Traditional Life Insurance Products FINAL EXAM (NE 6000169220)

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 she asks it to change the primary beneficiary to her son, Donald?

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?

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?

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?

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:

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?

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?

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?

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 _____ 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.

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:

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?

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 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.

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?

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:

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?

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.

The purchase of an insurance policy ____ 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:

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?

_____ 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?

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.

Term life insurance does NOT include _____ components.

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?