Colorado Insurance Exam-Life

What is the purpose of settlement options? - Answer- They determine how death proceeds will be paid. The minimum interest rate on an equity indexed annuity is often based on - Answer- An index like Standard & Poor's 500. The death benefit is $0 at the end of the policy term. The contract pays only in the event of death during the term and there is no cash value. The face amount steadily declines throughout the duration of the contract. - Answer- decreasing term policy What may last for the lifetime of the annuitant. - Answer- annuity period The paid-up addition option uses the dividend - Answer- To purchase a smaller amount of the same type of insurance as the original policy. The employer pays 100% of the premiums. They help to reduce adverse selection against the insurer. They require 100% employee participation. - Answer- noncontributory group plan An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation? - Answer- Decreasing term A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy - Answer- Required a premium increase each renewal. Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years? - Answer- A policy summary If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than - Answer- With the policy Methods used to pay the death benefits to a beneficiary upon the insured's death are called - Answer- Settlement Options It transfers rights of ownership from the owner to another person. - Answer- policy assignment