On a medical unit, the nurses complain that they have no voice in the decisions that are
made in the operation of the unit. The nurses state they are always told by the nurse
manager to perform tasks instead of being asked. Which of these best describes the
leadership style of the nurse manag...
Which of the following describes a participating insurance policy? - CORRECT
ANSWER-Policyowners are entitled to receive dividends
At what point must a life insurance applicant be informed of their rights that fall under
the Fair Credit Reporting Act? - CORRECT ANSWER-Upon completion of the
application
Dividends payable to a policyowner are: - CORRECT ANSWER-Declared by the
insurance company.
At what point does an informal agreement become a binding contract? - CORRECT
ANSWER-When consideration is provided by one of the parties to the contract
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have - CORRECT ANSWER-Insurable interest in the
proposed insured
Which of the following arrangements allows one to bypass insurable interest laws? -
CORRECT ANSWER-(STOLI) or Investor Originated Life Insurance
Taking receipt of premiums and holding them for the insurance company is an example
of - CORRECT ANSWER-Fiduciary Responsibility
A policy of adhesion can only be modified by whom? - CORRECT ANSWER-The
Insurance Company
The exchange of unequal values reflects: - CORRECT ANSWER-Aleatory
Life and health insurance policies are - CORRECT ANSWER-Unilateral Contracts (one
makes promise, other can only accept by performance
The consideration clause of insurance contract includes - CORRECT ANSWER-The
schedule and amount of premium payments
A life insurance arrangement which circumvents insurable interest values is called -
CORRECT ANSWER-Investor Originated Life Insurance (IOLI)
Who makes the legally enforceable promises in a unilateral contract? - CORRECT
ANSWER-The Insurance Company
, A life insurance policy would be considered a wagering contract WITHOUT: -
CORRECT ANSWER-Insurable Interest
A life insurance policy that provides a policyowner with cash value along with a level
face amount is called: - CORRECT ANSWER-Whole Life Policy
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? -
CORRECT ANSWER-the Policyowner(investor)
K purchased a Life insurance policy in 1986 which paid 10% interest in the early years
of the policy. Twenty years after the purchase, she received a notice from the insurer
stating that the policy will soon terminate unless a much-higher premium is paid
because of falling interest rates. This type of policy is known as: - CORRECT
ANSWER-Universal Life Policy
Which of these would be considered a Limited-Pay-Life policy? - CORRECT ANSWER-
Life Paid Up at Age 70
K is looking to purchase Renewable Term insurance. Which of these types of Term
insurance may be renewable? - CORRECT ANSWER-Level Term Policy (pays same
death benefit if insured dies any time during policy)
A universal life policy is sometimes referred to as an unbundled Life Policy because the
owner can see the interest earned, cost of insurance, and - CORRECT ANSWER-
Expense Charges
What type of insurance offers permanent life coverage with premiums that are payable
for life? - CORRECT ANSWER-Whole Life Policy
Which provision allows the policyowner to change a term life policy to a permanent one
without providing proof of good health? - CORRECT ANSWER-Conversion
When is the face amount of a Whole Life policy paid? - CORRECT ANSWER-When the
insured dies, or the policy's maturity, whichever comes first!
Additional coverage can be added to a Whole Life policy by adding a(n) - CORRECT
ANSWER-Decreasing Term Rider
When a life policy exceeds certain IRS table values, the result would create which of the
following? - CORRECT ANSWER-Modified Endowment Contract (MEC)
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an
automobile accident. How much will the insurance company pay the beneficiary? -
CORRECT ANSWER-$20,000 death benefit.
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