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10 Cards in this Set
- Front
- Back
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1. Which is the proper term for a company owned
by its policyowners? A stock A. insurance company B. A mutual insurance company C. A legal insurance company D. A fraternal insurance company |
B
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2. A certi"cate of insurance
A. is issued to the employer to list which employees are covered by the group plan B. is issued to each individual covered by the group life insurance C. contains all policy information except the amount of protection and the bene"ciary D. is not considered valid proof of coverage |
B
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3. Al purchases an estate builder (jumping
juvenile) policy for his 5-year-old son, Donald. When Donald reaches age 21, his father presents him with the policy as a gift. Which of the following statements is NOT correct? A. Donald does not have to continue to make the premium payments to keep the policy in force. B. The premium will continue to be based on Donald’s original age of 5. C. Donald has enjoyed protection against the problems of premature death. D. The face value of Donald’s policy has increased by 5 times. |
A
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4. Mortality "gures are normally developed by
studying and interpreting statistics A. from small groups of people over 10-year periods B. developed from the deaths of millions of persons over long periods C. gathered by interviewing many persons in selected cities across the nation D. obtained by surveys of insured persons |
B
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5. The money paid by the insured to the insurance
company for insurance protection is called the A. consideration B. dividend C. bene"t D. assignment |
A
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6. The difference between a customer and a
consumer under the Gramm-Leach-Bliley Act is that A. a customer is a policyholder, whereas a consumer is an applicant B. a consumer is a policyholder, whereas a customer is an applicant C. a customer has an ongoing relationship with the insurer, whereas a consumer does not D. a consumer has an ongoing relationship with the insurer, whereas a customer does not |
c
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7. An insured allows a permanent policy to lapse.
Unless otherwise instructed, the insurance company A. is entitled to keep any accumulated cash values B. may use the cash value to purchase a reduced amount of permanent insurance C. will automatically send the cash values of the policy to the policyowner D. will automatically institute the extended term option |
D
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8. Which of the following statements about the
average number of people who die each year is TRUE? A. It is called the mortality rate. B. It cannot be predicted with any accuracy. C. It cannot be used to determine insurance rates. D. It is the principal factor in risk selection. |
A
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9. Money taken out of a modi"ed endowment
contract (MEC) will result in the A. policy being voided B. is always received income-tax free C. is considered to be a return of premium D. may be subject to unfavorable tax rules |
D
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10. Ed has a $50,000 policy with cash values of
$10,000. A $2,000 loan is outstanding, as is a past-due premium of $1,000. Ed "nds he can no longer make premium payments on this policy. If Ed chooses the cash surrender value option, he will receive A. $7,000 B. $8,000 C. $9,000 D. $10,000 |
B
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