Idaho Insurance Exam (A+ GRADED)

Net Single Premium correct answers Premium that a person must pay in a lump sum to receive all the benefits promised in the policy if no insurer expenses were considered Insurers will also consider which of the following in evaluating risk. correct answers Numerical rating system to evaluate the risk posed by proposed insureds Key difference between variable life and variable universal life insurance correct answers Variable life insurance require a fixed premium payable for the life of the policy while variable universal life permits premium flexibility. Survivorship life insurance policies correct answers Insure more than one person but pay the death benefit only when the second insured dies. Premiums are about the same as for two comparable single-life policies What are survivorship life insurance policies primarily for correct answers pay estate taxes and other settlement costs when the second insured dies. Can an employee convert to an individual policy when the group coverage ends? correct answers yes, within 31 days following termination or retirement from the group If a policy was instated ten years ago to the day will the insurance be distributed correct answers No, on the day of policy lapse all coverage is terminated. Who funds salary continuation plan correct answers The employer funds the benefit. Unlike traditional differed compensation where the employee funds the benefit Why are annuities called the mirror image of life insurance? correct answers Life insurance creates an estate, while annuities liquidate an estate (to pay an amount over time). What can annuity settlement options be based on? correct answers The length of the annuitant's life or the joint lives of two annuitants a fixed number of years a combination of the two. When an annuity owner makes premium deposits and allocates them among the contract's subaccounts, what are these funds used to buy? correct answers accumulation units What is the 7-pay test? correct answers The 7-pay test applies specifically to the premiums paid into a contract during its first seven years. If this amount exceed the net level premiums that would have been required to produce a paid-up policy after seven even annual payments, then the policy is a Modified Endowment Contract. What amount of a group life insurance policy is taxable when the benefit is above $50,000? correct answers Anything above $50,000 is taxed on $25,000