Stranger-oriented life insurance policies are in direct opposition to the principle of
a. law of large numbers
b. good faith
c. indemnity
d. insurable
... [Show More] interest - ANSWER d. insurable interest-STOLI purchaser doesn't know the
insured, or have any interest in the insured's longevity, so it violates the principle of insurable
interest
Which is generally true regarding insureds who have earned preferred status?
a. they keep a higher percentage of any interest earned on their policies
b. their premiums are lower
c. they can barrow higher amounts off of their policies
d. they can decide when to pay their monthly premiums - ANSWER b. their premiums are
lower- the insured is in excellent physical condition and employs healthy lifestyles and habits
All of the following statements concerning the use of life insurance as an Executive Bonus are
correct EXCEPT:
a. the employer pays a bonus to a selected employee to fund to policy
b. it is considered a non qualified employee benefit.
c. the policy is owned by the company
d. any type of insurance policy may be used. - ANSWER c. the policy is owned by the
company.
An insured receives a monthly summary for his life insurance policy. He notices that the cash
value of the policy is significantly lower this month than it was last month. What type of
policy does the insured have?
a. variable
b. term
c. securities
d. stock - ANSWER a. variable- life policies vary in value, as the name suggests, because the
value is based on the stocks that support the policy. If a policyholder wants a more stable,
reliable value, he/she should invest in a fixed policy.
When an employer offers to give an employee a wage increase in the amount of the premium
on a new life insurance policy, this is called
a. aleatory contract
b. executive bonus
c. key person
d. a fraternal association - ANSWER b. executive bonus
In terms of Social Security, what is the interval spanning between the day when the youngest
child of a family turns 16 and before the surviving spouse may receive retirement benefits? -
ANSWER Blackout period- begins when the youngest child reaches the age of 16, and ends
when the surviving spouse qualifies for retirement benefits, as early as age 60. No benefits are
paid during this time.
Life insurance may be used to pay state inheritance taxes and federal estate taxes so that it is
not necessary to sell off assets from the estate to pay these costs. This is called
a. estate conservation
b. estate creation
c. survivor protection
d. survivorship insurnce - ANSWER a. estate conservation- life insurance may be used to pay
state inheritance taxes and federal estate taxes so that it is not necessary to sell off assets
from the estate to pay these costs. This is called estate conservation.
Which of the following applicants could the insurer charge a higher rate and not be charge
with unfair discrimination?
a. an applicant that was born in another country
b. an applicant who is legally blind
c. an applicant who has been a victim of domestic abuse
d. an applicant that smokes cigarettes as opposed to one that does not - ANSWER d. an [Show Less]