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Rob, Joe, and Mike are brothers who have a $60,000 "first-to-die" Joint life policy covering all three of their lives. If Joe dies first, the policy proceeds

A.

will not provide further insurance protection.

B.

must be shared equally by Rob and Joe's wife.

C.

will accumulate with interest until another brother dies and then be awarded to the surviving brother.

D.

must be awarded to Joe's estate.

Upon annuitization, which of the following will have the HIGHEST monthly payout?

A.

Straight life with guaranteed payments.

B.

Joint life.

C.

Straight life.

D.

Joint and survivor life.

Which rider would allow additional insurance to be purchased at specified dates or events, without additional underwriting?

A.

Guaranteed renewability.

B.

Guaranteed insurability.

C.

Cost of living.

D.

Disability income.

Which of the following statements BEST describes a single premium cash value policy?

A.

It requires only one payment to make the policy paid up.

B.

It provides for only one premium to be paid without evidence of insurability.

C.

It waives one future premium if the owner becomes disabled.

D.

It requires the policyowner to pay one premium annually.

An insured has a 5-year Renewable Term Life Insurance Policy. Upon exercising the renewable privilege, the Insured MUST

A.

provide evidence of insurability.

B.

renew for at least 10 years.

C.

pay an annual premium that may be higher.

D.

convert to a whole life policy.

Which of the following represents a syndicate of underwriters that specialize in Insuring specific types of risk?

A.

reciprocal insurer

B.

Lloyd's association

C.

risk retention group

D.

fraternal benefit society

Interest earned on a Traditional IRA is taxed

A.

prior to contribution.

B.

during the accumulation period.

C.

at distribution.

D.

only if there is a premature distribution.

A modified endowment contract (MEC) receives different tax treatment on pre-death distributions than other life Insurance policies because the modified endowment policy

A.

has a larger cash surrender value.

B.

generally pays dividends to the policyowner.

C.

tends to be an investment vehicle.

D.

does not provide for loans to the policyowner.

If an Insured under a life insurance policy dies with an outstanding loan balance then the death benefit

will

A.

be reduced by the amount of the loan and interest owed.

B.

not be paid until the loan is repaid.

C.

be paid less the amount of the loan but not the interest.

D.

be paid less the amount of the loan interest but not the principal.

In reference to life Insurance in contract law, a person MOST likely will have an insurable interest in insuring a person's life If

A.

the interest exists at the time of death.

B.

the interest exists at the time of application.

C.

any type of distant family relationship exists with the insured party.

D.

any type of business relationship exists between the insured party and the beneficiary.