Both endowment and term life policies provide that

. Insurance protection will be limited to a specified period

. No cash value is available to the policy owner during the term of the policy

Renewal and conversion privileges are available

. A benefit will be paid at the end of the period of coverage if the person is then alive

indicate which of the following is not a function of an application for life insurance policy.

To give details pertaining to non-forfeiture options

To furnish information on which the contract of life insurance may be written

to furnish initial information as to insurability

To convey to the company the desire of the applicant to obtain insurance

a father has his present life insurance payable to his estate and because he has now retired he wants to pass the policy on to his son who will assume the premium payments. which of the following will he have to appoint his son to achieve his desire and protect the son from estate Tax Liability?

Irrevocable primary beneficiary

Irrevocable secondary beneficiary

A policy where an irrevocable beneficiary has been designated the insured the insured, without the beneficiary's permission, can

Avail of a non-forfeiture option

Alter the dividend option now in effect

What are the basic settlement options?

Fixed amount, fixed period, life income, interest on deposit

Policy loan, guaranteed insurability

Cash surrender value, automatic premium loan

Double indemnity, total of permanent disability waiver

An insurance company generally has the right to rescind a life insurance policy if

Company discovers at any time that the policy owner was actually a minor at the time of application

Insured person intentionally kills himself during the exclusion period specified in the policy

Insured person is killed in military action during the contestable period of the policy

Company discovers during the contestable period that the application contains a material statement.

which of the following is the least important reason for requiring that insurance agents be licensed?

to provide additional income to the goverment through license fees

To establish and maintain high professional and ethical standards

to give the goverment adequate control over the conduct of agents

in the event that a policy owner elects the paid-up insurance options

the premiums cease and protection continues with a reduce amount of coverage

the premium stop and the policy continues for the full face amount until age 65

the insurance continues at a reduced amount and with a reduced premium

the policy will automatically terminate

the company will allow a policy change from a higher premium to a lower premium provided the insured

presents satisfactory evidence of insurability

momentarily assigns the policy to the company

obtains written consent from his or her spouse

which of the following statements about "disability waiver of premium rider" is false?

the insured has to die while disabled

disability must occur before a stated date

it has to be attached to a life insurance policy

in most life insurance applications, the largest amount of information requested is data which _______

relates insurability of the applicant

describes the type of insurance applied for

describes the desired benefits and mode of payment

don't affect the loan or cash value of the policy

affect both cash and loan value of the policy

don't affect the cash value of the policy

only affect the cash value of the policy

the total life coverage of a permanent basic policy can be greatly increased through the use of

an accidental death benefit rider

life insurance companies make use if the laws of probability in order to

estimate future death rates among members of a given group

predict when an individual insured will die

develop statistics of past deaths among the general population

determine the experienced death rate among the insured persons

in the case of renewable term insurance, the policy owner may

renew the coverage based on a higher premium

change the life insured at renewal date

renew providing the insurance company agrees to continue coverage

renew at the same premium for further period of years

a man applied for a p's 20 000, whole life policy and paid the full initial premium soliciting agent. the agent issued a binding receipt. under such a receipt, the insurance company

immediately provides interim insurance that remains in effect it until the policy is issued or the application is declined

offers permanent insurance coverage effective as of the date the application

promises that the insurance coverage will become effective as of the date the application is approved

guarantees the policy will be issued as applied for

endowment life insurance and term life insurance are similar in that both plans

provide life insurance protection for only the period of time specified in the policy contract

build up cash value rapidly in the early policy years

provide for payment of the face amount if the insured is alive at the end of the specified period

contain provisions for automatic continuation of the insurance protection at the end of a specified period

the extent of medical evidences required is determined by

the age of the applicant and the proposed sum to be insured

financial condition of the applicant

date of the last medical examination

the conservation of a life insurance policy is dependent on all the following except

the level of first year commission

agent's service oriented attitude

the use of effective needs selling

all of the ff are sources of information to an insurance company pertaining to the insurability of an applicant except

the applicant's personal appearance

if the applicant for life insurance fails to disclose or misrepresents material fact, the contract is___

valid unless the insurer can prove fraud

valid if the insurer issues a policy which is delivered to the applicant

voidable by the insurer if it has been in force less than 2 years

the settlement options provisions may provide all of the following except

proceeds held by the company, with interest payable to the beneficiary on request

payment of the proceeds for the life of the insured

payment of the proceeds over a fixed period

payments of the proceeds in fixed amounts until exhausted

non-forfeiture provisions are included in whole life and endowment policies to assure the policy owner that certain minimum policy benefits shall remain with him even under certain changed conditions. non-forfeiture values guarantee to the policy owner that

the premium on the policy will remain the same even when another beneficiary is added to the policy

no death claim will be denied for any misstatement on the application

any guaranteed policy values will belong to the owner even if premium payments are discounted

the amount of the policy will remain the same even if the insured's health becomes impaired

purchasing a continuous-premium, whole life policy rather than a limited payments, whole life policy gives the policy owner the advantage of

more insurance protection for the same annual premiums outlay

concentration of premium payments during the period of highest earnings

liberal risk selection procedures

more paid rapid accumulation of cash values

in certain situations a company may file interpleader actions with a court of law. this remedy is use to

decide conflicting claims on the same insurance proceeds

determine if the cause of the insured's death was an excluded risk

resolve the questions of insurable interest

recommend the best settlement options for the beneficiary. if the interest on a policy loan is not paid at the policy anniversary the insurance

which of the following statement is false?

because of its very short duration the cash value of a yearly renewable term policy grows fast

the cash value of a whole life policy builds up at a slower rate than a 20 year endowment

the cash value in a permanent policy is guaranteed by the company

the cash value of an endowment builds up faster than that for a limited pay life policy of the same duration

which of the following does not have a legitimate insurable interest ?

an individual on the life of his mistress

an individual on the life of his spouse

a finance company on the life of its borrower

which of the following statements regarding insurance premiums is false?

cash is required for all premiums paid in the grace period

a premium is the legal consideration needed to affectuate a life insurance policy

the grace period is usually 31 days

premiums which are paid quarterly or semi-annually are higher than those paid annually

a non-forfeiture option would ordinarily be selected at the time of the policy owner

discontinues premium payment for whole life or endowment policy

converts a term policy to a whole life policy

choose a mode settlement for the life proceeds

if the interest on a policy loan is not paid at the policy anniversary the insurance company may___

increase the present loan by the interest

demand a full settlement of the loan

refuse to grant future additional loan

the contestability clause

prevents the company from denying a claim after the policy has been in force for 2 years

gives the company the right to rescind a policy at any time

permits the company to pay claims within 2 years

makes it necessary for the beneficiary to present proof of death in the event of a death claim

the insured named a primary and secondary revocable beneficiary for P's 20 000 policy, which of the ff is correct

the insured can add a third beneficiary at any time

the designation of a contingent beneficiary is subject to the primary beneficiary's approval

any policy loan assignment will require the primary beneficiary's signature

upon the insured's death the primary and secondary beneficiaries shall each receive P's 10,000

when you bought an insurance policy on your wife's life, you were 27 and she was 26, but you stated that you were 26 and she was 27. five years later your wife died. the insurer will pay

the face amount adjusted for misstatement of age

slightly less than the face amount

if the interest on a policy loan is not paid at the policy anniversary the insurance company may

increase the present loan by the interest

refuse to grant future additional loan

demand full settlement of the loan

a yearly renewable term life insurance policy generally specifies that

premiums shall increase every time the policy is renewed

the policyowner may renew the policy only once

evidence of insurability shall be required every renewal

cash values will increase for as long as the policy is in force

the ff statements concerning insurable interest are correct except?

it is important for purposes of underwriting the risk

everyone has an insurable interest in his own life

it is deemed to exist by virtue of a relationship by blood or marriage

is it deemed to exist of economic loss would occur at the death of the insured

PRUIN2

Authored by Jc Reef

Other

Professional Development

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61 questions

Show all answers

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

in a case where the premium has not been paid and the cash values has been exhausted, the policy can still avail of the grace period.

TRUE

FALSE

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

According to the law of large numbers, events which happens seemingly by chance will actually be bound to follow a predictable pattern, if enough such happenings are observed.

TRUE

FALSE

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

anti-selection occurs when persons with poor health wish to buy insurance

TRUE

FALSE

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

a policy is still in force for the full face amount and will remain in force for a further period four years and 118 days, without the payment of any premium, has availed of paid insurance option.

TRUE

FALSE

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

in the case of misstatement of age, the amount of insurance is adjusted to the amount which the premium is paid at the correct age would have purchased

TRUE

FALSE

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

A policy the provides guaranteed cash values plus extra annual distributions and pays the insured after a specified time is known as a participating endowment

TRUE

FALSE

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

in a group insurance it is assumed that every member of the group is insurable, provided that every member of the group is working minimum number of (usually 50 hours) each week.

true

false

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PRUIN2

in a case where the premium has not been paid and the cash values has been exhausted, the policy can still avail of the grace period.

According to the law of large numbers, events which happens seemingly by chance will actually be bound to follow a predictable pattern, if enough such happenings are observed.

anti-selection occurs when persons with poor health wish to buy insurance

a policy is still in force for the full face amount and will remain in force for a further period four years and 118 days, without the payment of any premium, has availed of paid insurance option.

in the case of misstatement of age, the amount of insurance is adjusted to the amount which the premium is paid at the correct age would have purchased

A policy the provides guaranteed cash values plus extra annual distributions and pays the insured after a specified time is known as a participating endowment

in a group insurance it is assumed that every member of the group is insurable, provided that every member of the group is working minimum number of (usually 50 hours) each week.

An endowment at age 65 policy with premium payable for a limited period of 20 years pays the full amount after 20 years.

In most life insurance applications, the largest amount of information requested is data which identifies the applicant.

A policy is not rendered void by reason by misstatement of the assured's death.

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