Life Insurance Exam

Front 1

All other factors being equal, which premium payment mode will require an overall higher premium: monthly or annual?

Back 1

Monthly

Front 2

What is policy replacement?

Back 2

A new policy is issued while an existing policy is terminated or reissued with a reduction in cash value.

Front 3

What document describes the specific information about a policy?

Back 3

Policy Summary

Front 4

What is the purpose of the agent's report during the application process?

Back 4

The agent's report discusses the agent;s personal observation about the proposed insured that may help in the underwriting process

Front 5

What is the purpose of key person insurance?

Back 5

To minimize the risk of financial loss caused by the death of a key employee

Front 6

What type of policy is typically issued without proof of inscrutability from the insured?

Back 6

Group policy

Front 7

If someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should it be?

Back 7

Permanent

Front 8

What type of policy issues certificates of insurance to the insureds?

Back 8

Group policy

Front 9

When planning for survivor protection in life insurance, what needs to be considered?

Back 9

The insured's current assets, liabilities and survivor's needs

Front 10

A business is the owner and beneficiary of a key-person life policy. When the business collects the policy benefit, how is it taxed?

Back 10

The benefit is received tax free.

Front 11

What is included in part 2 of a life insurance application?

Back 11

Medical information about the perspective insured

Front 12

Life insurance may be used to pay state inheritance taxes and federal estate taxes elimination the need to sell assets from estate. What is this called?

Back 12

Estate conservation

Front 13

What are the three factors that determine the premium for a particular life insurance policy?

Back 13

Mortality, interest and expense

Front 14

If an insured changes his payment plan from monthly to annually, what happens to the total premium?

Back 14

It will decrease.

Front 15

Who is the beneficiary on a key-person life insurance policy?

Back 15

The employer

Front 16

When must insurable interest exist in a life insurance policy?

Back 16

At the time of application

Front 17

What type of insurance would perform the function of cash accumulation?

Back 17

Life insurance

Front 18

What does "liquidity" mean in a life insurance policy?

Back 18

Availability of cash value

Front 19

If an applicant for a life insurance policy and the potential insured are two different people, what would be the underwriters main concern?

Back 19

The existence of insurable interest between the applicant and the insured

Front 20

When must the policy summary for a life insurance policy be delivered to the policy owner?

Back 20

At the time of policy delivery

Front 21

What is the term that describes the frequency and the amount of the premium payment?

Back 21

Premium mode

Front 22

What is the main purpose of the regulation on life insurance policy illustrations?

Back 22

To help the public make educated decisions about buying life insurance.

Front 23

Who must have insurable interest in the insured?

Back 23

The policy owner

Front 24

How does the premium mode affect the total premium paid for insurance for the year?

Back 24

Higher frequency of premium payments will result in higher overall premium

Front 25

What document must a producer provide to the insured during policy replacement?

Back 25

Notice regarding replacement

Front 26

In calculation the amount of life insurance needed, what is the needs approach based on?

Back 26

The predicted needs of a family after the premature death of the insured

Front 27

Who is a replacing insurer?

Back 27

The company that issues a new policy during policy replacement

Front 28

What are the personal uses of life insurance?

Back 28

Survivor protection, estate creation and conservation, cash accumulation and liquidity

Front 29

What type of life insurance offers an applicant a cash value element?

Back 29

Permanent insurance (usually, whole life)

Front 30

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

Back 30

Variable

Front 31

What type of insurance creates an immediate estate?

Back 31

Life insurance

Front 32

What term describes the fee a person pays an insurance company to receive coverage?

Back 32

Premium

Front 33

Who is responsible for the contents of insurance advertisements?

Back 33

The insurance company

Front 34

What are illustrations in a life insurance policy?

Back 34

Presentations of nonguaranteed elements of the policy

Front 35

What is a blackout period for social security benefits?

Back 35

A period of time during which the surviving spouse does not receive benefits

Front 36

Mortality tables are used by insurance companies to predict what?

Back 36

Life expectancy and the death rates for specific groups of individuals

Front 37

What is the main responsibility of a company's underwriting unit?

Back 37

Risk selection

Front 38

At what point does coverage begin when an agent issues a conditional receipt for a life insurance policy?

Back 38

Either on the date of application of the date of the medical exam (whichever occurs last)

Front 39

What is insurance underwriting?

Back 39

The process of risk selection and classification

Front 40

What are the three main instances when insurable interest exists in life insurance?

Back 40

Insuring your own life, the life of a family member, or the life of a business partners or someone who has a financial obligation to the policyowner