Exam (elaborations)

INS 3303 Life Insurance Exam 2 Ch 9 11-19 22 (INS3303)

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Harvard University

Exam (elaborations) INS 3303 Life Insurance Exam 2 Ch 9 11-19 22 (INS3303) A policy that originally is not a modified endowment contract will be subject to re-testing if there is a "material change" in the contract. Which of the following would likely be a material change? Answer Selected An...

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INS 3303 Life Insurance Exam 2 Ch 9
•
11-19 22
A policy that originally is not a modified endowment contract will be subject
to re-testing if there is a "material change" in the contract. Which of the
following would likely be a material change?
Answer

Selected
Answer:
Increases in death benefits because of premiums paid for the
policy to support the first seven contract years of benefits.
Correct
Answer:
An exchange of one policy for another policy in a 1035
exchange.
• Question 2
0 out of 5 points

A policy that automatically increases the death benefit without evidence of
insurability will typically violate the MEC rules.
Answer
Selected Answer:
True
Correct Answer:
False
• Question 3
5 out of 5 points

A modified endowment contract is a life insurance policy that has failed
Answer

Selected Answer:

the seven-pay test
Correct Answer:

the seven-pay test
• Question 4
5 out of 5 points

Which item is not a key factor to be weighed in choosing the best variable life
or variable universal life policy?
Answer

Selected Answer:

the amount of the cash value guarantees
Correct Answer:

the amount of the cash value guarantees
• Question 5
5 out of 5 points

Which of the following could never be treated as a modified endowment
contract?

, Answer

Selected
Answer:
A single-premium policy that was entered into on June 1,
1988.
Correct Answer:

A single-premium policy that was entered into on June 1,
1988.
• Question 6
0 out of 5 points

All universal life policies have a guaranteed minimum interest rate, generally
ranging from four to six percent.
Answer
Selected Answer:
False
Correct Answer:
True
• Question 7
0 out of 5 points

Once a policy is classified as a modified endowment contract, with certain
corrections, it can be later treated as not a modified endowment contract.
Answer
Selected Answer:
True
Correct Answer:
False
• Question 8
0 out of 5 points

Variable life or variable universal life insurance is well-suited to individuals
desiring a minimum basic level of coverage.
Answer
Selected Answer:
True
Correct Answer:
False
• Question 9
5 out of 5 points

Variable life is a whole life policy where the policyowners bear all investment
risk.
Answer
Selected Answer:
True
Correct Answer:
True
• Question 10
5 out of 5 points

One disadvantage of universal life is that policy owners bear more risk of
adverse trends in mortality or expenses than if they owned traditional whole

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