Life Insurance Review Test Exam Questions And Answers

When Jonas died, it was discovered that he was actually 6 years older than he had claimed when applying for an insurance policy. As a result of this discovery, the insurance company - will pay only the amount of insurance that Jonas' premiums would have purchased at his correct age In a whole life policy - the cash value is greatest at the end of the policy period, and the insurance protection is greatest at the start of the policy An insurance contract is an aleatory contract. This means - equal value is not given by both parties to the contract What is considered an income need when determining the amount a person needs for personal life insurance - family dependency The suicide clause states that if an insured commits suicide: - During the first 2 years after the policy is in effect, the insurance company will only pay the premium paid by the insured, not the face amount of the policy What method of handling risk means that the individual will pay for the loss if it occurs? - Retention Characteristics of an annuity include: - - protects against living too long - used to accumulate money for income payments while living - used to liquidate an estate When a group plan is contributory, what percentage of employees must want and be willing to pay for coverage? - 75% The Lucrative Lozenge Company provides a $5,000 monthly bonus plan to retirees who served as senior executives. This benefit is not available to other retirees of the company. This is an example of: - a overqualified plan Ed had a $50,000 policy with cash values of $10,000. Including the interest owed, there is a $2,000 policy loan outstanding. Ed finds that he can no longer make premium payments on this policy. Ed chooses the cash surrender value option, he will receive - $8,000 Producers selling variable life insurance - must have a valid life license and must be registered with FINRA The type of annuity that guarantees to pay total income at least equal to the purchase price of the contract is a - life with refund annuity What is the proper term for a company owned by its policyowners? - a mutual insurance company The type of annuity in which the values grow according to the performance of the investment medium, and in which benefits may fluctuate according to market performance, is called - variable annuity Income payments made from an annuity are - only partly subject to federal taxation One of the greatest advantages of convertible and renewable term policies is that - the insured is not required to show proof of insurability in order to renew or convert When the annuity period begins in a variable annuity contract, the accumulation units are converted to - annuity units TRUE or FALSE: Premiums paid for individual life insurance are tax-deductible - FALSE Mr. and Mrs. Burden receive a monthly annuity payment. Mr. Burden dies, but Mrs. Burden continues to receive a monthly annuity payment. The Burdens have a - joint life and survivor annuity settlement option In group insurance, the evidence of an agreement between the insurer and the employer or association is the - contract The annuity period refers to: - The time during which payments are made to the annuitant Susan has been classified as a standard risk by her insurance company. This means that Susan - has average health and a normal life expectancy When the entire death benefit is paid in a lump sum to a beneficiary, it is - not taxable as income The Medical Information Bureau is - a non-profit insurance trade association The death benefit of a variable life policy - may go up or down but will fall below the guaranteed minimum amount specified in the policy With life insurance, insurable interest must exist - at the time of application A variable life policy - has a death benefit that varies to reflect the investment results of the underlying separate account but will not drop below a guaranteed minimum Paul dies before his annuity has paid out an amount at least equal to the purchase price of the annuity, so Paul's beneficiary continues to receive annuity payments until that amount has been reached. This type of annuity is - life with refund annuity