Exam (elaborations)
CMI 3358 FINAL (1).
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Exam of 18 pages for the course Capa Test Questions at Capa Test Questions (CMI 3358 FINAL (1).)
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Delaware Life InsuranceWhat is the benefit of choosing extended term as a nonforfeiture option? - ANS-It has
the highest amount of insurance protection
Upon the death of the insured, the primary beneficiary discovers that the insured chose
the interest only settlement option. What does this mean? - ANS-The beneficiary will
only receive payments of the interest earned on the death benefit
If a life insurance policy has an irrevocable beneficiary designation, - ANS-the
beneficiary can only be changed with written permission of the beneficiary
Which of the following terms means a result of calculation based on the average
number of months the insured is projected to live due to medical history and mortality
factors - ANS-life expectancy
Which is NOT true about beneficiary designations? - ANS-The beneficiary must have
insurable interest in the insured.
which of the following is true regarding taxation of dividends in participating policies? -
ANS-dividends are not taxable
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken
within a certain period of time, and proof of insurability is provided. Which policy
provision allows this? - ANS-reinstatement provision
Which of the following allows the insurer to relieve a minor insured from premium
payments if the minor's parent have died or become disabled? - ANS-payor benefit
The policyowner wants to make sure that upon his death, the life policy will pay a
portion of the proceeds annually to his spouse, but that the principal will be paid to their
children when they reach a certain age. Which settlement option should the policyowner
choose? - ANS-interest only option
a prospective insured receives a conditional receipt but dies before the policy is issued.
the insurer will - ANS-pay the policy proceeds only if it would have issued the policy
a domestic insurer issuing variable contracts must establish one or more -
ANS-separate accounts
,Which life insurance settlement option guarantees payments for the lifetime of the
recipient, but also specifies a guaranteed period, during which, if the original recipient
dies, the payments will continue to a designated beneficiary? - ANS-Life income with
period certain
within how many days of requesting an investigative consumer report must an insurer
notify the consumer in writing that the report will be obtained? - ANS-3 days
when a life insurance policy was issued, the policyowner designated a primary and a
contingent beneficiary.
Several years later, both the insured and the primary beneficiary died in the same car
accident, and it was impossible to determine who died first.
Which of the following would receive the death benefit? - ANS-the insured's contingent
beneficiary
which of the following is TRUE regarding the premium in term policies? - ANS-the
premium is level
all of the following are examples of third-party ownership of a life insurance policy
EXCEPT - ANS-an insured borrows money from the bank and makes a collateral
assignment of a part of the death benefit to secure the loan
which of the following types of policies will provide permanent protection? - ANS-whole
life
The type of settlement option which pays throughout the lifetimes of two or more
beneficiaries is called - ANS-joint and survivor
which of the following is NOT true regarding equity indexed annuities - ANS-they earn
lower interest rates than fixed annuities
An insured purchased a 10-year level term life policy that is guaranteed renewable and
convertible. What happens at the end of the 10-year term? - ANS-the insured may
renew the policy for another 10 years, but at a higher premium rate
all of the following are true regarding the guaranteed insurability rider EXCEPT -
ANS-The rider is available to all insured
, which of the following terms is used to name the nontaxed return of unused premiums?
- ANS-dividend
when an insured under a life insurance policy dies, the designated beneficiary received
the face amount of the policy as well as a refund of all of the premiums paid. which rider
is attached to policy? - ANS-return of premium
the ownership provision entitles the policyowner to do all of the following EXCEPT -
ANS-set premium rates
which of the following is the best reason to purchase life insurance rather than
annuities? - ANS-to create an estate
which of the following determines the cash value of a variable life policy? - ANS-the
performances of the policy portfolio
which of the following is TRUE about the 10-day free-look period in a life insurance
policy? - ANS-it begins when the policy is delivered
which of the following riders would NOT cause the death benefit to increase? -
ANS-payor benefit rider
If the annuitant dies during the accumulation period, who will receive the annuity
benefits? - ANS-beneficiary
contracts that are prepared by one party and submitted to the other party on a
take-it-or-leave it basis are classified as - ANS-contracts of adhesion
If a beneficiary wants a guarantee that benefits paid from principal and interest would be
paid for a period of 10 years before being exhausted, what settlement option should the
beneficiary select? - ANS-fixed period
if a policy includes a free-look period of at least 10 days, the buyer's guide may be
delivered to the applicant - ANS-with the policy
which of the following is a generic consumer publication that explains life insurance in
general terms in order to assist the applicant in the decision making process? -
ANS-Buyer's guide
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