Life insurance practice exam primerica Questions and Answers

Life insurance practice exam primerica Questions and Answers The receipt given to a life insurance applicant when the application is completed and the initial premium is received is called a(n) Conditional receipt. Statements in the application for insurance that are believed to be true to the best of the applicant's knowledge are called Representations. All of the following apply to the waiver of premium rider EXCEPT There is no charge for this provision. An annuity is considered fixed when it does all of the following EXCEPT Provides the annuitant with either the guaranteed or current interest rate, whichever is less. The most common type of whole life insurance where premiums are payable over the whole life of the insured to age 100 is called Continuous premium (straight) life. A beneficiary who has a vested interest in the proceeds of a life insurance policy is the Irrevocable beneficiary. The insured died four months after a $100,000 life insurance policy was issued and delivered. At the time of the claim, the company noticed the original application was missing some key information. What will the company do? Pay the death claim because the insurer waived the right to obtain the missing information The policy and a copy of the application, along with any riders and amendments, is called the Entire contract. At what age can a participant receive distributions from a qualified plan without incurring a 10% penalty? 59 ½ Which settlement option guarantees an income for two or more recipients for as long as they live? Joint and Survivor Which type of policy allows the insured to change the amount of the death benefit, the amount of premium, or the type of coverage as their needs change? Adjustable life To prevent individuals from profiting from a loss, insurance companies must be certain that Insurable interest exists. If a misstatement of age is discovered during the processing of a life insurance claim, what will the insurance company do? Adjust the death benefit based on the premiums that were paid. Each of the following is a typical characteristic of group life insurance EXCEPT Evidence of insurability is usually required. A life settlement option that pays out the death benefit incrementally, in a specified amount until all of the proceeds are exhausted is called Fixed-amount installments A life insurance death benefit paid in a lump sum to a beneficiary is Not subject to any taxes. Information collected from employment records, credit reports or other sources that includes written or oral information concerning credit, character, reputation or habits is called a(n) Investigative Consumer Report. An annuity that is purchased with a lump-sum payment and begins income payments within one year is a Single premium immediate annuity. Which statement is INCORRECT concerning policy dividends? The insurance company may guarantee dividends. What is the risk classification for those who are insurable, but present a higher than average risk? Substandard At age 25, an individual purchased a decreasing term policy. What does that say about the coverage and the premium? The coverage decreases but the premium stays the same. Underwriting is the process of Determining the insurance company's risk regarding a proposed insured. 23. A whole life product that covers two lives and provides for payment of the death benefit on the death of the first insured is called Joint Life. A producer delivers a policy to an insured, but nine days later the insured returns the policy and wants a complete refund. What provision allows the insured to return the policy? Free Look Which of the following retirement plans is a special tax favored plan for nonprofit, charitable, educational or religious groups? 403(b) Tax-sheltered Annuity (TSA) The MIB is a nonprofit trade association that maintains Medical information on applicants for life and health insurance. What is the purpose of the grace period in life insurance policies? To protect the policyowner against an unintentional lapse of the policy period of time, and the policyowner What type of permanent insurance allows the policyowner to pay for a policy in a specified does not have to make any more premium payments for the life of the policy? Limited Payment What does the payor benefit rider protect? Premium payments for a juvenile policy How long does an employee have to convert a group policy to an individual policy without evidence of insurability? days 31 If the cash value exceeds the premiums paid in a whole life policy, what are the tax consequences if the policy is surrendered? The portion that exceeds the premiums paid is taxable. Betty is the only beneficiary named on her husband Bob', policy which has a Common Disaster provision. They are in a car accident, and Bob dies instantly. Betty lives for 29 days. Who will receive the death benefit? Bob's estate The legal transfer of all or part of a policyowner's rights, title or interest is called a(n) Assignment. What do employees receive under a group contract? Certificate of insurance An annuity in which investment growth is dependent on the performance of an index such as the Standard and Poor's 500 is called a(n) Equity Indexed Annuity. The premium payment mode can be best described as the Frequency with which the policy premium will be paid.