Life Insurance and Annuities Taken by: wamamalex10
Overview 0% Score
1. If M decides to change the beneficiary of his AD&D policy from his son to his
daughter, what steps must he take, and what type of beneficiary designation
will his daughter have if he chooses to make her designation revocable?
Submit a written request to the insurer; her designation will be
irrevocable.
Notify the insurer verbally; her designation will be revocable.
Complete a beneficiary change form; her designation will be
revocable.
No action is needed; her designation will be automatic.
2. A corporation decides to implement a new group life insurance plan where
employees will contribute a portion of their salary towards the premiums. If
the corporation has 100 employees and each employee contributes $50
monthly, what is the total monthly contribution from employees for the
insurance plan?
$2,500
$5,000
$7,500
$10,000
,3. Explain how the premium structure of a Variable Life policy differs from that
of a Whole Life policy.
Variable Life has a fixed premium, while Whole Life has flexible
premiums.
Both policies have fixed premiums, but Variable Life allows for
investment options.
Variable Life has flexible premiums that can vary based on
investment performance, while Whole Life has fixed premiums.
Whole Life policies offer investment options, while Variable Life does
not.
4. Explain the significance of the Consideration clause in an insurance contract
and how it impacts the agreement between the insurer and the policyholder.
It outlines the legal obligations of the insurer only.
It specifies the financial contributions required from the
policyholder.
It details the claims process for the policyholder.
It describes the types of coverage provided by the policy.
5. All of the following are characteristics of Term Insurance, except:
High premium outlay in the early years
No cash or loan value
Can be written separately or with other types of insurance as a rider
Will expire at an attained age or after a specified period of time
6. Explain the significance of the Fair Credit Reporting Act in the context of life
insurance applications. Why is it important for applicants to be informed
about investigations into their reputation?
, It ensures transparency and protects consumer rights.
It allows insurers to deny coverage based on race.
It simplifies the application process for insurers.
It eliminates the need for medical examinations.
7. What is the primary purpose of an annuity in the context of estate
management?
To provide a lump sum payment upon death
To liquidate an estate through recurrent payments
To offer life insurance coverage
To accumulate cash value over time
8. What is a key feature of a Guaranteed Insurability Option rider in life insurance
policies?
It allows for coverage to be increased without evidence of
insurability.
It requires evidence of insurability at all times.
It can only be exercised at the time of policy purchase.
It limits coverage increases to specific dollar amounts.
9. Which of the following statements about Equity Indexed Life Insurance is
true?
The cash value has a guaranteed minimum rate of accumulation.
The cash value can decrease if the equity index performs poorly.
Premiums are fixed and cannot be adjusted based on investment
performance.
, The policyholder has no control over the investment index used.
10. Which one of the following is NOT a mandatory provision in a group life
insurance policy?
Dividends provision.
Misstatement of age provision.
Entire contract provision.
Noncontestability provision.
11. If a mutual insurance company is facing a significant financial challenge, what
role do policyholders play in addressing this issue?
They can vote to change the management team.
They can sell their policies to raise funds.
They can petition state regulators for assistance.
They can elect new board members who may implement changes.
12. Which of the following is a right typically granted to a policyowner in a life
insurance contract?
Change the beneficiary designation
Modify a provision in the insurance contract
Surrender the policy for cash value
Request a loan against the policy's cash value
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller TheAlphanurse. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $16.49. You're not tied to anything after your purchase.
