PSI Life Insurance Test(solved)

Which policy type is backed by equity investments and allows the policyholder to adjust the death benefit? - ANSWER-variable universal life Which annuity settlement option provides a stated monthly amount to the annuitant and upon the annuitant?s death the same or a lesser amount paid for the lifetime of the survivor? - ANSWER-Joint and survivorship option In which of the following must a beneficiary change request be filed in writing to the insurer and is made effective by the insurance company recording the change in its records? - ANSWER-recording method What is the order in which beneficiaries receive proceeds from a life insurance policy? - ANSWER-succession of beneficiaries Which part of an insurance contract contains the promise to pay losses covered by the policy in exchange for the insured's premium and compliance with policy terms? - ANSWER-insuring clause Which of the following is exempted from the incontestability provision in insurance policies? - ANSWER-fraudulent misstatements What is the primary advantage for obtaining a reinstatement of a policy rather than obtaining a new one? - ANSWER-insured original age is used All of the following are ownership rights EXCEPT - ANSWER-switching the policy from one insured to another Which is a common approach to addressing the problems inherent in naming a minor as a beneficiary to a life insurance policy? - ANSWER-establishing a trust to administer proceeds In which of the following must a beneficiary change request be filed in writing to the insurer and is made effective by the insurance company recording the change in its records? - ANSWER-recording method Which part of an insurance contract contains the promise to pay losses covered by the policy in exchange for the insured's premium and compliance with policy terms? - ANSWER-insuring clause Which is a common approach to addressing the problems inherent in naming a minor as a beneficiary to a life insurance policy? - ANSWER-establishing a trust to administer proceeds Which of the following occurs immediately after the application is submitted and the initial premium paid? - ANSWER-the underwriting process begins All of the following are tax qualified retirement plans EXCEPT - ANSWER-Section 529 plan For an individual long-term care policy there is an annual dollar limit for tax deductions that is based on which of the following? - ANSWER-age If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of all of the following EXCEPT - ANSWER-the treatment procedures that are covered by the policy. All of the following are common exclusions from loss found in disability income policies EXCEPT for that incurred while - ANSWER-committing a misdemeanor What type of insurance should a company purchase if it wants to insure the life of its CEO? - ANSWER-key person insurance For an individual long-term care policy there is an annual dollar limit for tax-deductions that is base on which of the following? - ANSWER-age Which of the following term insurance types provides temporary protection that can be changed to some type of permanent protection without evidence of insurability? - ANSWER-convertible Which one of the following is particularly important for an insurance producer to explain to a client upon delivery of a life insurance policy? - ANSWER-any exclusions All of the following are ownership rights EXCEPT - ANSWER-switching the policy from one insured to another How might someone cover the extra expenses of child care and home-related costs? - ANSWER-purchasing family term insurance All of the following are required signatures on a life insurance application EXCEPT - ANSWER-the minor in a juvenile policy Which of the following is TRUE regarding assignment rights for irrevocable beneficiaries? - ANSWER-They are MORE likely to receive a loan based on the expectations of the proceeds. why is relying solely on employer group life insurance generally considered inadequate for most individual's needs? - ANSWER-It is financially insufficient to cover end of life expenses. How do warranties differ from representations? - ANSWER-a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge. The group conversion option is allowed for all of the following EXCEPT - ANSWER-during the annual benefits enrollment period Which type of annuity attempts to offset inflation by providing a benefit linked to an underlying investment account? - ANSWER-variable What procedure is used by an insurer to protect itself in the event a dispute arises and the applicant and the agent do not recall the changes that were made in a completed application? - ANSWER-The applicant and possibly the agent initial any changes made. All of the following are features of the spendthrift clause EXCEPT - ANSWER-the beneficiary may encumber the proceeds In which of the following must a beneficiary change request be filed in writing to the insurer and is made effective by the insurance company recording the change in its records? - ANSWER-recording method Which part of an insurance contract contains the promise to pay losses covered by the policy in exchange for the insured's premium and compliance with policy terms? - ANSWER-insuring clause Which of the following is TRUE of an equity-indexed annuity? - ANSWER-It has a guaranteed minimum interest rate. An insured and the beneficiary are both killed in a fatal accident. Which provision presumes the insured survived the beneficiary? - ANSWER-common disaster clause Under the misstatement of age or gender provision, what happens if it is determined at death that the insured's age or gender was misstated on a life insurance policy application? - ANSWER-benefits are adjusted to an amount that the premium would have purchased at the correct age or gender All life insurance and health insurance contracts contain all of the following EXCEPT - ANSWER-representation All of the following are classifications of risk EXCEPT - ANSWER-non-nicotine Group AD&D policies may be deducted by whom and under which deduction category? - ANSWER-the employer under business expenses All of the following are tax qualified retirement plans EXCEPT - ANSWER-Section 529 plan Which of the following is common in an increasing term life policy? - ANSWER-It begins with little or no insurance protection Which of the following is the time limit on certain defenses after which the policy becomes incontestable? - ANSWER-2 years Which whole life policy premium type is the most common? - ANSWER-continuous premium The right to change the beneficiary or dispose of the policy or its benefits in any manner one chooses is reserved to the policyowner UNLESS which of the following is true? - ANSWER-The policyowner has named an irrevocable beneficiary Which of the following is characteristic of a nonqualified plan? - ANSWER-plan does not meet federal guidelines for tax benefits In a level term life policy, which ALWAYS remains constant? - ANSWER-death benefit Why is the accidental death benefit referred to as double indemnity? - ANSWER-It provides twice the face value in the policy for death due to accident. Which of the following is TRUE for a flexible premium annuity? - ANSWER-The purchaser has the option to vary the amount of each premium payment falling between a minimum and maximum amount. Which of the following occurs immediately after the application is submitted and the initial premium paid? - ANSWER-the underwriting process begins In order to AVOID being classified as an MEC, a policy must pass which of the following? - ANSWER-seven-pay test Which of the following lists the three common types of permanent individual life insurance? - ANSWER-Variable Life, Whole Life, Universal Life Which of the following refers to how often a premium is paid? - ANSWER-mode When the courts look at a contract to determine the intent of the parties which of the following is considered? - ANSWER-the entire contract Current assumption whole life policies are sensitive to which of the following? - ANSWER-interest rates What is the purpose of Stranger-originated life insurance (STOLI)? - ANSWER-the policy is originated primarily or solely for the purpose of resale Which of the following is TRUE of the limited pay whole life policy? - ANSWER-Coverage continues after the policy is paid-up Which policy provision permits the policyowner to take a specified number of days to examine the contract, and allows for cancellation and a full refund if the policyowner rejects the terms or costs? - ANSWER-Free look Obtaining consumer information reports under false pretenses is prosecutable by which of the following? - ANSWER-Fair Credit Reporting Act All of the following are TRUE regarding incomplete applications EXCEPT - ANSWER-the incomplete application can be accepted with the missing information added later. What is the primary advantage for obtaining a reinstatement of a policy rather than obtaining a new one? - ANSWER-insured original issue age is used Which of the following is an example of a premium payment mode? - ANSWER-annual premium payment How does the per capita rule apply to proceeds from a life insurance policy? - ANSWER-The proceeds are divided equally a