Question 1

The premium rates for a(n) _____ policy, a type of whole life insurance policy, are based on the assumption that the insured will live to an advanced age (such as age ninety or 100).

Accepted Answer

The answer of The premium rates for a(n) _____ policy,...

Question 2

Which of the following life insurances is usually offered as a supplement to a separate program of group term benefits?

Accepted Answer

The answer of Which of the following life insurances is...

Question 3

Payment plans have several methods for death proceeds.In _____ method, there is even distribution of the proceeds over the life of the beneficiary, with continued distribution to his or her beneficiary at the same or reduced level.

Accepted Answer

The joint life income method involves distributing the death proceeds evenly over the life of the beneficiary, and upon their death, the distribution continues to their beneficiary at the same or a reduced level. This ensures a steady income stream for the primary beneficiary and their successor.

Question 4

_____ allows the insured to demonstrate insurability periodically, perhaps every five years, and qualify for a new (lower) select category of rates that are not initially loaded for adverse selection.

Accepted Answer

The answer of _____ allows the insured to demonstrate insurability...

Question 5

The purchase of most life insurance policies is motivated primarily by a need for death protection.Which of the following can be cited as an exception to this general rule?

Accepted Answer

Single-premium life insurance is an exception because it is often purchased not primarily for death protection but as an investment or savings vehicle, where a lump sum is paid upfront to immediately create a cash value.

Question 6

A whole life policy guarantees that a policyholder who decides to cancel the policy can either take cash for the surrender (cash) value or continue the policy in force as extended term insurance and paid-up insurance.What are these provisions are called?

Accepted Answer

Nonforfeiture options are provisions in a life insurance policy that provide the policyholder with choices on what can be done with the policy's cash value if the policy is cancelled or lapses. These options typically include taking the cash surrender value, converting the policy into extended term insurance, or converting it into a paid-up policy for a reduced amount.

Question 7

Term policies are often not renewable beyond age sixty-five or seventy because of _____ that increases with age.

Accepted Answer

The answer of Term policies are often not renewable beyond...

Question 8

Which of the following provisions provides that the beneficiary must survive the insured by a specified period of time or must be alive at the time of payment to be entitled to the proceeds?

Accepted Answer

The common disaster provision is designed to address situations where the insured and the beneficiary die in the same event or within a short period of time. It stipulates that the beneficiary must survive the insured by a specified period (often 30 or 60 days) to be entitled to the proceeds. If the beneficiary does not survive the insured by this period, the proceeds are paid as if the beneficiary had predeceased the insured, typically to the contingent beneficiary or the insured's estate.

Question 9

The difference between cash income and outflow in universal life becomes a new contribution to (or deduction from) the _____ account.

Accepted Answer

The answer of The difference between cash income and outflow...

Question 10

Which of the following provisions helps the insurer avoid litigation about who is entitled to policy benefits, and protects the insurer from paying twice?

Accepted Answer

Assignment allows the policy owner to transfer the ownership rights of the policy to another party, which can help avoid disputes over who is entitled to the benefits and protect the insurer from the risk of paying the benefits twice to different claimants.

Question 11

Payment plans have several methods for death proceeds.Which method is characterized by an even distribution of the proceeds until depleted?

Accepted Answer

The fixed amount method distributes the death proceeds in equal installments until the entire amount is depleted.

Question 12

The nonpayment of premium, accumulation to avoid lapse, and automatic premium loans sections apply to which of the following life policies?

Accepted Answer

Whole life policies have features like nonpayment of premium options, accumulation to avoid lapse, and automatic premium loans.

Question 13

Assume that the conditions of the survivorship clause are not fulfilled in a particular scenario.Which of the following beneficiaries would receive the proceeds from the policy?

Accepted Answer

When the conditions of the survivorship clause are not fulfilled, the proceeds from the policy go to the contingent beneficiary. This is because the primary beneficiary is either unavailable or unable to accept the proceeds, making the contingent beneficiary the next in line to receive the benefits.

Question 14

The purpose of the _____ provision is to enable the owner of the policy to designate to whom the proceeds shall be paid when the insured dies.

Accepted Answer

The "payment of benefits" provision allows the policy owner to designate the beneficiary or beneficiaries who will receive the proceeds of the policy upon the death of the insured, ensuring that the funds go to the intended parties.

Question 15

Which of the following riders is also known as double indemnity?

Accepted Answer

Accidental death benefit is also known as double indemnity because it pays an additional sum to the beneficiary if the insured's death is accidental, effectively doubling the policy's payout.

Question 16

Beginning in the 1950s, insurers began to refer to the accumulated funds of level premium life insurance policies as _____ that could meet various savings needs.

Accepted Answer

The answer of Beginning in the 1950s, insurers began to...

Question 17

Payment plans have several methods for death proceeds.In the life income method:

Accepted Answer

In the life income method, the death proceeds are distributed evenly over the life of the beneficiary, ensuring a steady income stream for the remainder of their life. This method provides financial security by guaranteeing income for as long as the beneficiary lives.

Question 18

Which of the following plans in group term life insurance allows employees to increase life insurance based on their individual needs and are subject to insurability evidence to avoid adverse selection?

Accepted Answer

Supplemental plans in group term life insurance allow employees to increase their life insurance coverage based on individual needs, often requiring evidence of insurability to prevent adverse selection. This ensures that the insurance provider is not disproportionately covering individuals with higher risks without appropriate premium adjustments.

Question 19

Which of the following beneficiary designations can be changed only with the consent of the beneficiary?

Accepted Answer

Irrevocable beneficiary designations require the consent of the beneficiary to be changed because the policyholder gives up the right to make changes without the beneficiary's agreement.

Question 20

_____ life insurance contracts were introduced to the market in 1979 to bolster the profits of stock insurance companies.

Accepted Answer

The answer of _____ life insurance contracts were introduced to...

Quiz 19: Mortality Risk Management: Individual Life Insurance and Group Life Insurance