DC Life Insurance Flashcards

Which DC life insurance settlement option pays the beneficiary a fixed dollar amount each month until the proceeds and interest are exhausted?

Answer: Fixed-amount option

The fixed-amount settlement option pays a specified monthly sum until the principal and earned interest are fully paid out.

Under DC insurance law, a life insurance policy loan taken by the policyowner is subject to which of the following?

Answer: Interest charged by the insurer

Policy loans accrue interest as set by the insurer, and unpaid interest is typically added to the loan balance.

A DC resident purchases a $500,000 life insurance policy and names a minor child as beneficiary. At the insured's death, how are proceeds typically handled?

Answer: Paid to a court-appointed guardian or trustee for the minor

Minors cannot legally receive large sums directly, so proceeds are paid to a court-appointed guardian or trustee on the minor's behalf.

In DC, replacing an existing life insurance policy with a new one requires the agent to:

Answer: Provide the applicant with a Notice Regarding Replacement

DC replacement regulations require the agent to give the applicant a Notice Regarding Replacement so they can make an informed comparison.

Which type of DC life insurance policy is specifically designed to cover two individuals and pays the death benefit only upon the death of the second insured?

Answer: Survivorship life (second-to-die)

Survivorship or second-to-die life insurance covers two people and pays proceeds only after both have died, often used for estate planning.

A DC life insurance agent who twists a policyholder into replacing a policy for the agent's personal gain is committing:

Answer: Twisting

Twisting is the illegal practice of inducing a policyholder to replace coverage through misrepresentation or incomplete comparison to benefit the agent.