6. NV - Life Insurance Practice Final Examination Rated A+

6. NV - Life Insurance Practice Final Examination Rated A+ Jason is the insured in a $100,000, 10 year renewable term policy. Soon after taking out the policy, he develops a serious heart condition. Which of the following statement is CORRECT? a. Since the condition manifested after the policy was issued, he will not be able to renew his policy. b. Jason will be able to renew his policy c. It will be necessary for Jason to show evidence of insurability in order to renew the policy d. If Jason renews his policy, it will be rated for his health condition. b. Jason will be able to renew his policy Jane buys a $25,000 policy and her agent tells her that as long as she is approved, the coverage goes into effect immediately. What did Jane's agent give her? a. Consideration b. Conditional receipt c. Return of premium d. Binding receipt b. Conditional receipt The primary purpose of an annuity is to a. liquidate the separate account of an investment portfolio b. provide income for an individual's retirement c. provide income for a beneficiary d. create an estate immediately a. liquidate the separate account of an investment portfolio Under what circumstance would an insurance applicant be asked to submit a signed statement of continued good health? a. When the initial premium is not submitted with the application b. When the policy is underwritten as substandard c. In order to receive a preferred rating d. When an inspection report is ordered a. When the initial premium is not submitted with the application When a firm established a contributor group term life insurance contract, what percentage test must be met for the participation a. 50% b. 60% c. 75% d. 100% c 75% Louis owns a $10,000 term life policy. He paid the $200 annual premium on Feb 1. Louis fails to pay the second annual premium and dies on Feb 28 of the following year. How much will the beneficiary receive from Louis' insurance company a. $0 b. $10,000 c. $9,800 d. Non of the above c. $9,800 All of the following statements are true with regard to the 10 day free look provision in a life insurance policy EXCEPT a. the 10 day free look period begins when the insured receives the contract b. an insured who returns the policy within the 10 days free look period will receive a full refund of premiums paid c. if a conditional receipt was issued, a pro rata refund will be made if the insured returns the policy within the free look period d. to get a refund, the policy holder must return the policy within 10 days from the date the policy was received c. if a conditional receipt was issued, a pro rata refund will be made if the insured returns the policy within the free look period All of the following are common life insurance policy provisions EXCEPT a(n) a. entire contract clause b. insuring clause c. free look period d. premium deductibility option d. premium deductibility option Which of the following statements concerning the Fair Credit Reporting Act is CORRECT a. It provides that credit life insurance will be available to an applicant on an attained age basis b. It provides additional funding for the cash savings value of a whole life policy c. It requires that the applicant for insurance coverage will be informed if a consumer report is requested. d. It offers protection against creditors if the applicant defaults on a loan c. It requires that the applicant for insurance coverage will be informed if a consumer report is requested. The underwriting department of a life insurance company acquires information on an applicant for life insurance coverage from all of the following sources EXCEPT a. an agent's report b. the life insurance application c. Dept of Motor Vehicles records d. the Medical Information Bureau c. Dept of Motor Vehicles records To cover the contingency of a family breadwinner's death, all of the following would be appropriate applications for a decreasing term insurance policy EXCEPT to a. ensure that the family's 5 year old son will have a source of funds for his college education b. cover the family's mortgage c. cover the family's car payments d. ensure that the family's home improvement loan is covered a. ensure that the family's 5 year old son will have a source Pearl takes out a $100,000 permanent insurance policy on her life, naming her daughter, Juanita, as the beneficiary. Five years after the policy was issued, Pearl dies and Juanita submits a claim to the insurer for the death benefit. Upon reviewing the claim, the insurer discoverers that Pearl had made a number of misstatements on the original applications. The insurer will a. deny the claim entirely b. pay the full $100,000 to Juanita c. calculate any additional costs the company incurred due to the misstatements, deduct them from the death proceeds, and pay Juanita the balance d. require Juanita to substantiate the misstatements in order to be paid the full $100,000 b. pay the full $100,000 to Juanita An insured may receive protection against the unintentional lapse of his life insurance contract by requesting the a. cash savings amount b. extended term option c. at interest option d. automatic premium loan d. automatic premium loan Under a group life insurance policy, an employee demonstrates her evidence of participation b producing a a. master policy b. certificate of insurance c. group policy d. premium receipt b. certificate of insurance Kevin takes out a loan from the cash value of his life policy, and subsequently dies. The insurance company will typically pay a. the face amount minus the interest and loan amount b. the full death benefit of the policy c. no less than $10,000 d. the full death benefit after receiving the loan balance from the beneficiary a. the face amount minus the interest and loan amount Which of the following is the most likely outcome if an individual who engages in a hazardou