Life and Health

  1. For life insurance purposes, all persons are considered to be statistically dead at age

    B. 100
  2. When a policyownder borrows money from a bank, a life insurance policy with some cash value accumulation

    C. can normally be used as collateral for the loan
  3. Al purchases an estate builder (jumping juvenile) policy for his 5 yr old son, Donald. Suppose that when Donald reaches age 21 his father presents him with the policy as a gift. Which of the following stmts is NOT correct?

    D. Donald does not have to continue to make the premium payments to keep the policy
  4. Mortality figures are normally developed by studying and interpreting statistics

    D. developed from the deaths of milllions of persons over long periods of time
  5. The money paid by the insured to the insurance company for insurance protection is called

    C. consideration
  6. A mother purchases an estate builder (jumping juvenile) policy for her child, with face value of $5000. When the child reaches 21, the face value of the policy would be

    A. $500
    C. $10000
    C. $25000
    D. $50000
    C. $25000
  7. A life insurance policy that continues to provide protection after the premium period has ended is called a

    D. limited pay life policy
  8. Which of the following stmts about the average # of people who will die each yr is true

    C. it's called the mortality rate
  9. Money taken out of a modified endowment contract (MEC)

    B. may be subject to unfavorable tax rules
  10. One factor to all estate builder (jumping juvenile) policies is

    D. it is issued on the application of a parent or legal guardian but insures the life of the child
  11. In exchange for consideration, the insurance company in a life insurance contract agrees to pay a specified sum of money

    A. in cash or equivilant income
  12. A life insurance policy is a unilateral contract because

    B. only the insurance company is bound to live up to its side of the agreement
  13. To what does the stmt "spreading the result of financial loss created by an individual's death among many ersons, so the cost for each individual is small" refer?

    A. the principal of life insurance
  14. In a universal life policy with a guaranteed interest rate of 5% and a current rate of 9%, what would be the dollar amount of the annual policy load generated by not paying excess interest on the first $1000 in the cash value account?

    A. $40
  15. In a universal life policy, the two adjustments usually made to the cash value account are

    D. cost of insurance protection is charged and current interest is credited
  16. Loan values and retirement income are

    D. called the living benefits of life insurance
  17. Which of the following policies could be expected to have the lowest premium?

    D. Whole life
  18. In order to ve valid, a contract must be between individuals considered legally able to enter into an agreement. The principal is known as

    D. competant parties
  19. Which of the following normally compromise a deceased's final expense?

    C. medical and funeral expenses plus debts or current bills
  20. Life insurance is the most practical means of meeting obligations arising from an individual's premature death because

    D. it creates an immediate estate
  21. The contract between an insurer and an insured is called a/an

    C. insurance policy
  22. From the standpoint of premium cost, which is the most advantageous age when considering a term policy?

    A. original age
  23. The type of premium for term insurance that remains the same throughout a policy period of more than one year is the

    A. level premium and it's used for level and decreasing term policies.
  24. The cash value accumulation in a life insurance policy

    A. can be used for loans or later as retirement income.
  25. The type of policy that can be changed from one that does not accumulate cash values to one that does is a

    C. convertible term policy.
  26. Warren and Wilma have a joint life policy. Warren dies and the policy pays nothing. Later on, Wilma dies and the policy death benefit is paid the the beneficiary. This is called a

    D. survivorship or second-to-die policy.
  27. The number of years excluded from the conversion privilege on a convertible term policy

    A. varies among insurance companies.
  28. The situation below that most likely calls for the purchase of term insurance is

    D. George has two years of medical school to complete. He and his wife have one child.
  29. A policy affording pure protection that diminishes to nothing by the time the policy expires is a

    D. decreasing term policy.
  30. In a family plan

    C. coverages are customarily a combination of permanent and term insurance.
  31. If children are born or adopted after a family policy is issued,

    A. term insurance will automatically be provided for the child under the same policy.
  32. A renewable term policy

    D. may be renewed with no proof of insurability.
  33. All of the following are elements of a contract EXCEPT

    A. legal purpose.
    B. offer and acceptance.
    C. consideration.
    D. assignment.
    D. assignment.
  34. A whole life policy

    C. requires the insured to pay the premium for life and endows at age 100.
  35. A limited pay life policy

    D. requires premium payments for a specified number of years or until a specified age is reached.
  36. A variable life policy

    C. death benefit varies to reflect the investment results of the underlying separate account, but never falls below a guaranteed minimum.
  37. "Annuity period" refers to which of the following?

    D. The time during which payments are made to the annuitant.
  38. One of the greatest advantages of a convertible and renewable term policies is that

    D. the insured isn't required to show proof of insurability in order to renew or convert.
  39. At age 35, Kerry purchases a home with a 20 year mortgage that he wants to cover with term insurance. The most practical term policy for his situation is

    B. decreasing term.
  40. When the cash value account of a universal life policy reaches zero, the policyowner must make a premium payment or

    D. the policy goes into the grace period.
  41. The premium for a yearly renewable term policy is a

    B. step rate premium.
  42. When the cash value accumulation of a policy equals the face amount, we can say the policy

    C. endows.
  43. Term insurance differs from permanent insurance in that term

    A. builds no cash value, pays a death benefit only
  44. The type of policy that is paid up after a specified period of years and endows at age 100 is a/an

    D. limited pay policy.
  45. When converting a term policy to a whole life policy at attained age, the cash values at age 65 will be

    D. lower than if ordinary life had been purchased at original age
  46. A level term policy is one on which

    C. the premium and the protection remain constant for the term of the policy.
  47. A family income rider differs from a decreasing term rider in that the family income rider

    D. pays monthly income upon the death of the insured.
  48. An annuitant has a temporary annuity certain, and dies shortly after the payments start but before the certain period of 10 years has elapsed.Any mony remaing is

    B. paid to the beneficiary for the rest of the certain period.
  49. A family income policy is comprised of

    A. permanent plus decreasing term insurance.
  50. A straight line annuity pays a periodic income

    D. during the annuitant's lifetime with no refund upon his/her death.
Card Set
Life and Health
Life and Health Basics Standard Exam