Traditional Life Insurance Products FINAL EXAM (CLONE TEST)

Which of the following types of insurance policy did Brody buy if he planned to pay premiums and have coverage for the duration of his entire lifetime, rather than for one year at a time?

The actual cost of insurance is lower at what point in time?

Mr. Azzopardi is the owner and insured on his life insurance policy. He named his son Ed as primary beneficiary and his daughter Mary as contingent beneficiary. When Mr. Azzopardi’s life insurance policy makes payment of the death benefit, who will receive it?

Mrs. Carlson named her daughter Edith as an irrevocable primary beneficiary. What action will the insurance company take if she asks it to change the primary beneficiary to her son, Donald?

Diego’s life insurance policy has a grace period of 30 days. If he doesn’t pay his policy’s next premium payment due on March 1, the policy will _____ on April 1.

The reinstatement provision in a life insurance policy allows the policy to:

Mrs. Hsieh borrowed from the cash value of her life insurance policy on January 1. At what time must she repay the policy loan?

If an insured does not pay a life insurance policy premium within the grace period, what policy provision will allow the overdue premium to be automatically deducted from the policy’s cash value?

Which of the following is NOT one of a life insurance policy’s nonforfeiture options?

The beneficiary of Stella’s life insurance policy opted to receive the death benefit in installment payments for a stated length of time. What settlement option did the beneficiary choose?

_____ benefits are payable under a life insurance policy if the insured suffers from a terminal illness or a life-threatening or catastrophic condition defined in the policy.

Which of the following riders allows a policyholder to purchase additional life insurance at stated times without having to provide evidence of insurability?

What strategy requires insurance companies to charge a level premium for the duration of the life insurance policy, regardless of the fact that the cost of insurance may actually be higher or lower than the policy premium for any particular year?

Vlad purchased a life insurance policy specifically to provide protection during the course of his 5-year auto loan. What type of life insurance did he buy?

A term life insurance policy offers the policyowner the right to exchange the term policy for a permanent insurance policy without providing evidence of insurability. What is this right called?

Mrs. DeLeon purchased a life insurance policy with a face amount that mirrors the reducing balance of her mortgage, dollar-for-dollar. What type of policy did she buy?

Term life insurance is often purchased for all the following reasons, EXCEPT?

What type of life insurance was designed to both provide a death benefit during the lifetime of the insured and offer a tax-advantaged savings feature?

A _____ insurance company is owned by its policyowners and profits earned by the company are passed along to policyowners in the form of a dividend.

Which of the following is NOT one of the dividend options in a participating life insurance policy?

Life insurance dividends are _____ because they are considered a return of the policy premium.

Esme’s _____ life insurance policy will remain in force until she is age 100, or until she dies, whichever comes first. If she lives to age 100, Esme’s policy will pay her a living benefit equal to the face amount, less any outstanding policy loans and interest.

Ricky wants to take a loan against the cash value of his whole life policy. If his cash value is $10,000, what is the maximum amount he can borrow?

The largest portion of an insurance company’s admitted assets are its ____, which represent the present value of the company’s future claims.

Mrs. Eisenhuth wants to borrow against her whole life policy. Which of the following is MOST likely to be the loan interest rate charged by the insurance company?

Mr. Sagastume’s whole life policy will lapse if he doesn’t pay the premium. He can’t afford the premium and, instead, decides to utilize one of the policy’s nonforfeiture options. Which of the following actions does Mr. Sagastume take?

What type of whole life policy is designed to insure multiple people and pay a death benefit when the first insured person dies?

Rudy is 60 years old, has a medical condition, and is unable to purchase a standard life insurance policy. His friend tells him he may be eligible for a _____ life insurance policy because it is marketed specifically to older individuals with medical conditions.

Marcella’s life insurance policy provides a death benefit for a specified period of time. At the end of that time, if she is still alive, the _____ contract will pay Marcella a living benefit that is equal to the face amount.

What sets a modified endowment contract apart from other forms of life insurance?

All of the following are characteristics of a modified endowment contract, EXCEPT?

All _____ life insurance policies are considered by the IRS to be modified endowment contracts under TAMRA.

Mrs. Frechette’s ____ policy allows her to withdraw part of its cash value without having to take a policy loan.

Which of the following characteristics sets a universal life policy apart from other types of life insurance?

Sam and Ellen are both age 25, and each is buying the same 10-year level term policy for $100,000. Assuming all underwriting elements are the same for both Sam and Ellen, which of the following statement BEST describes their annual policy premiums?

Mr. Patel’s universal life policy’s _____ premium is the most money the IRS will allow him to pay without classifying the policy as a modified endowment contract.

Blanche has been paying her universal life policy’s minimum premium for the past 5 years. This amount is ____.

A universal life policy’s planned, or target, premium is less than the maximum premium, more than the minimum premium, and:

What type of life insurance policy does Marguerite have if she can make partial withdrawals from the cash value without incurring a loan?

For the first 25 years she had her universal life policy, Sasha paid premiums that were more than the minimum amount and less than the planned (target) premium. What consequence can she expect at some point in the future?

If Raymond’s life insurance policy exceeded the threshold established by the IRS for its definition as a life insurance contract, what did Raymond do?

Tamika has a universal life policy with an increasing death benefit. When she dies, the death benefit paid will represent:

Mr. Trudeau’s universal life policy has a level death benefit of $100,000, an annual premium of $1,000, and an outstanding loan of $10,000. Disregarding loan interest, if Mr. Trudeau dies, what amount will his beneficiary receive?

What type of insurance product combines elements of life insurance with those of an investment?

What type of permanent life insurance policy does Mrs. Yamaguchi own if it does not guarantee a cash value or an interest rate at which the cash value accumulates?

What concept is illustrated by Mr. Rau, who was recently diagnosed with a heart condition, applying for life insurance for the first time?

Into what account does a life insurance company deposit the premiums paid for a variable life insurance policy?

The variable element of a variable life insurance policy is its _____, which increases or decreases based upon investment results of the underlying funds chosen by the policyowner.

A variable life insurance policy offers a variety of investment options which include all the following, EXCEPT:

Agents are required to provide full disclosure of all provisions contained in a variable life contract in the form of a(n):

Which of the following is NOT a typical expense found in a variable life insurance contract?

What type of insurance contract incorporates the flexibility and adjustment features of universal life insurance with the ability of the policyowner to direct investment options?

Which of the following correctly reflects the two tax issues associated with policyowners exhausting their life insurance policies’ cash values during the first 15 years after a policy is issued?

All the following statements apply to a variable life insurance policy, EXCEPT:

Margot is considering the purchase of a variable life insurance policy. Which of the following is NOT required to be furnished to her, in writing, before she completes the application?

Cullen is meeting with his life insurance agent to discuss the purchase of life insurance. When the agent proceeds with a financial needs analysis, which of the following BEST describes the agent’s goal?

Angus submitted a life insurance application to an insurance company for consideration. The insurer may take any of the following actions, EXCEPT:

An agent can determine the ____ of a life insurance product by verifying the financial strength of the insurance company, determining the prospect’s needs and goals, and evaluating the contract itself.

If a life insurance agent wants to determining the financial strength rating of an insurance company, any of the following rating services will be helpful, EXCEPT:

The purchase of an insurance policy ____ able to address a consumer’s financial needs and objectives.

Mr. Abdallah tells his agent he plans to keep his whole life insurance policy until age 65, at which time he plans to surrender it for its cash value. This period of time is referred to as Mr. Abdallah’s:

Mrs. Bakker is considering the purchase of a variable life insurance policy. When she tells her agent she can only buy the policy if her cash value and death benefit will be guaranteed, the agent knows her _____ is low.

Which of the following is NOT a term used to describe an individual’s risk tolerance?

Pierre is an insurance agent who is trying to determine if a particular life insurance policy is appropriate for his client. Which of the following factors must he consider to make this determination?

The NAIC’s suitability model regulation applies to which of the following types of insurance?

_____ only require Rebecca to understand her client’s financial situation before recommending or selling an annuity.

All the following are among the minimum requirements that must be reviewed to determine annuity suitability, EXCEPT?

Irene applied for a life insurance policy and, when her agent delivered the policy, changed her mind and decided she didn’t want it. Irene can return the policy and receive a full refund of the deposit she paid in accordance with the terms of which of the following policy provisions?

The _____’s best interest standard requires an agent to meet obligations relating to care, disclosure, conflict of interest, and documentation.

A best interest standard of care requires an agent to do all the following, EXCEPT:

A best interest standard requires the agent to seek out and find _____ product for the client based on the client’s particular needs and goals.

Angel Life Insurance Company issued a life insurance policy nine months ago. Because the insured died as a consequence of a medical condition she did not reveal in the original application, what does the policy’s Incontestable provision allow the insurance company to do?

Fergus is one of the parties to a life insurance contract. If he has all rights in the policy, including the right to access the policy’s cash value, he is the _____.