Missouri life insurance exam practice Questions & Answers(RATED A+)

When an employer terminate coverage under a group policy, how long is that coverage in force? -ANSWER 31 Days. The employee has 31 days under the conversion privilege to convert to an individual policy. When talking about parties to a contract, what makes a person legally competent. -ANSWER The person must complete secondary education. What is the number of credits required for the fully insured status of social Security disability benefits? -ANSWER 40 What type of insurance would be used for a return premium rider -ANSWER Increasing Term When an insured under a life insurance policy died the beneficiary receive the face amount of the policy and a refund of all premiums paid. Which rider is attached to this policy. -ANSWER Return of premium A soon to be insured receives his conditional receipt, but dies before the policy has been issued. What will the insurer do? -ANSWER Pay the policy proceeds only if it would have issued the policy. A time in which the annuitant or the beneficiary DO NOT receive income. -ANSWER Depreciation period Jim Bob buys a $100,000 annual renewable term life policy for extra protection until his children graduate college he finds out that his policy. -ANSWER Required a premium increase each renewal Under the fair credit report act if a customer questions the accuracy of the information in his or her report what would the agency do? -ANSWER Respond to the customers complaints What is NOT true about beneficiary designations? -ANSWER The beneficiary must have insurable interest in the insured. What may a participating insurance policy do? -ANSWER Pay dividends to the policy owner What nonforfeiture option Provides coverage for the longest period of time -ANSWER Reduced Paid-Up A life insurance policy used to fund an agreement establishing the intent of someone to purchase a business upon the insured, business owners death is? Ps just writing this made my brain hurt. -ANSWER Buy-sell agreement Buy-Sell Agreement -ANSWER are used to contractually establish the intent of someone else to purchase the business upon the insured's death, and to set a value (purchase price) on a business. Life insurance is used to fund the buy-sell agreement. Any type of life insurance may be purchased to provide the necessary funds for the agreement. Insurance can be used to either fully or partially fund the buy-sell agreement. What will be included in the policy summary? -ANSWER A policy summary must be delivered along with the policy and will provide •producer's name and address •the insurance company's home office address •the generic name of the policy issued •premium, cash value, surrender value •death benefit figures for specific policy years. What qualifies employees insured under a group life plan to be allowed to convert to individual insurance of the same coverage once the plan is terminated? -ANSWER Those who have been insured under the plan for at least 5 years. All of the following are Nonforfeiture options EXCEPT a) Cash surrender b) Extended term c) Reduced paid-up d) Interest only -ANSWER d) Interest only Nonforfeiture values include cash surrender, extended term and reduced paid-up. Interest only is a settlement option. A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as a) Juvenile protection provision. b) Survivor protection. c) Life planning. a) Survivorship insurance. -ANSWER b) Survivor protection. Life insurance can provide the funds necessary for the survivors of the insured to be able to maintain their lifestyle in the event of the insured's death. This is known as survivor protection. In insurance, an offer is usually made when a) The insurer approves the application and receives the initial premium. b)The agent hands the policy to the policyholder. c)An agent explains a policy to a potential applicant. d)An applicant submits an application to the insurer. -ANSWER d) An applicant submits an application to the insurer. In insurance, the offer is usually made by the applicant in the form of the application. Acceptance takes place when an insurer's underwriter approves the application and issues the policy. Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? a) Automatic premium loan b) Extended term c) Reinstatement d) Reduced paid-up option -ANSWER a) Automatic premium loan Automatic premium loan provision is not required, but is commonly added to contracts with a cash value at no additional charge. This is a special type of loan that prevents the unintentional lapse of a policy due to nonpayment of the premium. Who can make a fully deductible contribution to a traditional IRA? a) Anybody; all IRA contributions are fully deductible regardless of income level b) Someone making contributions to an educational IRA c) A person whose contributions are funded by a return on investment d) An individual not covered by an employer-sponsored plan who has earned income -ANSWER d) An individual not covered by an employer-sponsored plan who has earned income Individuals who are not covered by an employer-sponsored plan may deduct the amount of their IRA contributions regardless of their income level. What are the two components of a universal policy? a) Mortality cost and interest b) Separate account and policy loans c) Insurance and cash account d) Insurance and investments -ANSWER c) Insurance and cash account A universal policy has two components: an insurance component and a cash account. The insurance component of a universal life policy is always annual renewable term insurance. The cash account accumulates on a tax deferred basis each ear and earns either the guaranteed contract rate or the current rate, whichever is higher. Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner? a) Third-party ownership b) An irrevocable beneficiary c) A buy-sell agreement d) Family term rider -ANSWER a) Third-party ownership Contracts that are owned by someone other than the insured are known as third-party ownership. Most policies involving third-party ownership are written in business situations or for minors in which the parent owns the policy. Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be a) Determined by the health of the insured. b) Based on the issue age of the insured. c) Discounted. d)Adjusted to the insured's age at the time of renewal. -ANSWER d) Adjusted to the insured's age at the time of renewal. If a level term product is renewed at the end of the term period the premium will be based upon the attained age of the insured. All of the following would be different between qualified and nonqualified retirement plans EXCEPT a) IRS approval requirements b) Taxation on accumulation c) Taxation of withdrawals a) Taxation of contributions -ANSWER b) Taxation on accumulation Taxation on accumulation is deferred in both types of plans. The rest of the characteristics would differ. All of the following information about the applicant is identified in the General Information section of a life insurance application EXCEPT a) Gender. b) Occupation. When talking about parties to a contract, what makes a person legally competent. -ANSWER The person must complete secondary education.