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Life Insurance Exam.pdf, Exams of Nursing

Staffordshire University Nursing

Life Insurance Exams 2024 Q&A 2

Typology: Exams

2024/2025

Available from 11/18/2024

TatumAbrams 🇺🇸

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Life Insurance Exam-Illinois 150

Questions With 100% Correct

Answers 2024 Passed.

Pooling of Risks - ANSWER >>>A large group of people contribute money

to a fund out of which their losses can be paid

Policyowner - ANSWER >>>is the person or org that applies for the policy

and pays the premium

Actuarial Tables - ANSWER >>>Are statistical tables that are used when

calculating premium rates and mortality loss reserves

Life Insurance Policies transfer: - ANSWER >>>financial risks of

premature death on a defined amount

Loss of income - ANSWER >>>the face amount of life insurance is

determined as a multiple of income

Life annuity - ANSWER >>>contract which is issued by a life insurance

company protects an individual against the financial risk of outliving a

normal life expectancy according to the mortality actuarial tables and

running out of money in old age

Life annuity - ANSWER >>>guarantees monthly income benefits to the

annuitant for the rest of his/her life no matter how long he/she lives

Insurable interest - ANSWER >>>a person must be in a position where

he/she will lose money should loss occur only at the time the policy is

issued

Who must have insurable interest? - ANSWER >>>the policy owner;

he/she will lose money should hte insured die prematurely

tax qualified plans - ANSWER >>>contributions can be deducted

Partial preview of the text

Download Life Insurance Exam.pdf and more Exams Nursing in PDF only on Docsity!

Life Insurance Exam-Illinois 150

Questions With 100% Correct

Answers 2024 Passed.

Pooling of Risks - ANSWER >>>A large group of people contribute money to a fund out of which their losses can be paid Policyowner - ANSWER >>>is the person or org that applies for the policy and pays the premium Actuarial Tables - ANSWER >>>Are statistical tables that are used when calculating premium rates and mortality loss reserves Life Insurance Policies transfer: - ANSWER >>>financial risks of premature death on a defined amount Loss of income - ANSWER >>>the face amount of life insurance is determined as a multiple of income Life annuity - ANSWER >>>contract which is issued by a life insurance company protects an individual against the financial risk of outliving a normal life expectancy according to the mortality actuarial tables and running out of money in old age Life annuity - ANSWER >>>guarantees monthly income benefits to the annuitant for the rest of his/her life no matter how long he/she lives Insurable interest - ANSWER >>>a person must be in a position where he/she will lose money should loss occur only at the time the policy is issued Who must have insurable interest? - ANSWER >>>the policy owner; he/she will lose money should hte insured die prematurely tax qualified plans - ANSWER >>>contributions can be deducted

non qualified plans - ANSWER >>>contributions cannot be deducted tax deferred plans - ANSWER >>>tax on the interest and/or earnings is postponed as it compounds and accumulates until it is withdrawn tax free - ANSWER >>>no tax on benefits cost basis - ANSWER >>>total contributions made to the plan Tax: premiums paid on individual life insurance policies... - ANSWER

cannot be deducted (non-qualified) Tax: the benefits paid to the beneficiary at the insured's death... - ANSWER >>>is usually not taxed (tax free) Participating policy - ANSWER >>>pays a dividend Tax: dividends paid to the policyowner on participating policies... - ANSWER >>>are usually not taxed (tax free) Modified Endowment Contract - ANSWER >>>The IRS has written rules that define when a life insurance policy does not have a real, valid life insurance purpose and is in substance an investment or savings plan guarantees monthly income benefits to the annuitant for the rest of his/her life no matter how long he/she lives Insurable interest - ANSWER >>>a person must be in a position where he/she will lose money should loss occur only at the time the policy is issued Who must have insurable interest? - ANSWER >>>the policy owner; he/she will lose money should hte insured die prematurely tax qualified plans - ANSWER >>>contributions can be deducted non qualified plans - ANSWER >>>contributions cannot be deducted tax deferred plans - ANSWER >>>tax on the interest and/or earnings is postponed as it compounds and accumulates until it is withdrawn tax free - ANSWER >>>no tax on benefits cost basis - ANSWER >>>total contributions made to the plan Tax: premiums paid on individual life insurance policies... - ANSWER >>>cannot be deducted (non-qualified) Tax: the benefits paid to the beneficiary at the insured's death... - ANSWER >>>is usually not taxed (tax free) Participating policy - ANSWER >>>pays a dividend Tax: dividends paid to the policyowner on participating policies... - ANSWER >>>are usually not taxed (tax free) Modified Endowment Contract - ANSWER >>>The IRS has written rules that define when a life insurance policy does not have a real, valid life insurance purpose and is in substance an investment or savings plan If a cash value life insurance policy does not have a valid life insurance purpose, the IRS classifies it as a - ANSWER >>>modified endowment contract Underwriter - ANSWER >>>is an insurance company employee who reviews applications and additional information and decides whether the applicant is acceptable and what the correct premium rate should be Application includes (7 items) - ANSWER >>>age, sex, occupation, dangerous recreational activities, aviation, smoking, agent's report Medical reports can be (3 items) - ANSWER >>>health questionare, paramedic examiner's report, and physician's report

Incontestability Clause - ANSWER >>>required by law-provides that after the policy has been in effect two years, the insurance company cannot contest the policy due to any misstatement or concealment on application Application complete, premium paid, receipt issued. When does policy go into effect? - ANSWER >>>Immediately upon completion of the application subject to the condition that the underwriter would have found the insured acceptable at the premium rate paid No premium paid, no receipt issued. When does policy go into effect? - ANSWER >>>1. when the policy has been personally delivered

insured signs Statement of Continuing Good Health
Premium is paid Paid by check but dies before check clears, applicant is... - ANSWER

covered Conditional Receipt - ANSWER >>>temporary coverage from date of application to the date policy delivers subject to the condition that the underwriter would have found the applicant acceptable at the premium rate paid Temporary insurance agreement or - ANSWER >>>interim term insurance Temporary insurance agreement - ANSWER >>>provides temporary term life insurance coverage from the date of application until the date the insured wants a permanent policy to take effect Ten day free look provision - ANSWER >>>required by law, 10 days from date of receiving the policy and allows policyowner to read the policy over

required by law-provides that after the policy has been in effect two years, the insurance company cannot contest the policy due to any misstatement or concealment on application Application complete, premium paid, receipt issued. When does policy go into effect? - ANSWER >>>Immediately upon completion of the application subject to the condition that the underwriter would have found the insured acceptable at the premium rate paid No premium paid, no receipt issued. When does policy go into effect? - ANSWER >>>1. when the policy has been personally delivered 2. insured signs Statement of Continuing Good Health 3. Premium is paid Paid by check but dies before check clears, applicant is... - ANSWER >>>covered Conditional Receipt - ANSWER >>>temporary coverage from date of application to the date policy delivers subject to the condition that the underwriter would have found the applicant acceptable at the premium rate paid Temporary insurance agreement or - ANSWER >>>interim term insurance Temporary insurance agreement - ANSWER >>>provides temporary term life insurance coverage from the date of application until the date the insured wants a permanent policy to take effect Ten day free look provision - ANSWER >>>required by law, 10 days from date of receiving the policy and allows policyowner to read the policy over and return it to the insurance company for a full premium refund without giving a reason USA patriot act - ANSWER >>>federal law to protect US from terrorists and to prevent money-laundry of funds; requires financial institutions including insurance companies to clearly identify owners of financial institution accounts; reported to US department of treasury

The National Do Not Call List - ANSWER >>>Federal law; sell by telemarketing must remove names that have been added to the list every 31 days Dangerous Recreational Activities and Aviation are - ANSWER

warranted statements Dangerous Recreational Activities and Aviation exclusion does - ANSWER coverage is exluded while the insured is engaged in the excluded dangerous recreation activity or is flying as something other than a fare paying passenger on a commercial airline If truthfully answers no to Dangerous Recreational Activities and Aviation questions but later engages in this... - ANSWER >>>the insurance company cannot rate up or add exclusions to the policy after the policy has been issued Graded premiums are also called - ANSWER >>>modified premiums Graded premiums - ANSWER >>>offer a low premium rate for an initial specified period; premiums increase by a specific amount at specific intervals Graded Benefits - ANSWER >>>no benefits or low benefits for the initial period, benefits increase by specified amounts at specified intervals until they equal face amount

federal law to protect US from terrorists and to prevent money-laundry of funds; requires financial institutions including insurance companies to clearly identify owners of financial institution accounts; reported to US department of treasury The National Do Not Call List - ANSWER >>>Federal law; sell by telemarketing must remove names that have been added to the list every 31 days Dangerous Recreational Activities and Aviation are - ANSWER >>>warranted statements Dangerous Recreational Activities and Aviation exclusion does - ANSWER >>>coverage is exluded while the insured is engaged in the excluded dangerous recreation activity or is flying as something other than a fare paying passenger on a commercial airline If truthfully answers no to Dangerous Recreational Activities and Aviation questions but later engages in this... - ANSWER >>>the insurance company cannot rate up or add exclusions to the policy after the policy has been issued Graded premiums are also called - ANSWER >>>modified premiums Graded premiums - ANSWER >>>offer a low premium rate for an initial specified period; premiums increase by a specific amount at specific intervals Graded Benefits - ANSWER >>>no benefits or low benefits for the initial period, benefits increase by specified amounts at specified intervals until they equal face amount Misstatement of Age Provision - ANSWER >>>misstatement of age or sex so as to pay too low premium, the insurance company can reduce benefits to what they would usually provide for a person of the insured's actual age and sex at the premium rate that the insured has been paying Misstatement of Age Provision lasts - ANSWER >>>as long as the policy is active (even after 2 years) Purpose of Misstatement of Age Provision - ANSWER >>>is to allow the insurance company to issue the policy without proof of age or sex Guaranteed Insurability Rider - ANSWER >>>if added for extra premium charge, guarantees the insured the right to purchase additional insurance

Adjustable life premium payments... - ANSWER >>>can be increased or decreased as long as it equals or exceeds minimum premium stated in the policy Endowment - ANSWER >>>has a level premium rate during life of policy and has a level amount of life insurance coverage until maturity which is prior to age 100 Level Term Life insurance - ANSWER >>>it provides a level amount of life insurance protection for a specified period of time; it is usually convertable Level term life insurance-short term plans - ANSWER >>>1 year and 5 year plans usually can be renewed for successive terms up to a stated age. there is no evidence of insurability; the insured pays the premium rate for his/her age at time of renewal Level term life insurance-long term plans - ANSWER >>>10 year and longer plans usually cannot be renewed Decreasing Term Life Insurance - ANSWER >>>it provides a decreasing amount of life insurance protection for a specified period of time Family income plan - ANSWER >>>it is a whole life policy with a decreasing term rider Family Maintenance plan - ANSWER >>>it is a whole life policy with a level term rider Family Life insurance plan - ANSWER >>>a family life insurance plan provides life insurance protection on everyone in the family. It provides life insurance on the husband, if there is a husband; life insurance protection on the wife, if there is a wife; and, life insurance protection on the children if there are children Term Life Rider covering the spouse terminates when - ANSWER >>>the primary insured achieves age 65 If the primary insured dies prior to his/her age 65... - ANSWER >>>the term life rider covering the spouse is paid up at the primary insured's death until the primary insured would have been age 65

It provides automatic Term Life insurance on each child - ANSWER

the premium on the child rider is determined entirely by the face amount that the insured selects on each child; no additional premium per child; no health questions Jumping Juvenile provision - ANSWER >>>coverage terminates and is convertible to up to 5 times face amount usually at the primary insured's age 65 or the child's age 25 Universal Life - ANSWER >>>the cash value interest rate varies from year to year, but is guaranteed to not drop below a minimum guaranteed rate To sell universal life requires - ANSWER >>>a life insurance producer license Variable Life - ANSWER >>>the life insurance death benefit and cash value growth rate varies according to the performance of either a specified portfolio of securities managed by the insurance company or a security market index or another economic index The purpose of variable life - ANSWER >>>is to keep a person at least equal to, if not ahead of, the annual increase in cost of living (inflation) Insurance company must keep variable life premiums and cash value investments in - ANSWER >>>a separate (segregated) fund Variable life insurance requires - ANSWER >>>both a life insurance producer license and a security representative license Business Life Insurance-Key Employee - ANSWER >>>It is life insurance purchased on the life of a key business employee; the business is both the policyowner and the beneficiary Key employee purpose is - ANSWER >>>to keep the business going at the death of the key employee Tax: Key employee premiums - ANSWER >>>cannot be tax deducted (tax free)

Variable annuties - ANSWER >>>contributions are used to purchase accumulation units; at pay-out accumulation units are converted to annuity units the goal of variable annuities - ANSWER >>>is to provide the policyowner and annuitant a rate of return that at least equals if not exceeds the annual increase in the cost of living (inflation) The insurance company must keep variable annuity premiums and investments in - ANSWER >>>a separate (segregated) fund Variable annuities require - ANSWER >>>security representative license and life insurance producer license Equity Investments - ANSWER >>>is an investment in corporate stocks Equity Indexed Investments - ANSWER >>>is an investment linked to a stock market index Equity indexed investments credit policy owners - ANSWER

contributions plus interest Equity indexed investments guarantees - ANSWER >>>a percentage of contributions Equity indexed investments must be kept - ANSWER >>>in a separate (segregated) fund Equity indexed investments require - ANSWER >>>life insurance producer license Fixed annuities interest rates - ANSWER >>>are fixed periodically and is guaranteed not to drop below a minimum stated rate Fixed annuities monthly income benefit amount paid - ANSWER >>>is fixed the entire time the benefits are paid Fixed annuities require - ANSWER >>>life insurance producer license

Fixed period (Period certain) if the annuitant dies before the fixed period of payments have been paid... - ANSWER >>>benefit payments will continue at the annuitant's death to the beneficiary for the remainder of the fixed period Fixed Amount (Amount certain) if the annuitant dies before the total account balance has been paid... - ANSWER >>>then at the annuitant's death monthly benefit payments will continue to the beneficiary until the total account balance has been paid out (tax) if an annuity is purchased or added as a rider the premiums usually...

ANSWER >>>cannot be tax deducted (non qualified) (tax) when the monthly annuity income benefits are paid to the annuitant - ANSWER >>>part is considered a return on cash basis no tax (tax free) part is considered gain subject to tax Individual Retirement Account (IRA) - ANSWER >>>may contribute up to 100% of earned income and additional catch up contributions may be made by individuals over age 50 A plan established by an eligible person for a non-working spouse - ANSWER >>>same contribution rules apply to the worker plan also apply to the spousal IRA plan (tax) contributions can - ANSWER >>>sometimes be tax deducted (tax qualified) Tax on earnings and/or interest is usually postponed until they are withdrawn (tax deferred) Tax Sheltered Annuities (TSA or 403b) - ANSWER >>>may be established by non-profit educational, religious, or medical organizations for the benefit of their employees TSAs are paid for by - ANSWER >>>the employer/sponsor payroll deducts the employee's contributions (Tax) contributions to TSA plans can - ANSWER >>>usually be tax deducted (tax qualified) tax on interest, earnings and gains is usually postponed until they are withdrawn (tax deferred)

Premium Payment Clause - ANSWER >>>the first premium must be paid in advance to an office or agent of the insurance company Accelerated Benefit Provision - ANSWER >>>is sometimes included and allows the insured to receive part of the policy face amount while still alive; also called a living benefit provision Long-term Care rider - ANSWER >>>allows the insured person while alive to collect up to a specified portion of the life insurance face amount to pay nursing home expenses A Viatical Arrangement - ANSWER >>>individual or org buys a life insurance policy from a terminally ill insured person for a sum of money less than face amount Viatical arrangement is also known as - ANSWER >>>Life settlements Viator - ANSWER >>>is the insured who is transferring the life policy to the viatical settlement provider Owner's Rights (6 items) - ANSWER >>>1. name and change beneficiaries unless an irrevocable beneficiary has been named

select a settlement option
select a dividend option (participating policies only)
borrow against the policy (cash vale policies only)
surrender the policy and exercise a nonforfeiture option (cash vale policies only)
assign the policy (transfer) Suicide Clause - ANSWER >>>during the first two years if an insured commits suicide the insurance company is required to refund the premiums that have been paid after two years the insurance company will pay the full face amount death benefits Nonforfeiture options - ANSWER >>>the policyowner may select when a cash value policy is terminated and surrendered prior to maturity

premium not paid, policy not surrendered, the policy will - ANSWER

terminate due to nonpayment of premium and becomes classified as lapsed when policy automatically goes into a nonforfeiture option it is usuallly - ANSWER >>>extended term insurance The purpose of the grace period is - ANSWER >>>to avoid unintended lapse of the policy Reinstatement provision - ANSWER >>>allows reinstatement of a lapsed policy usually within 3 years of the lapse and requires all back premiums and interest to be repaid Automatic Premium Loan Provision must be - ANSWER >>>sufficient loan value to pay the entire premium due Policy change provision - ANSWER >>>states no changes are effective unless signed by an officer of the insurance company Policy change provision allows the owner to convert to - ANSWER >>>any policy with a higher premium rate per $1000 face amount Participating policies pay dividends out of - ANSWER >>>surplus; only if the insurance company has a surplus and are never guaranteed Applied to purchase paid up additional amounts of insurance - ANSWER is the automatic dividend option if the policy owner fails to select one (tax) dividends - ANSWER >>>no tax on dividends (tax free) Participating policies are most often sold by - ANSWER >>>mutual insurance companies Settlement options when insured is still alive - ANSWER >>>the policyowner has the first right to select the settlement option Settlement options when insured is dead without specifying - ANSWER the beneficiary can select a settlement option

Life Insurance Exam.pdf, Exams of Nursing

Related documents

Partial preview of the text

Download Life Insurance Exam.pdf and more Exams Nursing in PDF only on Docsity!

Life Insurance Exam-Illinois 150

Questions With 100% Correct

Answers 2024 Passed.