New York Life Insurance

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  • 1/136 Questions

    A _______________ is an agreement between two or more parties enforceable by law.

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About This Quiz

Life insurance is the provision of cover by an insurance company to compensate you on occurrences of life risks. New York Life Insurance is a lengthy quiz on the subject. All the best as you test and advance your knowledge.

Life Insurance Quizzes & Trivia

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  • 2. 

    A legal representative of an insurance company 

    Explanation
    The correct answer is "Producer, Agent." In the insurance industry, a legal representative of an insurance company can be referred to as both a producer and an agent. These terms are often used interchangeably to describe individuals who sell insurance policies on behalf of the insurance company. They are responsible for understanding the insurance products, advising clients on suitable coverage options, and facilitating the purchase of insurance policies.

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  • 3. 

    The causes of loss insured against in an insurance company are called perils.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The statement is true because perils refer to the specific events or circumstances that can cause damage or loss to the insured property. These perils can include natural disasters like fires, floods, or earthquakes, as well as man-made events such as theft or vandalism. Insurance companies provide coverage against these perils, which means they will compensate the policyholder for any losses incurred due to these specified risks. Therefore, the causes of loss insured against in an insurance company are indeed called perils.

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  • 4. 

    What is the primary purpose of a 401(K) plan?

    • Accumulation of retirement income

    • Accumulation of education funds

    • Distribution of life insurance proceeds

    • Distribution of dividends

    Correct Answer
    A. Accumulation of retirement income
    Explanation
    A 401(K) plan is a retirement savings plan offered by employers to help employees accumulate funds for their retirement. It allows individuals to contribute a portion of their salary to the plan on a pre-tax basis, meaning the contributions are not subject to income tax at the time they are made. The primary purpose of a 401(K) plan is to accumulate retirement income over time, which can then be withdrawn during retirement to provide financial support. Therefore, the correct answer is "Accumulation of retirement income."

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  • 5. 

    Insurance policies usually include coverage for loss caused by war or nuclear events.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    excludes coverage.

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  • 6. 

    An ____________ insurer is an insurance company that is incorporated outside of the United States.

    Correct Answer
    alien
    Explanation
    An alien insurer is an insurance company that is incorporated outside of the United States. This means that the company is based in a foreign country and operates under the laws and regulations of that country. Alien insurers may provide coverage for individuals or businesses in the United States, but they are subject to different regulatory requirements compared to domestic insurers. It is important for individuals and businesses to understand the differences between domestic and alien insurers when purchasing insurance policies.

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  • 7. 

    A contract of adhesion is prepared by one of the parties (insurer) and accepted or rejected by the other party (insured). Insurance contract is offer on a take-it or leave-it basis by an insurer.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The statement is true because a contract of adhesion is a type of contract where one party (in this case, the insurer) prepares the contract and the other party (the insured) has the option to either accept or reject it. In this situation, the insurance contract is offered on a take-it or leave-it basis, meaning the insured does not have the ability to negotiate or make changes to the terms of the contract.

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  • 8. 

    The _______________ states that the larger the number of people with a similar exposure to loss, the more predictable actual losses will be. This law forms the basis for statistical prediction of loss upon which insurance rates are calculated.

    • Law of insurance

    • Law of large numbers

    • Law of whole life

    • Law of pure risk

    Correct Answer
    A. Law of large numbers
    Explanation
    The Law of Large Numbers states that the larger the number of people with a similar exposure to loss, the more predictable actual losses will be. This means that as the number of people in a risk pool increases, the average loss experienced by the group becomes more accurate and stable. Insurance companies rely on this law to calculate insurance rates, as it allows them to estimate the likelihood and cost of potential losses based on statistical data from a large population.

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  • 9. 

    Insurance contracts are aleatory, which means there is an exchange of unequal amounts or values.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Insurance contracts are considered aleatory because there is an exchange of unequal amounts or values between the insured and the insurer. This means that the insured pays a premium to the insurer, which is typically a smaller amount compared to the potential benefits or coverage that the insured may receive in the event of a covered loss or claim. The amount of the potential benefits is uncertain and dependent on the occurrence of a specific event, such as an accident or damage. Therefore, the exchange of values in insurance contracts is not equal, making the statement "Insurance contracts are aleatory" true.

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  • 10. 

    _____________ is the person covered by the insurance company.

    Correct Answer
    Insured
    insured
    Explanation
    The term "insured" refers to the person who is protected or covered by an insurance company. This individual has purchased an insurance policy and is entitled to receive benefits or compensation in the event of a covered loss or damage. The term "insured" can be used in both uppercase and lowercase letters, and it is commonly used in insurance contracts and policies to identify the person for whom the coverage is provided.

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  • 11. 

    The time period during which an annuitant contributes to an annuity is called

    • The annuity appreciation

    • The accumulation period

    • The deferred growth

    • The savings period

    Correct Answer
    A. The accumulation period
    Explanation
    The correct answer is the accumulation period. This refers to the time period in which an annuitant contributes to an annuity. During this period, the annuity grows through regular contributions and potential investment gains. At the end of the accumulation period, the annuitant can start receiving regular payments from the annuity.

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  • 12. 

    Insurance provide a means to transfer loss.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Insurance provides a means to transfer loss by allowing individuals or businesses to transfer the financial risk of potential losses to an insurance company. In exchange for paying a premium, the insurance company agrees to bear the financial burden of certain types of losses, such as property damage, medical expenses, or liability claims. This transfer of risk helps protect individuals and businesses from significant financial hardship in the event of an unexpected loss. Therefore, the statement "Insurance provides a means to transfer loss" is true.

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  • 13. 

    A ______________ insurer is an insurance company that is incorporated in this state.

    • Foreign

    • Alien

    • Domestic

    • All above

    Correct Answer
    A. Domestic
    Explanation
    A domestic insurer is an insurance company that is incorporated in the state in question. This means that the company is based and operates within the state, as opposed to being based in another state or country. Therefore, it is the correct answer because it accurately describes an insurance company that is incorporated within the state.

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  • 14. 

    A contract without a legal purpose is considered _____________, and cannot be enforced by any party.

    Correct Answer
    void
    Explanation
    A contract without a legal purpose is considered void, meaning it is invalid and cannot be enforced by any party. This means that the contract lacks the necessary legal elements or is against public policy. Without a legal purpose, the contract does not have any legal effect and cannot be legally binding.

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  • 15. 

    _________________ companies are own by the policyowners and issue participating policies.

    • Marketing

    • Life

    • Mutual

    • Lloyds

    Correct Answer
    A. Mutual
    Explanation
    Mutual companies are owned by the policyowners and issue participating policies. This means that policyholders have a say in the company's decisions and can receive dividends or other forms of profit sharing. Mutual companies operate on a cooperative basis, with the goal of providing benefits to their policyholders rather than maximizing profits for shareholders. Therefore, it is logical to conclude that mutual companies issue participating policies, as these policies allow policyholders to share in the company's profits.

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  • 16. 

    Fraternal association sell only to their members and are considered charitable institutions, they are not subject to all of the regulations that apply to the insurers that offer coverage to the public at large.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Fraternity says we will give only our members insurance.

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  • 17. 

    Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?

    • Whole life policy

    • Ordinary life policy

    • Joint life policy

    • Individual endowment policies

    Correct Answer
    A. Joint life policy
    Explanation
    A joint life policy would be the most affordable option for the twin brothers starting a new business. This type of policy covers both individuals under a single policy, meaning that the premium cost is shared between them. If one of the brothers were to die, the policy would provide a death benefit to the surviving brother. This ensures that the business can still continue and the debt can be paid off even in the event of one brother's death.

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  • 18. 

    ________ is the uncertainty or chance of a loss occurring.

    Correct Answer
    Risk
    risk
    Explanation
    The term "risk" refers to the uncertainty or probability of a loss happening. It can be used to describe the potential for negative outcomes or harm in various situations. In this context, "risk" and "risk" both represent the correct answer to the question, as they both accurately define the concept of uncertainty or chance of a loss occurring.

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  • 19. 

    Which of the following statements regarding annuities is correct?

    • Annuities are for business use only

    • Deferred annuities pay a lump sum at retirement

    • Annuities are not suitable for retirement

    • Annuities provide income that the annuitant cannot outlive

    Correct Answer
    A. Annuities provide income that the annuitant cannot outlive
    Explanation
    Annuities provide income that the annuitant cannot outlive. An annuity is a financial product that is designed to provide a steady stream of income during retirement. It is a contract between an individual and an insurance company, where the individual makes regular payments or a lump sum payment to the insurance company, and in return, the insurance company guarantees a regular income for the rest of the individual's life. This ensures that the annuitant will continue to receive income even if they live longer than expected. Annuities are commonly used as a retirement savings vehicle to provide a reliable income source in later years.

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  • 20. 

    An example of ______________ risk is gambling.

    Correct Answer
    Speculative
    speculative
    Explanation
    Speculative risk refers to a situation where the outcome is uncertain and there is a possibility of both gain and loss. Gambling is a classic example of speculative risk because the outcome is uncertain and there is a chance of winning or losing money. In gambling, individuals willingly take on the risk of losing their money in the hopes of gaining more. Therefore, the term "speculative" accurately describes the risk associated with gambling.

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  • 21. 

    Estoppel is a legal consequence to a waiver.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Estoppel is a legal principle that prevents a person from denying or contradicting a previous statement or action they have made if it would be unfair to allow them to do so. It is often used in contract law to prevent one party from going back on a promise or representation they have made. In this context, estoppel can be seen as a consequence or result of a waiver. When a person waives their rights or claims, they may be estopped from later asserting those rights or claims if it would be unfair to the other party. Therefore, the statement that estoppel is a legal consequence to a waiver is true.

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  • 22. 

    Insurance companies are willing to accept _________ risk.

    Correct Answer
    Pure
    Explanation
    Insurance companies are willing to accept pure risk. Pure risk refers to the type of risk that involves only the possibility of loss or no loss at all, with no potential for gain. This is the type of risk that insurance companies are designed to cover. By accepting pure risk, insurance companies provide coverage and protection to individuals or businesses against potential losses, such as damage to property, accidents, or illness. Accepting pure risk allows insurance companies to offer policies and collect premiums, thereby spreading the risk among a larger pool of policyholders.

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  • 23. 

    In general, an insurance contract is a public contract because it is between you and everyone in the insurance company.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    it is a personal contract because it is between the insurance company and an individual.

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  • 24. 

    When an annuity is written, whose life expectancy is taken into consideration?

    • Owner

    • Annuitant

    • Beneficiary

    • Life expectancy is not a fact in annuities

    Correct Answer
    A. Annuitant
    Explanation
    In an annuity, the life expectancy of the annuitant is taken into consideration. The annuitant is the person whose life the annuity is based on, and their life expectancy helps determine the payout amount and duration of the annuity. The annuitant is usually the person who will receive the annuity payments, but it is possible for someone else to be named as the annuitant. Therefore, the correct answer is "Annuitant".

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  • 25. 

    Under a defined benefit retirement plan, who determines what benefits a retired employee will receive?

    • Beneficiary

    • Federal government

    • Employer

    • Employee

    Correct Answer
    A. Employer
    Explanation
    Under a defined benefit retirement plan, the employer determines what benefits a retired employee will receive. This type of plan guarantees a specific benefit amount based on factors such as years of service and salary history. The employer is responsible for funding and managing the plan, including determining the formula used to calculate benefits and making contributions to ensure there are sufficient funds to pay the promised benefits to retired employees.

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  • 26. 

    When may an insurance company use suicide as a defense against paying a death benefit? 

    • Only when there was a witness to the event

    • At any time suicide can be proven

    • At no time

    • When death occurs within a specified period of time after the policy was issued

    Correct Answer
    A. When death occurs within a specified period of time after the policy was issued
    Explanation
    An insurance company may use suicide as a defense against paying a death benefit when death occurs within a specified period of time after the policy was issued. This is because many insurance policies have a suicide clause that states that if the insured commits suicide within a certain timeframe, typically within the first two years of the policy, the death benefit will not be paid. This clause is included to prevent individuals from purchasing a policy with the intention of committing suicide shortly after, in order for their beneficiaries to receive the payout.

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  • 27. 

    The automatic premium loan provision is activated at the end of the

    • Grace period

    • Time period

    • Ending period

    • Policy period

    Correct Answer
    A. Grace period
    Explanation
    The automatic premium loan provision is activated at the end of the grace period. The grace period is a specified period of time after the premium due date during which the policyholder can make a late payment without any penalty or loss of coverage. If the policyholder fails to make the payment within the grace period, the automatic premium loan provision allows the insurance company to automatically borrow the premium amount from the policy's cash value to keep the policy in force. This ensures that the policy remains active even if the premium payment is missed.

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  • 28. 

    A __________________ insurer is an insurance company that is incorporated in another state or territorial possession.

    • Foreign

    • Alien

    • Domestic

    • A and B

    Correct Answer
    A. Foreign
    Explanation
    A foreign insurer refers to an insurance company that is incorporated in a state or territorial possession other than the one in which it is operating. This means that the company is based outside of the state or territory where it conducts its business. In contrast, a domestic insurer is incorporated in the same state or territory where it operates. Therefore, the correct answer is "Foreign."

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  • 29. 

    Retirement plans can be broadly divided into which of the following categories?

    • Fixed and variable

    • Whole and term

    • Qualified and nonqualified

    • Independent and funded

    Correct Answer
    A. Qualified and nonqualified
    Explanation
    Retirement plans can be broadly divided into qualified and nonqualified categories. Qualified plans are established by employers and meet specific requirements set by the Internal Revenue Service (IRS). These plans offer tax advantages to both employers and employees and include options like 401(k) plans and pension plans. Nonqualified plans, on the other hand, do not meet the IRS requirements and are typically offered to select executives or highly compensated employees. These plans do not offer the same tax advantages as qualified plans but may provide additional flexibility and benefits.

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  • 30. 

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

    • Limiting business written by new agents

    • Selecting markets for the agents

    • Risk selection

    • Making sure policyholder receives appropriate coverage

    Correct Answer
    A. Risk selection
    Explanation
    The main responsibility of the company's underwriting unit is risk selection. This means that they are responsible for evaluating and assessing the level of risk associated with potential policyholders. They analyze various factors such as the applicant's age, health, occupation, and past claims history to determine the likelihood of a claim being made. Based on this evaluation, they decide whether to accept or reject the application, and if accepted, they also determine the appropriate coverage and premium amount.

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  • 31. 

    J purchased a $100,000 Joint life policy that covered his life and the life of his wife. Eight years later, he died in an automobile accident. How much will the wife receive from the policy?

    • $100,000

    • $200,000

    • Nothing

    • $50,000

    Correct Answer
    A. $100,000
    Explanation
    The wife will receive $100,000 from the policy. Since it is a joint life policy, it covers both J's life and his wife's life. In the event of J's death, the policy will pay out the full coverage amount, which is $100,000.

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  • 32. 

    During partial withdrawal from a universal life policy, which portion will be taxed?

    • Loan

    • Interest

    • Cash value

    • Principal

    Correct Answer
    A. Interest
    Explanation
    During a partial withdrawal from a universal life policy, the portion that will be taxed is the interest. This is because the interest earned on the policy's cash value is considered taxable income. The loan, cash value, and principal are not subject to taxation during a partial withdrawal.

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  • 33. 

    The purchase of life insurance creates an immediate estate.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    When someone purchases life insurance, they are essentially creating an immediate estate. This means that upon their death, the insurance policy will pay out a sum of money to their designated beneficiaries. This payout becomes a part of their estate and can be used to cover expenses such as debts, funeral costs, or provide financial support to their loved ones. Therefore, the statement "The purchase of life insurance creates an immediate estate" is true.

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  • 34. 

    For personal life insurance, the lump-sum death benefit is received

    • Tax free

    • On a last in first out basis

    • As taxable income

    • With taxable interest

    Correct Answer
    A. Tax free
    Explanation
    The lump-sum death benefit received for personal life insurance is tax-free. This means that the beneficiary does not have to pay any taxes on the amount received. Unlike other forms of income, such as taxable interest or taxable income, the death benefit is exempt from taxation. This is an important benefit of life insurance, as it allows the beneficiary to receive the full amount of the death benefit without any deductions for taxes.

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  • 35. 

    A couple owns a life insurance policy with a Children's Term rider. Their daughter's is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

    • Her parent's federal income tax receipts

    • Medical exam and parents medical history

    • Proof of insurability is not required

    • Medical exam

    Correct Answer
    A. Proof of insurability is not required
  • 36. 

    How long must insurers keep records of claims?

    • 3 years

    • 4 years

    • 5 years

    • 6 years

    Correct Answer
    A. 6 years
    Explanation
    Insurers must keep records of claims for 6 years. This is likely because insurance claims can involve complex legal and financial matters that may require reference or investigation in the future. Keeping records for a longer period allows insurers to maintain a comprehensive history of claims, ensuring accuracy and transparency in their operations. Additionally, it may also help in resolving any disputes or legal issues that may arise after the initial claim has been settled.

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  • 37. 

    An annuity begins payments to the annuitant one month after it is purchased. What type is it?

    • Single premium immediate annuity

    • Level premium annuity

    • Single premium deferred annuity

    • Flexible premium deferred annuity

    Correct Answer
    A. Single premium immediate annuity
    Explanation
    An annuity that begins payments to the annuitant one month after it is purchased is classified as a single premium immediate annuity. This type of annuity requires a lump sum payment upfront and provides immediate income payments to the annuitant. It does not involve any ongoing premiums or a deferral period before payments start.

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  • 38. 

    Which of the following statements is true about annuities?

    • They are never subject to income tax

    • They use the same mortality tables as life insurance

    • They are a type of life insurance

    • They can provide a lifetime income

    Correct Answer
    A. They can provide a lifetime income
    Explanation
    Annuities are financial products that can provide a lifetime income. This means that individuals who purchase annuities can receive regular payments for the rest of their lives, even after they retire. Annuities are not subject to income tax, but this is not the only true statement about them. Annuities are not a type of life insurance, although they may use similar mortality tables to calculate payouts.

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  • 39. 

    For which of the following reasons can a temporary license be issued?

    • To provide temporary help to a licensed provider

    • To service existing business

    • To solicit new business

    • To negotiate new insurance contracts

    Correct Answer
    A. To service existing business
    Explanation
    A temporary license can be issued to service existing business because it allows individuals to temporarily work under a licensed provider in order to assist with the ongoing operations and maintenance of the business. This temporary help ensures that the business continues to function smoothly and efficiently, even in the absence of the licensed provider.

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  • 40. 

    Who controls changes in premium payments, face value, loans, and policy plans?

    • Agent

    • Policyowner

    • Insurer

    • Beneficiary

    Correct Answer
    A. Policyowner
    Explanation
    The policyowner is the one who has the authority to control changes in premium payments, face value, loans, and policy plans. They have the power to make decisions regarding these aspects of the insurance policy. The agent is the representative of the insurer and helps facilitate these changes, but the ultimate control lies with the policyowner. The insurer is responsible for providing the insurance coverage, while the beneficiary is the person or entity who will receive the benefits of the policy in the event of the policyowner's death.

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  • 41. 

    The most effective way to handle risk is to transfer it so that the loss is borne by another insurance company.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Transferring risk to another insurance company is indeed the most effective way to handle risk. By doing so, the responsibility for any potential losses is shifted to the insurance company, reducing the financial burden on the individual or organization. This allows for greater peace of mind and protection against unforeseen events.

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  • 42. 

    ______________ authority is the authority a principal intends to grant to an gaent by means of the agents contract. It is the authority that is written in the contract.

    Correct Answer
    Express
    express
    Explanation
    The term "express" refers to the specific authority that a principal intends to grant to an agent through their contract. This authority is explicitly written and stated in the contract, leaving no room for ambiguity or interpretation. The use of "express" in both uppercase and lowercase suggests that it is the correct answer.

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  • 43. 

    Which type of annuity settlements stop when the annuitant dies?

    • Life annuity

    • Cash refund annuity

    • Installment refund annuity

    • Period certain annuity

    Correct Answer
    A. Life annuity
    Explanation
    A life annuity is a type of annuity settlement that stops when the annuitant dies. Unlike other types of annuities, which may continue to make payments to beneficiaries or refund any remaining balance, a life annuity only provides payments for the lifetime of the annuitant. Once the annuitant passes away, the payments cease. This makes the life annuity a suitable option for individuals who want a guaranteed income for as long as they live, but do not require any benefits to be passed on to their beneficiaries after their death.

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  • 44. 

    Which method is used to determine the taxable portion of each annuity payment?

    • The exclusion ratio

    • The annuity to age ratio

    • Mortality tables

    • Pro rata calculation

    Correct Answer
    A. The exclusion ratio
    Explanation
    The exclusion ratio is used to determine the taxable portion of each annuity payment. This ratio calculates the portion of the payment that is considered a return of the original investment (which is not taxable) and the portion that is considered earnings (which is taxable). By using the exclusion ratio, individuals can accurately calculate the amount that needs to be reported as taxable income for each annuity payment received.

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  • 45. 

    Lyte has a $10,000 term life policy. He paid his annual premium on February 1. Lyte fails to renew the policy and dies on February 28th of the following year. Accounting for the $200 of earned premium, how much will the beneficiary receive from Lyte's insurance company?

    • $200

    • $0

    • $10,000

    • $9,800

    Correct Answer
    A. $9,800
    Explanation
    The beneficiary will receive $9,800 from Lyte's insurance company. This is because the earned premium of $200 will be deducted from the total policy amount of $10,000, leaving a remaining benefit of $9,800.

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  • 46. 

    Life expectancy is used in the calculation of which of the following?

    • Extended term

    • Dividends

    • Life settlement

    • Cash values

    Correct Answer
    A. Life settlement
    Explanation
    Life expectancy is used in the calculation of life settlement. A life settlement is a financial transaction where a policyholder sells their life insurance policy to a third party for a lump sum payment. The life expectancy of the policyholder is a crucial factor in determining the value of the policy. The longer the life expectancy, the lower the value of the policy, as the buyer will have to wait longer to receive the death benefit. Therefore, life expectancy plays a significant role in the calculation of life settlements.

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  • 47. 

    ________________ is is the legal term for the intentional withholding of information of a material fact which is crucial in making a decision.

    • Rcscission

    • Fraud

    • Concealment

    • Waiver

    Correct Answer
    A. Concealment
    Explanation
    Concealment is the legal term for intentionally withholding information of a material fact that is crucial in making a decision. This means that someone deliberately hides or fails to disclose important information that could impact the decision-making process. In legal contexts, concealment is considered a form of fraud because it involves deceit and can lead to unfair or harmful outcomes.

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  • 48. 

    A client policy lapse in 2006 without being renewed. In what year can the insurance company destroy the file on the policy?

    • 2012

    • 2015

    • 2010

    • 2011

    Correct Answer
    A. 2012
    Explanation
    The insurance company can destroy the file on the policy in 2012 because the policy lapsed in 2006 and was not renewed. After a certain period of time, insurance companies typically have the authority to destroy files on policies that are no longer active.

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  • 49. 

    In life insurance, what protects survivors from losses suffered after an insured's death.

    • Peril

    • Policy

    • Whole Life

    • Risk

    Correct Answer
    A. Policy
    Explanation
    In life insurance, a policy is what protects survivors from losses suffered after an insured's death. A life insurance policy is a contract between the insured and the insurance company that provides a sum of money, known as the death benefit, to the beneficiaries upon the insured's death. The policy outlines the terms and conditions of the coverage, including the amount of coverage, premium payments, and any exclusions or limitations. Therefore, the correct answer is "Policy."

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Quiz Review Timeline (Updated): Mar 21, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Feb 19, 2013
    Quiz Created by
    Gregpeck
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