All of the following statements about the requirements to reinstate a lapsed life insurance policy are true EXCEPT A) Evidence of insurability is required. B) The lapse must have resulted from other than the surrender of the policy for its cash value. C) All overdue premiums must be paid along with interest from the premium […]
Which of the following statements about beneficiary designations is (are) true? I. The primary beneficiary is entitled to the death proceeds of a life insurance policy only if the contingent beneficiary dies before the insured. II. If a revocable beneficiary designation is used, the insured must obtain the beneficiary’s permission of exercise most policy rights. […]
Alex, age 26, purchased a 20-payment whole life insurance policy. After Alex has made 20 premium payments, his life insurance policy is considered A) matured. B) reduced. C) expired. D) paid-up. ANSWER Answer: D
The difference between the legal reserve of a whole life policy and the face amount of insurance is the A) cash value. B) net amount at risk. C) premium. D) dividend accumulations. ANSWER Answer: B
Which of the following statements is true regarding return of premium term insurance? A) The insurance is free because premiums are refunded at the end of the coverage period. B) Life insurers charge less for this coverage than for regular term insurance that does not include a refund provision. C) The return of premium is […]
Which of the following statements is (are) true regarding the results of the 2014 study by the Life Insurance Market Research Association (LIMRA) on the adequacy of life insurance owned by households in the United States? I. The average household is adequately insured against the risk of premature death. II. The average household is significantly […]
A common use of second-to-die life insurance is A) insuring children. B) insuring “double income with kids” families. C) estate planning. D) insuring key employees of a business. ANSWER Answer: C
Which of the following statements about second-to-die life insurance is (are) true? I. The insurance is a form of endowment coverage. II. The premium is lower than the combined cost of purchasing a life insurance policy on each insured. A) I only B) II only C) both I and II D) neither I nor II […]
Gwen purchased an interesting life insurance policy. A minimum interest rate is guaranteed on the cash value, but additional interest may be credited based on the investment performance of a group of common stocks. There is also a cap on the additional interest credited to the policy. Based on this information, what type of life […]
Which of the following statements about savings bank life insurance is true? A) The maximum amount that a depositor can purchase is $50,000. B) The maximum amount of insurance that a depositor can purchase is limited to the amount of money on deposit in his or her savings account with the savings bank. C) The […]
