Final Exam- Iowa Life Only
k is an insured under a life insurance policy owned by a third party. Which of these statements is true? -
(correct Answer) - K has no ownership rights
P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit
amount? - (correct Answer) - Accidental Death and Dismemberment clause
S, while in the process of converting her group life insurance to an individual policy, dies. What happens
to the claim her beneficiary submits? - (correct Answer) - Full benefits are payable under the Master
contract
Which of the following is TRUE is the owner of the IRA names their spouse as beneficiary, but then dies
before any distributions are made? - (correct Answer) - The account can be rolled into the surviving
spouses IRA
A life policyowner may sell their policy to a(n) ___ in order to receive a percentage of the policys face
value. - (correct Answer) - viatical settlement provider
On January 8, an applicant filled out an application for a life insurance policy but did not include the
initial premium. The insurance company approved the application on January 14 and issued the policy
January 15. The producer delivered the policy on January 26 and collected the first premium. When did
the coverage become effective? - (correct Answer) - January 26
What action will an insurer take if an interest payment on a policy loan is not made on time? - (correct
Answer) - automatically add the amount of interest due to the loan balance
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable
beneficiary. What action will the insurance company take if T requests a change of beneficiary? - (correct
Answer) - Request of the change will be refused
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the
guaranteed cash value is called the - (correct Answer) - Policy Loan provision
What advantage does the renewability feature give the term policy? - (correct Answer) - The insured may
extend the coverage period
T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage
as of the date of the application or medical examination, whichever is later. Assuming that T is an
acceptable risk, what item is given to T? - (correct Answer) - Conditional receipt
Post-tax dollar contributions are found in - (correct Answer) - Roth IRA investments
Which of the following is example of a nonforfeiture option? - (correct Answer) - Reduce Paid-Up option
What is one of the roles of commissioner? - (correct Answer) - enforce state insurance laws
, How does a typical Variable Life Policy investment account grow? - (correct Answer) - Through mutual
funds, stocks, bonds
What is the maximum fine for willfully violating the unfair trade practice law of iowa - (correct Answer) -
$5,000
At what time must a policy owner have insurable interest on the insured in order for the life policy to be
valid? - (correct Answer) - At the time of application
a noncontributory group term life plan is characterized by: - (correct Answer) - the entire cost of the plan
is paid for by the employer
The type of annuity that can be purchased with one monetary deposit is called a(n) - (correct Answer) -
Immediate annuity
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6
and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this? -
(correct Answer) - Modified Whole Life
Convincing a prospective insured to buy an insurance policy based on exaggerations is called - (correct
Answer) - Misrepresentation
Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank
loan? - (correct Answer) - collateral assignment
What is the purpose of the USA Patriot Act - (correct Answer) - detect and deter terrorism
Which of the following statements is CORRECT about accelerated death benefits? - (correct Answer) -
Must have a terminal illness to qualify
The combination of Whole Life and ____ Term insurance is referred to as a Family Income Policy -
(correct Answer) - decreasing
All of these are characteristics of an Adjustable Life policy EXCEPT - (correct Answer) - face amount can
be adjusted using policy dividends
What is the Suicide provision designed to do? - (correct Answer) - safeguard the insurer from an
applicant who is contemplating suicide
What type of contract liquidates an estate through recurrent payments? - (correct Answer) - annuity
D needs life insurance that provides coverage for only a limited amount of time while also paying the
lowest possible premium. What kind of policy is needed? - (correct Answer) - Level term
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How
much will the insurance company pay the beneficiary? - (correct Answer) - $20,000 death benefit
M completes an application for life insurance but does not pay the initial premium. All of these actions
must occur before M's policy goes into effect EXCEPT - (correct Answer) - free-look period has expired
T the producer is trying to dissuade a policyowner from replacing an existing insurance policy. This action
k is an insured under a life insurance policy owned by a third party. Which of these statements is true? -
(correct Answer) - K has no ownership rights
P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit
amount? - (correct Answer) - Accidental Death and Dismemberment clause
S, while in the process of converting her group life insurance to an individual policy, dies. What happens
to the claim her beneficiary submits? - (correct Answer) - Full benefits are payable under the Master
contract
Which of the following is TRUE is the owner of the IRA names their spouse as beneficiary, but then dies
before any distributions are made? - (correct Answer) - The account can be rolled into the surviving
spouses IRA
A life policyowner may sell their policy to a(n) ___ in order to receive a percentage of the policys face
value. - (correct Answer) - viatical settlement provider
On January 8, an applicant filled out an application for a life insurance policy but did not include the
initial premium. The insurance company approved the application on January 14 and issued the policy
January 15. The producer delivered the policy on January 26 and collected the first premium. When did
the coverage become effective? - (correct Answer) - January 26
What action will an insurer take if an interest payment on a policy loan is not made on time? - (correct
Answer) - automatically add the amount of interest due to the loan balance
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable
beneficiary. What action will the insurance company take if T requests a change of beneficiary? - (correct
Answer) - Request of the change will be refused
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the
guaranteed cash value is called the - (correct Answer) - Policy Loan provision
What advantage does the renewability feature give the term policy? - (correct Answer) - The insured may
extend the coverage period
T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage
as of the date of the application or medical examination, whichever is later. Assuming that T is an
acceptable risk, what item is given to T? - (correct Answer) - Conditional receipt
Post-tax dollar contributions are found in - (correct Answer) - Roth IRA investments
Which of the following is example of a nonforfeiture option? - (correct Answer) - Reduce Paid-Up option
What is one of the roles of commissioner? - (correct Answer) - enforce state insurance laws
, How does a typical Variable Life Policy investment account grow? - (correct Answer) - Through mutual
funds, stocks, bonds
What is the maximum fine for willfully violating the unfair trade practice law of iowa - (correct Answer) -
$5,000
At what time must a policy owner have insurable interest on the insured in order for the life policy to be
valid? - (correct Answer) - At the time of application
a noncontributory group term life plan is characterized by: - (correct Answer) - the entire cost of the plan
is paid for by the employer
The type of annuity that can be purchased with one monetary deposit is called a(n) - (correct Answer) -
Immediate annuity
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6
and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this? -
(correct Answer) - Modified Whole Life
Convincing a prospective insured to buy an insurance policy based on exaggerations is called - (correct
Answer) - Misrepresentation
Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank
loan? - (correct Answer) - collateral assignment
What is the purpose of the USA Patriot Act - (correct Answer) - detect and deter terrorism
Which of the following statements is CORRECT about accelerated death benefits? - (correct Answer) -
Must have a terminal illness to qualify
The combination of Whole Life and ____ Term insurance is referred to as a Family Income Policy -
(correct Answer) - decreasing
All of these are characteristics of an Adjustable Life policy EXCEPT - (correct Answer) - face amount can
be adjusted using policy dividends
What is the Suicide provision designed to do? - (correct Answer) - safeguard the insurer from an
applicant who is contemplating suicide
What type of contract liquidates an estate through recurrent payments? - (correct Answer) - annuity
D needs life insurance that provides coverage for only a limited amount of time while also paying the
lowest possible premium. What kind of policy is needed? - (correct Answer) - Level term
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How
much will the insurance company pay the beneficiary? - (correct Answer) - $20,000 death benefit
M completes an application for life insurance but does not pay the initial premium. All of these actions
must occur before M's policy goes into effect EXCEPT - (correct Answer) - free-look period has expired
T the producer is trying to dissuade a policyowner from replacing an existing insurance policy. This action
