A.D. BANKER: Life & Health - Comprehensive Exam Questions with accurate answers. Rated A. 2022/2023

A.D. BANKER: Life & Health - Comprehensive Exam Questions with accurate answers. Rated A. 2022/2023 Legally speaking, a producer has a __________ duty when handling life insurance premiums and applications for an insurer. - Fiduciary It is the _________ who issues a Certificate of Authority enabling an insurer to conduct insurance business within a particular state. - State Insurance Commissioner When an applicant for life insurance faces potential financial loss in the event of injury or sickness of an insured, it is said the applicant has: - Insurable interest The reinsurance agreement that automatically accepts all new risks presented by the company seeking or requesting reinsurance from the reinsurer is known as a ____________ agreement. - Treaty Insurable interest for life insurance is necessary only at the time of: - Application With health and life insurance a/an _________ is required at the time of the application. - Insurable interest _____________ insurance allows for insurance coverage to be obtained when not available from admitted carriers. - Surplus lines Which of the following is NOT considered one of the essential elements of a contract? - Conditions The insurance industry is primarily regulated at the _________ level. - State A contract that is drafted by an insurer and receives no input or alteration from the insured, is considered a(n): - Contract of Adhesion The reinsurance agreement that allows the reinsurer an opportunity to reject coverage for individual risks or price them higher due to their higher risk is known as a(n) ___________ agreement. - Facultative When the owner of the policy and insurer must meet certain conditions in order for the health insurance policy to be enforceable, it is referred to as a(n): - Conditional contract The ____________ market is a private source of coverage of last resort for individuals or businesses that have been rejected by voluntary market insurers. - Residual To make insurance more affordable and protect the insurance company from paying out too much in claims, insurers will: - Reinsure the risk All of the following are producer responsibilities to the applicant, except: - Offering and selling only the lowest premium policy What should a producer do if the policy applied for is issued at a higher rate than was expected? - Personally deliver the policy, explain the rating, and reinforce the value of the policy What is the primary reason why States have 'outlawed' Stranger Originated Life Insurance (STOLI) transactions? - At policy inception there is a lack of insurable interest When an insurer requires that an insured be subjected to a medical examination, who pays for the medical exam? - The insurer The name used to indicate the insured's age at time of policy renewal is the ________ age. - Attained In order for a life insurance policy to be valid, insurable interest must exist at time of _________. - Application In a policy summary all of the following must be shown on both a guaranteed and non-guaranteed basis, except: - Dividends Loading includes all of the following, except: - Mortality A personalized computer-generated illustration detailing premiums, cash values, interest rates, and surrender values is called __________. - A policy summary A married couple purchases a $250,000 Joint Life Policy. When the older of the two dies, what is the amount payable to the survivor? - $250,000 Which of the following is TRUE of a term rider when attached to a permanent life policy? - It can provide additional temporary coverage on the insured or on other members of the family All of the following are correct pertaining to Decreasing Term, except: - The premium declines throughout the term of the policy When the death of an insured occurs within a specified period, causing the policy to pay double or triple benefits, this policy must have which of the following riders? - Accidental Death Rider Which of the following policies must be sold by prospectus? - Variable Whole Life Term Life insurance is designed to provide coverage for ___________. - A specified period of time Which Whole Life policy is designed to provide a substantial immediate cash value? - Single Premium Whole Life Policy A life insurance applicant wants a combination of savings and insurance protection with guarantees. If the applicant is willing to pay premiums only until the age of 65, at which time the policy is fully paid-up, which of the following should he/she purchase? - Limited Pay Whole Life-Age to age 65 Bert is the owner and insured of a traditional whole life insurance policy he purchased 20 years ago. He has never missed a premium payment. He would like to buy a new car but his bank account is running low. How can he obtain the necessary funds while still maintaining coverage? - Take a policy loan from the insurer With a Current Assumption Whole life policy, what can happen if the cash values increase too quickly? - The policy could mature sooner than expected All of the following statements are true of a juvenile policy, except: - The insured is the premium payor Which of the following is designed for someone with a large insurance need but with limited cash flow? - Term Life Insurance Whole Life is also known as ________ protection. - Permanent Which of the following life insurance policies has a current and guaranteed maximum premium stated in the policy? - Indeterminate Premium Life An existing term life insurance policy may be exchanged for a new term life insurance policy on the ______ date. - Re-Entry A client purchases an individual disability income policy and receives the policy from the insurer 45 days after application. Upon receipt of the policy, the client typically has ______days to review and return the policy to receive a full refund for any reason. - 10 Which of the following beneficiary designations is a class designation? - Any children of this marriage All of the following are life insurance policy prohibited provisions, except: - Voiding a policy for failing to repay any policy loan or loan interest when the total outstanding policy debt is greater than the policy's cash value A policy owner has chosen the Fixed Amount Settlement Option. Which of the following best describes this option? - The owner specifies the amount of each periodic payment and the insurer pays that amount until the funds plus interest are depleted The surrender charge schedule for a variable universal life policy generally ________ over time. - Decreases After a life insurance policy has been in force for more than _____ years the policy is considered incontestable. - 2 Jerry has selected a Life Income 10 year Period Certain. What happens to the income payments if he dies in year 4 after starting to receive income benefit payments? - The payments continue for the balance of the Period Certain to a named beneficiary With a life insurance policy, in the event of the premature death of the insured, who has first claim to the policy benefits? - Primary beneficiary On a variable universal life policy what is the difference between the cash value and the cash surrender values? - The surrender charge Which of the following beneficiary designations prevents a policy owner from assigning the policy, taking a policy loan, or surrendering the policy without the beneficiaries consent? - Irrevocable A policy is issued with a rider. Years later the policy owner would like to drop the rider in order to save some money. Who has the authority to effect that policy change? - An executive officer of the insurer What is the easiest and best way to assure that the life insurance policy's death proceeds don't end up in probate court process? - List a primary and contingent beneficiary by their full name and relationship to the insured Which of the following provisions commence at the time of the delivery of the policy to the insured? - Free Look Period Concerning the Paid-Up Additions Dividend Option, all of the following are true, except: - Eventually, no more premiums will be due on the policy In order to make sure that a creditor of the insured is not paid more than the outstanding loan at time of claim, the policyowner should: - Purchase a decreasing benefit policy that matches the loan repayment schedule An annuity owner can change all of the following in an annuity, except: - Mortality table Instead of waiting to receive her payments over time Jeanne decides to obtain the greatest amount of money out of her annuity immediately. Which option did she choose