Which of the following statements about dividend options is (are) true? I. The interest on dividends left to accumulate with the insurer is not considered to be taxable income. II. Paid-up additions are additional units of whole life insurance. A) I only B) II only C) both I and II D) neither I nor II […]
Date: September 19th, 2020
Advantages of selecting the paid-up additions dividend option in a life insurance policy include which of the following? I. Evidence of insurability is not required to purchase additional insurance. II. The additions are purchased at net rates without a loading for expenses. A) I only B) II only C) both I and II D) neither […]
Date: September 19th, 2020
Which of the following dividend options, sometimes called the “fifth dividend option,” is not offered by all insurers that sell participating life insurance coverage? A) paid-up additions B) reduction of premiums C) accumulation of dividends at interest D) term insurance ANSWER Answer: D
Date: September 19th, 2020
All of the following are nonforfeiture options found in cash value life insurance policies EXCEPT A) cash value. B) reduction of premiums. C) reduced paid-up insurance. D) extended term insurance. ANSWER Answer: B
Date: September 19th, 2020
Which of the following statements is true regarding an automatic premium loan provision? A) Its purpose is to prevent a policy from lapsing because of nonpayment of premium. B) Interest does not have to be paid on an automatic premium loan. C) If the provision is used, the insured must show evidence of insurability to […]
Date: September 19th, 2020
Which of the following statements about the entire contract clause is true? A) It allows the insurer to change the policy terms without the insured’s consent. B) It specifies that all statements in the application are considered warranties. C) It specifies that the life insurance policy and the attached application constitute the complete agreement between […]
Date: September 19th, 2020
Which of the following is a common dividend option found in a participating life insurance policy? A) reduced paid-up insurance B) fixed period C) paid-up additions D) life income ANSWER Answer: C
Date: September 19th, 2020
Amy purchased a life insurance policy with the intent of committing suicide to pay all the debts that were burdening her family If she commits suicide 9 months after the policy is purchased, and the insurer is able to prove that her death was a suicide, how much will be paid by the insurance company? […]
Date: September 19th, 2020
What major feature distinguishes a participating policy from a nonparticipating policy? A) the availability of a waiver-of-premium provision B) the existence of settlement options C) the payment of dividends D) the method by which beneficiaries can be named ANSWER Answer: C
Date: September 19th, 2020
Which of the following statements about the grace period in a whole life insurance contract is (are) true? I. The purpose of the grace period is to prevent the policy from lapsing by giving the policyowner additional time to pay an overdue premium. II. If the insured dies during the grace period, the death benefit […]
Date: September 19th, 2020
