Insurance MCQ

When must an insurer provide a policy summary? A. When the application is taken B. When the policy is delivered C. Within 10 days of policy delivery D. Within 30 days of policy delivery Answer: B. When the policy is delivered

Using a class designation for beneficiaries means A. Not naming beneficiaries B. Naming an estate as the beneficiary C. Naming each beneficiary by his or her name D. Naming beneficiaries as a group Answer: D. Naming beneficiaries as a group

The policyowner of a life insurance policy forgets to pay his monthly premium and dies 10 days later. Which of the following is true? A. The policy will pay full death benefits, less the premiums that were due, in addition to a penalty B. The policy will not pay death benefits C. The policy will pay full death benefits, less the premiums that were due D. The policy will pay full death benefits Answer: C. The policy will pay full death benefits, less the premiums that were due

What happens to policy coverage during the grace period? A. The coverage can be effective retroactively once the past-due premiums are paid B. The insured is covered as he/she was before the grace period C. The insured is covered partially, compared to the time before the grace period D. The insured is not covered Answer: B. The insured is covered as he/she was before the grace period

What describes a ledger or proposal used to show both guaranteed and non-guaranteed elements of the policy? A. Outline of coverage B. Portioning illustration C. Basic illustration D. Ledger proposals Answer: C. Basic illustration

Life insurance policy illustration rules apply to which of the following types of policies? A. Whole life insurance B. Variable life insurance C. Individual annuity contracts D. Life insurance with a face amount of less than $10,000 Answer: A. Whole life insurance

A Buyer's Guide must be presented A. When a potential applicant inquires about a policy B. When the application is taken C. Anytime before the policy is delivered D. At the time of policy delivery Answer: B. When the application is taken

Who has the right to change the beneficiary in a life insurance policy? A. Any insured under the policy B. Insurer C. Policyowner D. Beneficiary Answer: C. Policyowner

Which correctly describes the facility of payment clause that is found in group life insurance policies? A. It can only be paid to immediate family members B. It does not apply to all group polices, only cash value policies C. It must be a minimum of $5,000 payable to any person to cover funeral expenses D. It must be a benefit up to $1,000 payable to any person to cover funeral expenses or medical expenses Answer: D. It must be a benefit up to $1,000 payable to any person to cover funeral expenses or medical expenses

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance? A. Reinstatement rule B. Conversion rule C. Disclosure rule D. Replacement rule Answer: D. Replacement rule

The Interstate Insurance Product Regulation Compact is a contract between A. Reciprocal states B. Insurers and insureds C. Member states D. Commissioner of Insurance in different states Answer: C. Member states

Who does the Interstate Insurance Product Regulation Compact serve? A. NAIC B. Insurers B. Insureds D. Commissioner Answer: B. Insurers

Producers are required to comply with strict regulations when advising senior consumers about annuities. Which of the following would be considered a senior consumer? A. Any person qualified for Medicare B. Any person age 65 or older C. Any person age 60 or older D. Any person qualified for Social Security Answer: B. Any person age 65 or older

Which of the following is FALSE regarding the life insurance replacement rules? A. Replacement policies must have a 30-day free look B. The existing insurer must be notified of the proposed replacement transaction within 5 business days of receipt of the application C. The replacing insurer must verify that all required forms are completed and received with the application D. Replacement forms must be kept on file for 7 years Answer: D. Replacement forms must be kept on file for 7 years

An insured innocently omitted a health problem in her life insurance application that would have influenced her premium amounts. The policy is issued, and the insurer discovers the error 3 years later. Which of the following will most likely happen? A. The premium amounts will remained unchanged B. The policy will be cancelled C. the premium will be adjusted, and it will apply retroactively, meaning that she will have to pay the difference in premium amounts for the last 3 years D. The policy will be changed, an although she will not have to pay any extra retroactive premium fees, she will have to pay a penalty Answer: A. The premium amounts will remained unchanged

No individual life insurance policy may be contested after it has been in force for A. 1 year B. 2 years C. 3 years D. 5 years Answer: B. 2 years

What is the grace period of a life insurance policy? A. 10 days B. 15 days C. 20 days D. 31 days Answer: D. 31 days

An illustration used to sell a life insurance policy must be labeled as A. Illustration do not need labels B. Life Insurance Illustration C. General Insurance Illustration D. Example Illustration Answer: B. Life Insurance Illustration

All of the following are true regarding the Policy Summary EXCEPT A. The policy summary is required to be given at policy delivery if the insurer did not provide a policy illustration B. The policy summary may only describe the guaranteed elements of the policy C. The policy summary may show dividends D. The policy summary must show the annual premiums for the first 20 years Answer: C. The policy summary may show dividends

Which of the following has the right to transfer ownership of a life insurance policy to another person? A. All insureds under the policy B. Government C. Insurer D. Policyowner Answer: D. Policyowner