[SVL] Insurance 03

In life insurance contracts, when must insurable interest exist?
A. Only at the time the policy is purchased
B. Only at the time that the loss occurs
C. At the time the policy is purchased and at the time the loss occurs
D. It does not need to exist in life insurance contracts

Which of the following is NOT a personal use of life insurance?
A. Third party ownership
B. Cash accumulation
C. Mortgage payoff
D. Estate creation

The assets left behind after an individual's death is known as
A. an estate
B. financial obligations
C. debt
D. liquidity

The preretirement period, one of the distinct income needs periods, is also known as the
A. blackout period
B. cash needs period
C. expense period
D. family dependency period

Which of the following states the purpose of life insurance is to replace the economic value of an individual?
A. The human life value principle
B. The income needs principle
C. The needs approach
D. The business needs approach

In a buy-sell agreement, the life insurance policy is written on the
A. business
B. business owner's life
C. family of the business owner
D. person who will buy the business in the event that the owner dies

Life insurance premiums are lowest under which premium payment mode?
A. Annual
B. Semi-annual
C. Monthly
D. Quarterly

The number of individuals who die each year at a given age is also known as
A. actuaries
B. morbidity
C. mortality
D. expenses

Living and death benefits, level premiums, and lifetime coverage are characteristics of which of the following classes of insurance?
A. Home service life insurance
B. Permanent life insurance
C. Term life insurance
D. Industrial life insurance

Which of the following factors does NOT have an effect on the insurance premium rates?
A. Expenses
B. Mortality or morbidity
C. Producer certification
D. Interest rates

Which of the following types of insurance has premiums that are due weekly and are collected in person by producers who go door to door?
A. Term life insurance
B. Industrial life insurance
C. Home service life insurance
D. Permanent life insurance

Which of the following describes an employer that agrees to pay an employee a stated amount of income beginning at retirement rather than paying them the money now?
A. Executive bonus plan
B. Buy sell agreement
C. Key person coverage
D. Deferred compensation plan

All of the following are examples of buy-sell agreements EXCEPT
A. entity plan
B. executive bonus plan
C. stock redemption plan
D. cross-purchase plan

All of the following are examples of an insurable
interest EXCEPT
A. Sue would like to buy a life insurance policy on her spouse
B. Amy would like to buy a life insurance policy on her business partner
C. Tom would like to buy life insurance on his best friend
D. Michael and Megan would like to buy a life insurance policy for each of their children

Which of the following terms refers to how easily an asset can be turned into cash without loss of value?
A. Estate conservation
B. Hard assets
C. Estate creation
D. Liquidity

When the owner of a life insurance policy is not the insured, there are three parties to the contract. Which of the following is not a party to this type of contract?
A. Applicant
B. Insured
C. Beneficiary
D. Insurer

Which of the following classes of life insurance has a death benefit only, increasing premiums temporary coverage and expires at end of the term?
A. Term life insurance
B. Variable life insurance
C. Home service life insurance
D. Permanent life insurance

Which of the following premiums is the mortality element minus the interest element?
A. Net premium
B. Loaded premium
C. Fixed premium
D. Gross premium

All of the following are names of distinct income need periods EXCEPT
A. social security
B. retirement
C. preretirement
D. family dependency