Life and Health

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Anonymous
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28084
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Life and Health
Updated:
2010-07-28 17:25:52
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Life health
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Life and Health Basics Standard Exam
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  1. For life insurance purposes, all persons are considered to be statistically dead at age

    A. 88
    B. 100
    C. 92
    D. 96
    B. 100
    (this multiple choice question has been scrambled)
  2. When a policyownder borrows money from a bank, a life insurance policy with some cash value accumulation

    A. is not taken into consideration by the bank officials when determining the worth of the individual
    B. cannot be used as collateral because the insured cannot use any cash value until the policy matures
    C. can normally be used as collateral for the loan
    D. is rarely used as collateral for a loan
    C. can normally be used as collateral for the loan
    (this multiple choice question has been scrambled)
  3. Al purchases an estate builder (jumping juvenile) policy for his 5 yr old son, Donald. Suppose that when Donald reaches age 21 his father presents him with the policy as a gift. Which of the following stmts is NOT correct?

    A. the face value of Donald's policy has increased by 5X
    B. Donald has enjoyed protection against the problems of premature death
    C. Donald does not have to continue to make the premium payments to keep the policy
    D. The policy should have accumulated cash value
    C. Donald does not have to continue to make the premium payments to keep the policy
    (this multiple choice question has been scrambled)
  4. Mortality figures are normally developed by studying and interpreting statistics

    A. from small groups of people over 10 yr periods of time
    B. developed from the deaths of milllions of persons over long periods of time
    C. gathered by interviewing many persons in selected cities across the nations
    D. obtained by surveys of insured persons
    B. developed from the deaths of milllions of persons over long periods of time
    (this multiple choice question has been scrambled)
  5. The money paid by the insured to the insurance company for insurance protection is called

    A. benefit
    B. consideration
    C. dividend
    D. assignment
    B. consideration
    (this multiple choice question has been scrambled)
  6. A mother purchases an estate builder (jumping juvenile) policy for her child, with face value of $5000. When the child reaches 21, the face value of the policy would be

    A. $500
    C. $10000
    C. $25000
    D. $50000
    C. $25000
  7. A life insurance policy that continues to provide protection after the premium period has ended is called a

    A. limited pay life policy
    B. decreasing term policy
    C. whole life policy
    D. level term policy
    A. limited pay life policy
    (this multiple choice question has been scrambled)
  8. Which of the following stmts about the average # of people who will die each yr is true

    A. it cannot be used to determine insurance rates
    B. it's called the mortality rate
    C. it cannot be predicted with any accuracy
    D. it is the principal factor in risk selection
    B. it's called the mortality rate
    (this multiple choice question has been scrambled)
  9. Money taken out of a modified endowment contract (MEC)

    A. will result in the policy being voided
    B. is considered to be a return of premium
    C. may be subject to unfavorable tax rules
    D. is always received income-tax free
    C. may be subject to unfavorable tax rules
    (this multiple choice question has been scrambled)
  10. One factor to all estate builder (jumping juvenile) policies is

    A. it is issued on the application of a parent or legal guardian but insures the life of the child
    B. the cash value automatically increases 3x at age 21
    C. after the purchase of the policy, the child is always permitted to purchase additional insurance at age 21, regardless of the insurability at that time.
    D. the original face amount of the policy increases 5X at age 18
    A. it is issued on the application of a parent or legal guardian but insures the life of the child
    (this multiple choice question has been scrambled)
  11. In exchange for consideration, the insurance company in a life insurance contract agrees to pay a specified sum of money

    A. in installments of $100 each
    B. in cash or equivalant premiums paid
    C. in amounts based on the mortality probability of the beneficiary
    D. in cash or equivilant income
    D. in cash or equivilant income
    (this multiple choice question has been scrambled)
  12. A life insurance policy is a unilateral contract because

    A. neither party may default
    B. only the insurance company is bound to live up to its side of the agreement
    C. only the insured is bound to live up to his or her side of the agreement
    D. either party may default
    B. only the insurance company is bound to live up to its side of the agreement
    (this multiple choice question has been scrambled)
  13. To what does the stmt "spreading the result of financial loss created by an individual's death among many ersons, so the cost for each individual is small" refer?

    A. the principal of life insurance
    B. the principle of mortality
    C. the principle of indemnity
    D. the principle of risk
    A. the principal of life insurance
    (this multiple choice question has been scrambled)
  14. In a universal life policy with a guaranteed interest rate of 5% and a current rate of 9%, what would be the dollar amount of the annual policy load generated by not paying excess interest on the first $1000 in the cash value account?

    A. no annual load after the first year
    B. $50
    C. $40
    D. $90
    C. $40
    (this multiple choice question has been scrambled)
  15. In a universal life policy, the two adjustments usually made to the cash value account are

    A. cost of insurance protection is charged and current interest is credited
    B. guaranteed interest is charged and premium is credited
    C. guaranteed interest and current interest are creditied
    D. premium and excess interest are charged
    A. cost of insurance protection is charged and current interest is credited
    (this multiple choice question has been scrambled)
  16. Loan values and retirement income are

    A. available only as part of the business uses of life insurance
    B. available from all life insurance policies
    C. available only from term policies
    D. called the living benefits of life insurance
    D. called the living benefits of life insurance
    (this multiple choice question has been scrambled)
  17. Which of the following policies could be expected to have the lowest premium?

    A. Whole life
    B. 20 pay life
    C. 30 pay life
    D. 15 pay endowment at age 65
    A. Whole life
    (this multiple choice question has been scrambled)
  18. In order to ve valid, a contract must be between individuals considered legally able to enter into an agreement. The principal is known as

    A. competant parties
    B. a contract of utmost good faith
    C. legal purpose
    D. offer and acceptance
    A. competant parties
    (this multiple choice question has been scrambled)
  19. Which of the following normally compromise a deceased's final expense?

    A. education or college fund for the children
    B. medical and funeral expenses plus debts or current bills
    C. the family's future living expense
    D. a home or mtg loan
    B. medical and funeral expenses plus debts or current bills
    (this multiple choice question has been scrambled)
  20. Life insurance is the most practical means of meeting obligations arising from an individual's premature death because

    A. it always provides the most money
    B. it earns the greatest interest
    C. it creates an immediate estate
    D. it is more accessible than savings or stocks
    C. it creates an immediate estate
    (this multiple choice question has been scrambled)
  21. The contract between an insurer and an insured is called a/an

    A. two-soded contract
    B. insurance policy
    C. contract of the entirety
    D. bilateral contract
    B. insurance policy
    (this multiple choice question has been scrambled)
  22. From the standpoint of premium cost, which is the most advantageous age when considering a term policy?

    A. age next birthday
    B. original age
    C. age last birthday
    D. attained age
    B. original age
    (this multiple choice question has been scrambled)
  23. The type of premium for term insurance that remains the same throughout a policy period of more than one year is the

    A. step rate premium and it's used for one-year renewable term policies.
    B. level premium and it's used for one-year renewable term policies.
    C. level premium and it's used for level and decreasing term policies.
    D. step rate premium and it's used for level and decreasing term policies.
    C. level premium and it's used for level and decreasing term policies.
    (this multiple choice question has been scrambled)
  24. The cash value accumulation in a life insurance policy

    A. is taxed as income to the policy owner as it accumulates.
    B. is always so smalls that the policyowner can do little with it.
    C. cannot be used until the policy matures.
    D. can be used for loans or later as retirement income.
    D. can be used for loans or later as retirement income.
    (this multiple choice question has been scrambled)
  25. The type of policy that can be changed from one that does not accumulate cash values to one that does is a

    A. whole life policy.
    B. convertible term policy.
    C. renewable term policy.
    D. level term policy.
    B. convertible term policy.
    (this multiple choice question has been scrambled)
  26. Warren and Wilma have a joint life policy. Warren dies and the policy pays nothing. Later on, Wilma dies and the policy death benefit is paid the the beneficiary. This is called a
    A. convertable term policy.
    B. survivorship or second-to-die policy.
    C. limited pay life policy.
    D. Variable life policy.
    B. survivorship or second-to-die policy.
    (this multiple choice question has been scrambled)
  27. The number of years excluded from the conversion privilege on a convertible term policy

    A. There is no exclusion.
    B. is five years.
    C. varies among insurance companies.
    D. is three years.
    C. varies among insurance companies.
    (this multiple choice question has been scrambled)
  28. The situation below that most likely calls for the purchase of term insurance is

    A. Tanya plans to retire at 59 with enough money to travel abroad.
    B. George has two years of medical school to complete. He and his wife have one child.
    C. Leonard is 42 years old and owns a thriving business. He is married with two teenage children.
    D. Marge, widowed, has one married son, age 30
    B. George has two years of medical school to complete. He and his wife have one child.
    (this multiple choice question has been scrambled)
  29. A policy affording pure protection that diminishes to nothing by the time the policy expires is a

    A. whole life policy.
    B. decreasing term policy.
    C. level term policy.
    D. Limited pay policy.
    B. decreasing term policy.
    (this multiple choice question has been scrambled)
  30. In a family plan

    A. the husband and wife are usually insured for equal amounts.
    B. only the spouse and the children are included.
    C. coverages are customarily a combination of permanent and term insurance.
    D. all family members must have permanent insurance.
    C. coverages are customarily a combination of permanent and term insurance.
    (this multiple choice question has been scrambled)
  31. If children are born or adopted after a family policy is issued,

    A. term insurance will automatically be provided for the child under the same policy.
    B. a new family policy will have to be purchased.
    C. term insurance will be provided under the same policy, but for an additional premium.
    D. coverage will be provided for the child under the same policy, but only after waiting period and proof insurability.
    A. term insurance will automatically be provided for the child under the same policy.
    (this multiple choice question has been scrambled)
  32. A renewable term policy

    A. may be renewed with no proof of insurability.
    B. keeps the same premium with each renewal.
    C. is available only as a rider on a permanent policy.
    D. may be renewed with proof of insurability.
    A. may be renewed with no proof of insurability.
    (this multiple choice question has been scrambled)
  33. All of the following are elements of a contract EXCEPT

    A. legal purpose.
    B. offer and acceptance.
    C. consideration.
    D. assignment.
    D. assignment.
  34. A whole life policy

    A. is paid up at some specific time and endows at 65.
    B. is paid up at some specific time and endows at 100.
    C. requires the insured to pay the premium for life and endows at age 100.
    D. requires a single payment after which coverage is afforded for the whole life of the insured.
    C. requires the insured to pay the premium for life and endows at age 100.
    (this multiple choice question has been scrambled)
  35. A limited pay life policy

    A. is available only for small face amounts.
    B. connot be purchased any longer due to tax law restrictions against it.
    C. requires level premium payments for the entire lifetime of the insured.
    D. requires premium payments for a specified number of years or until a specified age is reached.
    D. requires premium payments for a specified number of years or until a specified age is reached.
    (this multiple choice question has been scrambled)
  36. A variable life policy

    A. cash values are fixed; what varies is the death benefit.
    B. death benefit varies to reflect the investment results of the underlying separate account, but never falls below a guaranteed minimum.
    C. always offers a variable premium.
    D. death benefit is fixed; what varies is the cash values.
    B. death benefit varies to reflect the investment results of the underlying separate account, but never falls below a guaranteed minimum.
    (this multiple choice question has been scrambled)
  37. "Annuity period" refers to which of the following?

    A. The proccess of determining the amount of the annuity payment.
    B. The time during which payments are made to the annuitant.
    C. The time during which premiums are paid to fund the annuity.
    D. The principal factor in determining the annuity premiums.
    B. The time during which payments are made to the annuitant.
    (this multiple choice question has been scrambled)
  38. One of the greatest advantages of a convertible and renewable term policies is that

    A. they are considerably less expensive than other term policies.
    B. these features are automatically included in all term policies.
    C. they accumulate cash values.
    D. the insured isn't required to show proof of insurability in order to renew or convert.
    D. the insured isn't required to show proof of insurability in order to renew or convert.
    (this multiple choice question has been scrambled)
  39. At age 35, Kerry purchases a home with a 20 year mortgage that he wants to cover with term insurance. The most practical term policy for his situation is

    A. convertable term.
    B. decreasing term.
    C. one-year renewable term.
    D. level term.
    B. decreasing term.
    (this multiple choice question has been scrambled)
  40. When the cash value account of a universal life policy reaches zero, the policyowner must make a premium payment or

    A. the policy is indefinitaly suspended.
    B. nothing happens because the cash value account can never reach zero.
    C. the policy goes into the grace period.
    D. the policy is lapsed.
    C. the policy goes into the grace period.
    (this multiple choice question has been scrambled)
  41. The premium for a yearly renewable term policy is a

    A. decreasing premium.
    B. step rate premium.
    C. variable premium.
    D. level premium.
    B. step rate premium.
    (this multiple choice question has been scrambled)
  42. When the cash value accumulation of a policy equals the face amount, we can say the policy

    A. expires.
    B. is a whole life policy.
    C. endows.
    D. is a limited pay life policy.
    C. endows.
    (this multiple choice question has been scrambled)
  43. Term insurance differs from permanent insurance in that term

    A. insurancer repays money to a living insured.
    B. builds no cash value, pays a death benefit only.
    C. builds cash value but pays no death benefit.
    D. has a higher premium per $1,000 of insurance.
    B. builds no cash value, pays a death benefit only
    (this multiple choice question has been scrambled)
  44. The type of policy that is paid up after a specified period of years and endows at age 100 is a/an

    A. endowment policy.
    B. whole life policy.
    C. single premium policy.
    D. limited pay policy.
    D. limited pay policy.
    (this multiple choice question has been scrambled)
  45. When converting a term policy to a whole life policy at attained age, the cash values at age 65 will be

    A. higher than if ordinary life had been purchased at original age.
    B. exactly the same as if ordinary life had been purchased at original age.
    C. practically the same as if ordinary life had been purchased at original age.
    D. lower than if ordinary life had been purchased at original age.
    D. lower than if ordinary life had been purchased at original age
    (this multiple choice question has been scrambled)
  46. A level term policy is one on which

    A. protection remains level while the premium is decreased.
    B. the premium and the protection remain constant for the term of the policy.
    C. protection remains constant for the term of the policy while the premium increases.
    D. the premium remains the same as the protection is reduced.
    B. the premium and the protection remain constant for the term of the policy.
    (this multiple choice question has been scrambled)
  47. A family income rider differs from a decreasing term rider in that the family income rider

    A. pays an annual income during a specified number of years from the time of the insured's death.
    B. pays a lump sum upon the death of the insured.
    C. always costs less.
    D. pays monthly income upon the death of the insured.
    D. pays monthly income upon the death of the insured.
    (this multiple choice question has been scrambled)
  48. An annuitant has a temporary annuity certain, and dies shortly after the payments start but before the certain period of 10 years has elapsed.Any mony remaing is

    A. kept by the company.
    B. paid to the beneficiary in one lump sum.
    C. paid to the beneficiary for the rest of the certain period.
    D. paid to the annuitant's estate.
    C. paid to the beneficiary for the rest of the certain period.
    (this multiple choice question has been scrambled)
  49. A family income policy is comprised of

    A. permanent plus decreasing term insurance.
    B. term insurance only.
    C. permanent plus increasing term insurance.
    D. permanent insurance only.
    A. permanent plus decreasing term insurance.
    (this multiple choice question has been scrambled)
  50. A straight line annuity pays a periodic income

    A. during the annuitant's lifetime with no refund upon his/her death.
    B. to two annuitants until one dies, after which all payments are cease.
    C. guaranteed to be equal to the purchase price of the annuity.
    D. with a guaranteed total amount to be paid either to the annuitant or the beneficiary.
    A. during the annuitant's lifetime with no refund upon his/her death.
    (this multiple choice question has been scrambled)

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