NWM Chapter 6 Review Exam Study Set
Which statement best describes a single premium whole life policy? - Answer Paid-up
policy that offers lifetime protection
What would be the disadvantage of naming a trust as beneficiary of a life insurance
policy? - Answer Trust administration fees would reduce policy proceeds
Where will a life insurance policy's proceeds be directed to if all the beneficiaries die
before the insured? - Answer Insured's estate
When a policy loan is requested by a policyowner and it requires the consent of the
beneficiary, what kind of beneficiary designation is this? - Answer Irrevocable
beneficiary
The beneficiary of a life insurance policy is normally selected by whom? - Answer
Policyowner
What kind of arrangement gives the policyowner the right to change the beneficiary? -
Answer Revocable designation
Life insurance premiums are computed on what three factors? - Answer Mortality,
interest, expenses
What effect does interest income have upon insurance premiums? - Answer Decreases
premium
Which of these occurrences could improve an insurer's ability to reduce premiums? -
Answer Rate of earnings on investments increase
Death benefits from a life insurance policy are normally considered to be - Answer
exempt from federal income tax
Which life insurance settlement option pays lifetime benefits to two or more people? -
Answer Joint and survivor
Who is the beneficiary in a life insurance policy? - Answer The stated person or entity
who is designated to receive the death proceeds
A policyowner fell behind on the premium payments of a whole life policy and is now in
the grace period. How much will the beneficiary receive if the insured dies during this
grace period and the policy also contains an outstanding policy loan? - Answer Face
amount minus the loan balance and past-due premium
Which statement is INCORRECT about the interest-only settlement option in a life
insurance policy? - Answer Interest on proceeds must be paid by the beneficiary
When there is a named beneficiary on a life insurance policy, the death benefits -
Answer are paid directly to the beneficiary without interference from the insured's
Which statement best describes a single premium whole life policy? - Answer Paid-up
policy that offers lifetime protection
What would be the disadvantage of naming a trust as beneficiary of a life insurance
policy? - Answer Trust administration fees would reduce policy proceeds
Where will a life insurance policy's proceeds be directed to if all the beneficiaries die
before the insured? - Answer Insured's estate
When a policy loan is requested by a policyowner and it requires the consent of the
beneficiary, what kind of beneficiary designation is this? - Answer Irrevocable
beneficiary
The beneficiary of a life insurance policy is normally selected by whom? - Answer
Policyowner
What kind of arrangement gives the policyowner the right to change the beneficiary? -
Answer Revocable designation
Life insurance premiums are computed on what three factors? - Answer Mortality,
interest, expenses
What effect does interest income have upon insurance premiums? - Answer Decreases
premium
Which of these occurrences could improve an insurer's ability to reduce premiums? -
Answer Rate of earnings on investments increase
Death benefits from a life insurance policy are normally considered to be - Answer
exempt from federal income tax
Which life insurance settlement option pays lifetime benefits to two or more people? -
Answer Joint and survivor
Who is the beneficiary in a life insurance policy? - Answer The stated person or entity
who is designated to receive the death proceeds
A policyowner fell behind on the premium payments of a whole life policy and is now in
the grace period. How much will the beneficiary receive if the insured dies during this
grace period and the policy also contains an outstanding policy loan? - Answer Face
amount minus the loan balance and past-due premium
Which statement is INCORRECT about the interest-only settlement option in a life
insurance policy? - Answer Interest on proceeds must be paid by the beneficiary
When there is a named beneficiary on a life insurance policy, the death benefits -
Answer are paid directly to the beneficiary without interference from the insured's
