Life Insurance Flashcards
7 cards from real EXAMFX practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Life Insurance flashcards as text
Which type of annuity makes a guaranteed income payment for a set number of years regardless of whether the annuitant is alive?
Answer: Period certain annuity
A period certain annuity guarantees payments for a fixed number of years; if the annuitant dies before the period ends, payments continue to the named beneficiary for the remainder of the period.
An insurance producer who offers a client a portion of their commission as an inducement to purchase a policy is engaging in:
Answer: Rebating
Rebating is the illegal practice of offering prospects or policyholders any inducement to purchase insurance that is not specified in the policy, including sharing commissions.
Under the family income policy, how are income payments structured after the insured's death?
Answer: Monthly income is paid from the date of death to the end of the income period, then the face amount is paid
A family income policy combines whole life with decreasing term; upon the insured's death, monthly income payments are made until the end of the selected period, after which the base whole life face amount is paid.
What does 'substandard' mean in life insurance underwriting?
Answer: The applicant is insurable but at a higher-than-standard premium due to elevated risk
A substandard (or rated) risk is an applicant who presents greater-than-average mortality risk and is offered coverage at a higher premium or with exclusions rather than being declined entirely.
A life insurance policy issued without a medical examination is called a:
Answer: All of the above can describe policies issued without a physical exam
Guaranteed issue, simplified issue, and non-medical are all terms used for policies issued without a full medical examination, differing in the amount of health information required.
Which of the following riders would pay the premiums on a child's life insurance policy if the parent/payor dies or becomes disabled?
Answer: Payor benefit rider
The payor benefit rider waives future premiums on a juvenile policy if the premium-paying parent or guardian dies or becomes totally disabled before the insured child reaches a specified age.
When computing the net premium for a life insurance policy, which of the following factors is NOT considered?
Answer: Operating expenses of the insurer
The net premium is calculated using only mortality rates and investment interest assumptions; operating expenses (loading) are added separately to arrive at the gross premium charged to policyowners.