Guaranteed Insurability rider Family term insurance rider Family whole insurance rider Payor benefit rider, A partial surrender is allowed in which of the following life policies? The policy may be paid up early by using accumulated cash values The policy may be paid up early by using policy dividends The policy's premiums will increase after 20 years The policy's cash values steadily decrease after 20 years, the policy would be payable, minus the premium amount, If an insured dies during the grace period with no premiums paid the policy would be payable, minus the premium amount the policy would be payable only after the beneficiary makes past due premium payment all past premiums will be refunded with interest the claim would be denied, In what part of an insurance policy are policy benefits found? Loan against the cash value Policy withdrawal Policy dividend Death benefit, A business will typically use which type of life insurance to cover their employees? Advertisement. Which type of multiple protection policy pays on the death of the last person? Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies? there must be an offer and acceptance B) A contract that has the potential for the unequal exchange of consideration for both parties Only the insurance company has legal obligations. Before using an assumed name in Utah, a producer MUST, Maria would like an annuity that provides a guaranteed accumulation or payout. Assume that the product will be tested on 202020 randomly selected stained garments, and let xxx denote the number of these garments from which the stains will be completely removed. Waiver of premium Juvenile waiver Guaranteed insurability Payor benefit, Which of the following is a reinstatement condition? a) a conditional acceptance allows the parties to negotiate the definite terms of the contract upon the completion of the contract. What does the word level in Level Term describe? Which of these factors is NOT taken into account when determining an applicants life insurance needs? The annuitants life expectancy determines the annuity payments, No one may be denied coverage by an insurance company due to, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n). After being properly appointed by the insurer. Active Status Results Leave, A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n) automatic premium loan nonforfeiture option collateral assignment irrevocable assignment, Period of time after the premium is due but the policy remains in force, What is an insurance policy's grace period? Countersignature, Which of the following is an example of the insured's consideration? Because insurance premiums are tax-deductible Because dividends are already subject to capital gains Because dividends are payable directly to the policyholder Because dividends are considered to be a return of premium, A type of insurer that is owned by its policyowners is called domestic mutual stock in-house, What is considered to be the primary reason for buying life insurance? b) a contract is an agreement enforceable at law. A) A contract that requires certain conditions or acts by the insured individual D) only one party makes any kind of enforceable promise, C) the terms must be accepted or rejected in full, What is implied authority defined as? Dependent term Guaranteed insurability Primary term Family term, Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested? Which of these statements regarding the annuitant is CORRECT? Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? How does life insurance create an immediate estate? Offering payment of approved claims within 30 days after affirming liability. Which of the following are the premium payments for a universal life policy NOT used for? C) Materiality of concealment Insurer's promise to pay benefits A paid premium Legal purpose Intent, Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties, What is implied authority defined as? D) purpose, Which principle is accurately described with the statement "Insureds are entitled to recover an amount NOT greater than the amount of their loss"? She would like to borrow $15,000 against the cash value. Naming a contingent beneficiary as all surviving children is described as which term? Insurer's promise to pay benefits What was his total bill? $2,406 B) acceptance Which of the following is CORRECT regarding the death benefit amount? A) A contract that requires certain conditions or acts by the insured individual A policy containing exclusions or limits that are not clearly disclosed to the policyholder, or a premium that is significantly higher than the risk covered, could be considered unfair or one-sided. D) Legal Purpose, Which of the following is present when an applicant stands to lose value if the insured dies? B) Consideration d) an agreement requires a definite offer and an indefinite acceptance. D) Business owner and business client, Under a contract of adhesion, Andy the annuitant dies before the annuity start date. the policy provides a straight, level $100,000 of coverage for 5 years. Updated 10/6/2017 9:10:03 AM. Risk Hazard Indemnity Peril, Insurance companies determine risk exposure by which of the following? C) consideration offer C) aleatory B) issuance of the policy A Modified Endowment Contract (MEC) is best described as A life insurance contract which accumulates cash values higher than the IRS will allow An annuity contract which was converted from a life insurance contract A modified life contract which enjoys all the tax advantages of whole life insurance A life insurance contract where all withdrawals only one party makes any kind of enforceable promise, the terms must be accepted or rejected in full, Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium". Ken is a producer who has obtained Consumer Informations Reports under false pretenses. Under a life insurance policy, what does the insuring clause state? B) A paid premium Consideration A) Insurable interest the terms must be accepted or rejected in full The insurers obligation to pay a death benefit upon an approved death claim. Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. ______ is NOT an element of a valid contract. Nothing $100,000 $250,000 $500,000, Which type of life insurance is normally associated with a Payor Benefit rider? The death benefit would be $250,000 $750,000 $375,000 $500,000, What does the word "level" in Level Term describe? B) only one party (the insurer) makes any kind of legally enforceable promise Barry offers Chris his mountain cabin for the weekend to secure his order for his insurance business. Events are those which cannot be controlled by either . collateral, What is implied authority defined as? What Benefit Does The Payor Clause On A Juvenile Life Policy Provide? c. income earned by Pat's spouse. Reduction of premium dividend option Extended term option Paid-up option Cash dividend option, Net death benefit will be reduced if the loan is not repaid, Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. Consideration clause B) premium only C) A contract where one party adheres to the terms of the contract A policyowner is prohibited from making any changes to the policy without the beneficiarys written consent under which beneficiary designation? insurer Which of the following would be a valid reason why a policy premium would be higher than the standard premium? $1,000 $3,000 $5,000 $7,000, A nonparticipating company is sometimes called a(n) alien insurer mutual insurer reinsurer stock insurer, Because dividends are considered to be a return of premium, Why are dividends from a mutual insurer not subject to taxation? Connect with others, with spontaneous photos and videos, and random live-streaming. Variable life insurance and Universal life insurance are very similar. An insurance contract usually involves an exchange of consideration between both parties: the insurer agrees to provide coverage and pay claims in the event of a loss, and the policyholder agrees to pay premiums in return. The present cash value of the policy equals $250,000. A) Parties involved in the contract C) Charge more premium C) Competent parties Authority given to handle claims and process payments The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. What is the difference between insurance condition and warranty? Insurable interest can be based on the love and affection of individuals related by blood or law An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of A contract that requires certain conditions or acts by the insured individual A contract that has the potential for the unequal exchange of consideration for both parties A contract where one party "adheres" to the terms of the contract A contract where only one party makes any kind of enforceable contract, statements made in the application and the premium, In a life or health insurance contract, "consideration" would be the offer and acceptance premium only statements made in the application and the premium statements made in the application only, According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's underwriting issuance of the policy promises made legal reserve, All of the following are elements of an insurance policy EXCEPT definitions other insurance claim forms conditions, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as Apparent Estoppel Aleatory Unilateral, Which of the following is an example of the insured's consideration? Key elements of Organizational Behavior - People, Structure ,Technology & External Environment | Organizational Behavior, Penology - Meaning, Types, Importance, Scope and Example | Sociology, Karmachari Sanchaya Kosh - | Employees Provident Fund Nepal, Perceptual Errors -Types of Perceptual Error | Fundamentals of Organizational Behaviour, Difference between Manufacturing and Service Operations | Operation Management. B. Sorry, you have Javascript Disabled! A life insurance policy that is subject to a contract interest rate is referred to as. If the consumer price index had gone up 4%, how much may Ron increase the face value of the policy? A fixed cash value A flexible premium schedule A fixed death benefit The ability to take out a policy loan, The least expensive option to pay off a 30-year mortgage balance would be convertible term life decreasing term life adjustable term life increasing term life, Pre-death distributions are typically taxable, Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test? All of the following statements about Carl's coverage are correct. Of the following dividend options, which of these is taxable? 30 seconds. The face amount and premium will remain constant over the 10-year period. D) collateral, Express power given to an agent in an agency agreement is It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. In this situation, who will receive Bob's policy proceeds? C) Authority given to handle claims and process payments What kind of policy is this? The automatic premium loan provision authorized an insurer to withdraw from a policys cash value the amount of, Past due premiums that have not been paid by the end of the grace period. performance is conditioned upon a future occurrence. The provision that allows this is called Partial Surrender Subrogation Automatic Premium Loan Accelerated Death Benefit, All of these are characteristics of a universal life insurance policy EXCEPT Flexible death benefit Fixed surrender value Flexible premiums Builds cash value, Which of the following policies does NOT build cash value? Death benefits Cash value Loading costs Separate account investments, Which policy feature makes a universal life policy different from a whole life policy? When initial premium is collected and policy is issued. issuance of the policy C) fiduciary trust The terms and conditions of insurance contracts should be carefully reviewed by policyholders before signing. An insurance contract usually involves an exchange of consideration between both parties: the insurer agrees to provide coverage and pay claims in the event of a loss, and the policyholder agrees to pay premiums in return. A) One party is restored to the same financial position the party was in before the loss occurred. b. benefits paid under workers compensation. D) Utmost good faith, What does the insurance term "indemnity" refer to? Accelerated death benefit An example of an unfair claims practice would be A) definitions Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. ______ is NOT an element of a valid contract. Both partners are still married at the time of Bob's death. The death benefit would be. C) adhesion nonparticipating life insurance policy participating life insurance policy divisible surplus life insurance policy straight life insurance policy, Which of the following is considered to be an event or condition that increases the probability of an insured's loss? GENERAL LAW OF CONTRACTS A contract is an agreement enforceable by law. In exchange, the policyowner pays premiums. Your email address will not be published. renewal reinstatement resumption renovation, the MEC tends to be an investment vehicle, Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because the MEC has tax deductible premiums the MEC is considered an illegal product the MEC tends to be an investment vehicle the MEC does not accumulate cash value, The face amount and premium will remain constant over the 10-year period, Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Policy loans are disallowed The premium payments will be tax deductible Pre-death distributions are typically taxable Withdrawals will be prohibited, When a whole life policy is surrendered, income taxes may be owed, All of these statements concerning whole life insurance are false EXCEPT Policyowner can take out a policy loan up to the face amount When a whole life policy is surrendered, income taxes may be owed Coverage is normally temporary The death benefit is not affected by outstanding loans, A life insurance policy which contains cash values that vary according to its investment performance of stocks is called Increasing Term Life Modified Whole Life Variable Whole Life Adjustable Whole Life, Which of these riders will pay a death benefit if the insured's spouse dies? A new stain removal product claims to completely remove the stains on 909090 percent of all stained garments. A) Competent parties C) Indemnity contract The above question Which of the following BEST describes a conditional insurance contract?, Was part of Insurance MCQs & Answers. A) Sue the insured If Mike dies first, the policy proceeds will no longer provide insurance protection will go to Mike's estate will be divided by probate will not be paid until the last brother dies, The gap between the total death benefit and the policy's cash value, What is a corridor in relation to a Universal Life insurance policy? A) fiduciary bond aleatory Rob recently died at age 60. After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. What is this an example of? __________. D) errors and oversights, In an insurance contract, the insurer is the only party legally obligated to perform. A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification? If thats the case, you dont have to worry anymore. However, corporations also can raise money by selling bonds or issuing additional shares of stock. Julie has a $100,000 30-year mortgage on her new home. Which of the following statements is true? C) Insurance carriers His insurance agent told him the policy would be paid up if he reached age 100. (D) Only one party is legally bound to the contract. A) Insurability C) claim forms A) Only the insured pays the premium An example of an unfair claims practice would be, Failing to effectuate prompt, fair, and fair equitable settlements of a claim. Typically, bilateral contracts involve an equal obligation or. C.$2,113 A provision that allows a policyowner to withdraw a policys cash value interest free is a(n), The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT, All of these are valid options for an Adjustable Life Policy EXCEPT, The policys premium can be increased or decreased, An insurers claim settlement practices are regulated by the.
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