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PA Life Only State Exam

Terms in this set (51)

Which annunity payout option allows the policyowner to choose a pre-determined number of benefit payments ?
Period certain
Over the course of a year, which premium payment mode is most expensive
monthly
Life insurance policies will normally pay for losses arising from
commercial aviation
Awhole life insurance policy accumulates cash value that becomes
The policy loan value which the insured may borrow
Which of the following are the premium payments for a Universal life policy NOT used for ?
Separate account investments
What is an insurance policy's grace period ?
Period of time after premium is due but the policy remains in force
In Pennsylvania, an insurer may backdate policy issue not more than how many months from the date of a life insurance application?
6 months
What make an insurance policy a unilateral contract?
Only insurer is legally bound
Of the following dividend options, which of these is taxable?
Accumulation at interest
Insurance represents to process of risk
transference
Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident?
Contingency beneficiary
In Pennsylvania, what's the requirement for a minor to receive proceeds from death benefit?
A guardian must be appointed
The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of
Past due premiums that have not been paid by the end of the grace period
An applicant's character and personal habits can be obtained for underwriting purposes from which source?
Investigative consumer report
The deeds and actions of a producer indicate what kind of authority?
apparent
Which of the following is NOT considered advertising?
A rating from a rating service company, such as A.M. Best
A provisions that allows a policy owner to withdraw a policy's cash value interest free is a(n)
Partial surrender
A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n)
nonforfeiture provision
A policyowner may change two policy features on what type of life insurance?
Adjustable Life
Statements made by an insurance applicant on an application are considered to be
representations
Which of these is affected by the frequency of an insurance policy's premium payments ?
Cost
A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a(n)
limited pay policy
Which of these premium payment frequencies is not typically available to a policyowner?
Bi-weekly
How is the cost of a policy affected when policyowner pays premiums more frequently ?
increases
Dorian excercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. When the term insurance expires,
the protection wins
When a licensee's address has changed, who must be notified of this change?
Insurance department
Kris's purchases a 10 year level term life insurance policy that has a death benefit of 200,000. Which of these statements is true?
The face and premium will remain constant over the 10- year period
Underwriters can acquire information from all of the following sources EXCEPT
genetic testing
Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary
Interest only
Holding premium funds for timely submission to the insurer is an example of
acting in a fiduciary capacity
Which of the following is a reinstatement condition?
Proof of insurability
A life insurance policy which contains cash values that very according to its investment performance of stocks is called
Variable Whole Life
Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?
Universal Life policy
A beneficiary change can occur
normally at any time during the policy term
All statements in an insurance application, in the absence of fraud, are considered
representations
An annuitant dies during the distribution period. What kind of annuity will return to a beneficiary the difference between the annuity value and the income payments already made?
Refund annuity
Within how many days must a rollover be completed in order to avoid being taxed as current income?
60 days
The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid
minus indebtedness and without interest
Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy?
$4,000
Within how many days must a producer report to the commissioner any chargers made against him/her
30
Which of these is considered a major tax advantage of life insurance
Income tax is typically not owed on proceeds paid directly to a beneficiary
All of these are valid policy dividend options for a life insurance policy owner EXCEPT
accumulate without interest
Which of the following is present when an applicant stands to lose values if insured dies?
Insurable interest
Which of the following does a life insurance policy summary normally include ?
The policy's cash value
An attending physician's statement would be appropriate for which life insurance purpose?
At the request of the insurer to assist in the underwriting decision
Shirley has a $500,000 10-year non-renewable level term life policy. If she dies 15 years after the policy's inception date, how much will her beneficiary receive?
nothing
Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. His insurance agent told him the policy would be paid up if he reached age 100. The present cash value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be
$500,000
Which of these is NOT considered to be a purpose of an annuity
Annuities are intended to create an estate
What is known as the immediate specific event causing loss and giving rise to risk
peril
Peter has a policy for 80% to 90% of the premium is invested in traditional fix-income for securities and the remainder of the premium is invested in contracts tied to a stipulated stock index what kind of policy is this
Equity index whole life
Tim is covered under a group plan and would like to change his group coverage to an individual policy with the same insurer because of employment termination. Which of these describes the change that will take place?
conversion
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