CLU Life Insurance Legal Aspects 4

Question 1

Under the simultaneous death (Uniform Simultaneous Death Act) presumption, if an insured and primary beneficiary die in a common disaster with no evidence of survivorship, death proceeds are distributed as if:

Accepted Answer

The beneficiary predeceased the insured

Answer

The Uniform Simultaneous Death Act presumes the beneficiary predeceased the insured when survivorship cannot be established, so proceeds pass through the insured's estate.

Question 2

The 'slayer rule' in life insurance law provides that:

Accepted Answer

A beneficiary who feloniously kills the insured forfeits the right to receive policy proceeds

Answer

The slayer rule bars a person who intentionally and feloniously kills the insured from benefiting from the death, with proceeds typically passing to the contingent beneficiary or estate.

Question 3

Which of the following best describes the legal effect of a collateral assignment of a life insurance policy?

Accepted Answer

Transfers specific policy rights to a creditor as loan security, with remaining rights reverting upon loan repayment

Answer

A collateral assignment temporarily transfers certain policy rights (primarily the death benefit up to the loan balance) to a creditor as security, and rights revert to the policyowner when the debt is repaid.

Question 4

Under ERISA, which type of life insurance plan is typically exempt from ERISA's fiduciary and reporting requirements?

Accepted Answer

Voluntary payroll-deduction plans meeting the 'safe harbor' requirements

Answer

ERISA's 'safe harbor' exempts voluntary employee-pay-all payroll-deduction group insurance plans where the employer has minimal involvement and receives no consideration.

Question 5

The parol evidence rule in life insurance contract law generally prevents courts from admitting:

Accepted Answer

Oral statements made by the agent before the policy was issued to contradict clear written policy terms

Answer

The parol evidence rule bars introduction of prior oral or written negotiations to vary or contradict the terms of a fully integrated written contract such as a delivered insurance policy.

CLU - Chartered Life Underwriter Practice Test

CLU - Chartered Life Underwriter Practice Test

CLU Life Insurance Legal Aspects 4