Chapter 11 Life Insurance Basics
- 1.What does “liquidity” refer to in a life insurance policy?
- A.
The insured is receiving payments each month in retirement
- B.
The policy owner receives dividend checks each year
- C.
Cash values can be borrowed at any time
- D.
The death benefit replaces the assets that would have accumulated if the insured had not died
- 2.What term refers to taxes being paid from Life Insurance proceeds, so it isn’t necessary to sell assets from an estate, to pay for them?
- A.
Estate Creation
- B.
Estate Conservation
- C.
Estate Compensation
- D.
Estate Calculation
- 3.George is terminally ill and has many unpaid Medical bills. Which of the following would benefit George?
- A.
Enter into a Viatical Settlement
- B.
Change his beneficiary designation to revocable
- C.
Buy a rider
- D.
Surrender his policy
- 4.Jane is currently insured by ABC Life insurance, and she learns she is terminally ill. Jane then agrees to sell her policy to XYZ insurance Recovery. Joe, Jane’s insurance producer, arranges the transaction between Jane and XYZ Insurance Recovery. In this scenario, Joe is:
- A.
The Life provider
- B.
The Viatical Settlement Provider
- C.
The Settlement Broker
- D.
The Life Broker
- 5.Which would be eligible to obtain SGLI?
- A.
Small employers
- B.
Military personnel
- C.
The elderly
- D.
Low income individuals and families
- 6.The duty (or duties) of a producer where replacement is involved include all of the following except:
- A.
Leaving a copy or original of all solicitation material used for presentation to the applicant
- B.
Submitting all expenses to creditors
- C.
Submitting to the replacing insurer a copy of all soliciting material
- D.
Submitting to the replacing insurer a statement signed by the applicant as to whether or not he has existing Life insurance
- 7.Life insurance premiums are determined by several factors pertaining to the insured, including age, occupation and:
- A.
Location of residence
- B.
Number of children
- C.
Avocation
- D.
Marital status
- 8.In regard to Social Security benefits, what refers to the period of time after the youngest child reaches 16 and prior to the surviving spouse reaching 60, when the Social Security benefits will not be paid?
- A.
Benefit Period
- B.
Benefit Check Period
- C.
Buy Sell Period
- D.
Blackout Period
- 9.Members of the Armed Forces can obtain _________, also called SGLI.
- A.
PPO individual health insurance
- B.
Group universal life insurance
- C.
Term group life insurance
- D.
Tax-exempt deferred annuities
- 10.What should be disclosed on an advertisement which refers to any dollar amount?
- A.
Only what is approved by the Insurance commissioner
- B.
Cost of policy benefit or loss of which the benefit is payable
- C.
Misleading statements about costs
- D.
Period of time for which any benefit is payable
- 11.An Industrial Life Insurance Policy has a face amount that is:
- A.
$3,000 or less
- B.
$1,000 or less
- C.
$2,500 or less
- D.
$5,000 or less
- 12.Which is the least expensive way to pay a premium?
- A.
Annually
- B.
Semi-annually
- C.
Quarterly
- D.
Monthly
- 13.Information concerning an applicant’s prior health is generally provided to the underwriter by:
- A.
A Medical examination
- B.
The Medical Information Bureau
- C.
The Agent’s Report
- D.
The Inspection Report
- 14.The special significance of a conditional receipt is that it:
- A.
Is given by the agent only to applicants who fully prepay all scheduled premiums in advance of policy issue
- B.
Is intended to provide coverage on a date earlier than the date of the issuance of the policy
- C.
Guarantees the applicant that a policy will be issued in the amount applied for in the application
- D.
Serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company
- 15.Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
- A.
The Key Person is the owner and the employer is the beneficiary
- B.
The employer is the owner and beneficiary
- C.
The employer is the owner and the Key Person is the beneficiary
- D.
The Key Person is the owner and beneficiary
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