Life Insurance Exam Prep: Policies,
Applications, and Nonforfeiture Options
Which of the following would be considered a nonmedical insurance application?
a) An application that does not ask any questions about the applicant's medical history
b) An application submitted with the Agent's Report
c) Any application for life insurance
d) An application on which the medical information is completed by the applicant and the agent only -
✔✔d) An application on which the medical information is completed by the applicant and the agent only
An application on which all of the questions, including medical history questions, do not need to be
completed by medical professionals, and may be completed by the applicant and the agent.
Which of the following statements is true regarding the cash value in a Universal life policy?
a) The insurer backs the cash value with a nonguaranteed interest rate.
b) The insurer backs the cash value with a current interest rate.
c) The insurer credits the cash value in the policy with a current interest rate.
d) The insurer credits the cash value in the policy with a guaranteed intereste rate. - ✔✔c) The insurer
credits the cash value in the policy with a current interest rate.
The insurer credits the cash value in the policy with a current (nonguaranteed) interest rate and backs
the cash value with a lower guaranteed (contract) rate of interest.
If an insured requires an application in order to reinstate a policy, and if the insured requests
reinstatement in writing, an application must be delivered to the insured within
a) 7 days
, b) 10 days
c) 15 days
d) 30 days - ✔✔b) 30 days
If, in order to renew or reinstate a life insurance or annuity policy, an insurer must first receive an
application, the insurer must supply this application to the insured within 30 days, upon the insured's
request.
Which of the following insurers are owned by stockholders who have the usual rights of ownership,
including the right of voting?
a) Reciprocal
b) Fraternal
c) Stock
d) Mutual - ✔✔c) Stock
Only stock insurance companies are owned and controlled by stockholders.
When an employee terminates coverage under a group insurance policy, coverage continues in force
a) Until the employee can obtain coverage under a new group plan.
b) Until the employee notifies the group insurance provider that coverage conversion policy is issued.
c) For 31 days.
d) For 60 days. - ✔✔c) For 31 days.
An employee has 31 days under the conversion privilege to convert to an individual policy.
Which of the following is the closest term to an "authorized" insurer?
a) Certified
Applications, and Nonforfeiture Options
Which of the following would be considered a nonmedical insurance application?
a) An application that does not ask any questions about the applicant's medical history
b) An application submitted with the Agent's Report
c) Any application for life insurance
d) An application on which the medical information is completed by the applicant and the agent only -
✔✔d) An application on which the medical information is completed by the applicant and the agent only
An application on which all of the questions, including medical history questions, do not need to be
completed by medical professionals, and may be completed by the applicant and the agent.
Which of the following statements is true regarding the cash value in a Universal life policy?
a) The insurer backs the cash value with a nonguaranteed interest rate.
b) The insurer backs the cash value with a current interest rate.
c) The insurer credits the cash value in the policy with a current interest rate.
d) The insurer credits the cash value in the policy with a guaranteed intereste rate. - ✔✔c) The insurer
credits the cash value in the policy with a current interest rate.
The insurer credits the cash value in the policy with a current (nonguaranteed) interest rate and backs
the cash value with a lower guaranteed (contract) rate of interest.
If an insured requires an application in order to reinstate a policy, and if the insured requests
reinstatement in writing, an application must be delivered to the insured within
a) 7 days
, b) 10 days
c) 15 days
d) 30 days - ✔✔b) 30 days
If, in order to renew or reinstate a life insurance or annuity policy, an insurer must first receive an
application, the insurer must supply this application to the insured within 30 days, upon the insured's
request.
Which of the following insurers are owned by stockholders who have the usual rights of ownership,
including the right of voting?
a) Reciprocal
b) Fraternal
c) Stock
d) Mutual - ✔✔c) Stock
Only stock insurance companies are owned and controlled by stockholders.
When an employee terminates coverage under a group insurance policy, coverage continues in force
a) Until the employee can obtain coverage under a new group plan.
b) Until the employee notifies the group insurance provider that coverage conversion policy is issued.
c) For 31 days.
d) For 60 days. - ✔✔c) For 31 days.
An employee has 31 days under the conversion privilege to convert to an individual policy.
Which of the following is the closest term to an "authorized" insurer?
a) Certified
