Florida 214 License study set

Which of the following describes a participating insurance policy? - Policyowners are entitled to receive dividends At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? - Upon completion of the application Dividends payable to a policyowner are: - Declared by the insurance company. At what point does an informal agreement become a binding contract? - When consideration is provided by one of the parties to the contract When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have - Insurable interest in the proposed insured Which of the following arrangements allows one to bypass insurable interest laws? - (STOLI) or Investor Originated Life Insurance Taking receipt of premiums and holding them for the insurance company is an example of - Fiduciary Responsibility A policy of adhesion can only be modified by whom? - The Insurance Company The exchange of unequal values reflects: - Aleatory Life and health insurance policies are - Unilateral Contracts (one makes promise, other can only accept by performance The consideration clause of insurance contract includes - The schedule and amount of premium payments A life insurance arrangement which circumvents insurable interest values is called - Investor Originated Life Insurance (IOLI) Who makes the legally enforceable promises in a unilateral contract? - The Insurance Company A life insurance policy would be considered a wagering contract WITHOUT: - Insurable Interest A life insurance policy that provides a policyowner with cash value along with a level face amount is called: - Whole Life Policy Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? - the Policyowner(investor) K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as: - Universal Life Policy Which of these would be considered a Limited-Pay-Life policy? - Life Paid Up at Age 70 K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable? - Level Term Policy (pays same death benefit if insured dies any time during policy) A universal life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, cost of insurance, and - Expense Charges What type of insurance offers permanent life coverage with premiums that are payable for life? - Whole Life Policy Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? - Conversion When is the face amount of a Whole Life policy paid? - When the insured dies, or the policy's maturity, whichever comes first! Additional coverage can be added to a Whole Life policy by adding a(n) - Decreasing Term Rider When a life policy exceeds certain IRS table values, the result would create which of the following? - Modified Endowment Contract (MEC) K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? - $20,000 death benefit. Which of the following combination of plans is designed to protect an insured from an unpaid mortgage balance upon premature death? - Joint Life Policy Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? - Variable Life Variable Whole Life Policy - both an insurance and securities product Under a Graded Premium Whole Life Policy - The premium increases each year during the early years of the contract and remains the same after that time P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? - Family Maintenance Policy Term life policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period - Varies according to the contract The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is - the cost STOLI is when a person purchases life insurance only to then sell it to - a third party with no insurable interest