higher premium than substandard risk C. Standard risk is also known as high exposure risk D. Standard risk is representative of the majority of people D. Standard risk is representative of the majority of people The term "illustration" in a life policy refer to A. Picture accompanying the policy B. Charts and graphs C. A depiction of policy benefits and guarantees D. A presentation of non guaranteed elements of the policy D. A presentation of non guaranteed elements of the policy Your client wants both protection and savings from the insurance and is willing to pay premiums until retirement at age 65. What would be the right policy? A. Limited pay whole life B. Interest sensitive whole life C. Life annuity with period certain D. Increasing term A. Limited pay whole life An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean for the beneficiaries? A. One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies B. The beneficiary will receive 2/3 of the total benefit with the final 1/3 payable when the beneficiary dies C. The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries are alive D. The beneficiary will receive 2/3 lump sum up front and the remaining 1/3 will be paid over time C. The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries are alive Concerning Juvenile Life insurance, which of the following statements is INCORRECT? A. It can be a limited premium payment policy B. Usually the parent or guardian is the applicant for insurance on the life of a minor C. Juvenile Life is classified as any life insured purchased by a minor D. Juvenile Life is classified as any life insurance written on the life of a minor C. Juvenile Life is classified as any life insured purchased by a minor The premium of survivorship life policy compared with a joint life policy would be A. Half the amount B. Lower C. As high D. Higher B. Lower Which of the following is not true regarding the Life with Guaranteed minimum annuity settlement option? A. It is a life contingency option B. It does not guarantee that the entire principle will be paid C. Payments can be made in installments and as a single cash refund D. The beneficiary receives the remainder of the principal amount upon the annuitant's death B. It does not guarantee that the entire principle will be paid Under 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid A. Until the policy owners age 100 B. For at least 20 years C. for 20 years or until death whichever occurs first D. Until the policy owner is 65 C. for 20 years or until death whichever occurs first Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean? A. The beneficiary will only receive payments of interest earned on the death benefit B. The beneficiary must pay interest to the insurer C. The beneficiary will receive the lump sum plus interest D. The primary beneficiary will receive the death benefit and the secondary beneficiaries will share interest payments A. The beneficiary will only receive payments of interest earned on the death benefit Items stipulated in the contract that the insurer will not provide coverage for are found in the A. Exclusions Clause B. Insuring Clause C. Benefit Payment Clause D. Consideration Clause A. Exclusions Clause An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to next year's premium, thus reducing it to $900. What option does this describe? A. Reduction in premium B. Accumulation at interest C. Cash option D. Flexible Premium A. Reduction in premium What determines the cash value of a variable life policy? A. The company's general account B. Premium Mode C. The performance of the policy portfolio D. The policy guarantees C. The performance of the policy portfolio An insured owns a life insurance policy and pays her medical bills from the cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy is this? A. Term Life B. Limited Pay C. Universal Life D. Adjustable Life C. Universal Life Which rider on a permanent life insurance policy provided an amount of insurance for every family member? A. Children's rider B. Family term rider C. Spouse rider D. Additional insured rider B. Family term rider A couple has life insurance and want to provide for the financial needs of their children if one or both die prematurely. This personal use of life insurance is called A. Survivor protection B. Life planning C. Survivorship insurance D. Juvenile protection provision A. Survivor protection Which of the following is another term for the accumulation period of an annuity? A. Annuity Period B. Liquidation Period C. Pay in period D. Premium Period C. Pay in Period A producer is helping a married couple determine the financial needs of their children in the event on or both of should die prematurely. This is a personal use of life insurance known as: A. Survivor Protection B. Life Planning C. Survivorship Insurance 4. Juvenile protection provision A. Survivor Protection Which of the following is another term for the accumulation period of an annuity A. Annuity Period B. Liquidation period C. Pay-in period D. Premium period C. Pay-in period A situation in which a person can only lose or have no change represents: 1. Speculative Risek 2. Hazard 3. Adverse selection 4 Pure Risk 4. Pure Risk What is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of serving in the military A. Limited Benefit