Life Insurance Policy Procedures and Features, Exams of Nursing

Download Life Insurance Policy Procedures and Features and more Exams Nursing in PDF only on Docsity! NJ PSI ADVANCED EXAM QUESTIONS WITH CORRECT ANSWER all of the following are ownership rights EXCEPT: A: changing the beneficiary of the policy B: borrowing funds against cash value C: switching the policy from on insured to another D: assigning all of the rights of the policy to another person - CORRECT ANSWER -C: switching the policy from on insured to another which of the following is characteristic of a non qualified plan: A: defined vesting schedule B: plan established by the employer C: plan does not meet federal guidelines for tax benefits D: employer contributions are deductible business expense - CORRECT ANSWER -C: plan does not meet federal guidelines for tax benefits How do warranties differ from representations? A: a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge B: a representation is guaranteed to be true, a warranty is believed to be true to the best of one's knowledge C: a warranty is issued by the insurer, a representation is a statement provided by the applicant D: an incorrect representation automatically voids a contract, whereas an incorrect warranty must be proven - CORRECT ANSWER -A: a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge in which of the following must a beneficiary change request be filed in writing to the insurer and is made effective by the insurance company: A: designation option B: recording method C: endorsement method D: succession of beneficiaries - CORRECT ANSWER -B: recording method all of the following are required signature on a life insurance application EXCEPT: A: the agent B: the applicant C: the minor in a juvenile policy D: the proposed insured - CORRECT ANSWER -C: the minor in a juvenile policy all of the following are features of the spendthrift clause EXCEPT: A: proceeds are paid in some other way than a single premium B: proceeds are protected by the insurer from the beneficiary's creditors C: transfer of proceeds to creditors D: the beneficiary may encumber the proceeds - CORRECT ANSWER -D: the beneficiary may encumber the proceeds Which type of annuity attempts to offset inflation by providing a benefit linked to an underlying investment account: A: deferred B: fixed C: immediate D: variable - CORRECT ANSWER -D: variable in order to AVOID being classified as an MEC, a policy must pass which of the following: A: five-pay test B: seven-pay test C: policy loan test D: accelerated benefits test - CORRECT ANSWER -B: seven-pay test all of the following are common exclusions from loss found in disability income policies EXCEPT for that incurred while: A: living overseas B: serving in the military C: committing a misdemeanor D: piloting a persona aircraft - CORRECT ANSWER -C: committing a misdemeanor which part of an insurance contract contains the promise to pay losses covered by the policy in exchange for the insured's premium and compliance with policy terms: A: conditions B: policy title page C: insuring clause D: definitions - CORRECT ANSWER -C: insuring clause what is the order in which beneficiaries receive proceeds from a life insurance policy: A: classification of beneficiaries B: line of beneficiaries C: progression of beneficiaries D: succession of beneficiaries - CORRECT ANSWER -D: succession of beneficiaries all of the following are TRUE regarding incomplete applications EXCEPT: A: the underwriting departments will return the application to the agent B: the applicant will have to wait additional time before coverage C: there will be a delay in the underwriting process D: the incomplete application can be accepted with the missing information added later - CORRECT ANSWER -D: the incomplete application can be accepted with the missing information added later which of the following occurs immediately after the application is submitted and the initial premium paid: A: the underwriting process begins B: the applicant's references are checked C: the beneficiaries are selected D: the insurance goes into effect - CORRECT ANSWER -A: the underwriting process begins why is accidental death benefit referred to as double indemnity: A: it provides for both the actual death as well as other losses form the accident B: it provides twice the face value in the policy for death due to accident C: the beneficiaries have twice the amount of time to provide proof of loss D:the beneficiaries must provide proof of death due to multiple causes - CORRECT ANSWER -B: it provides twice the face value in the policy for death due to accident what producer is used by an insurer to protect itself in the event a dispute arises and the applicant and the agent do not recall the changes that were made in completed application: A: the applicant and possibly the agent initial any changes made B: the applicant and the agent sign a document that outlines the changes made C: an arbitration agreement is signed at the time of the signing of the application D: all changes must be approved by the underwriter prior to the submission of the application - CORRECT ANSWER -A: the applicant and possibly the agent initial any changes made which annuity settlement option provides a stated monthly amount to the annuitant and upon the annuitant's death the same or lesser amount paid for the lifetime of the survivor: A: joint life option B: joint and survivorship option C: life annuity certain option D: refund life annuity option - CORRECT ANSWER -B: joint and survivorship option which of the following is common in an increasing term life policy: A: insurance protection decreases over time B: the premium increases over time C: it begins with little or no insurance protection D: it is used as mortgage credit insurance - CORRECT ANSWER -C: it begins with little or no insurance protection all of the following are tax qualified retirement plans except: A: keogh B: 401 (k) C: section 529 plan D: SEP - CORRECT ANSWER -C: section 529 plan all of the following are classifications of risks EXCEPT: A: substandard B: preferred C: declined C: death benefit D: maximum age of the insured - CORRECT ANSWER -C: death benefit all of life insurance and health insurance contracts contain all of the following EXCEPT: A: policy face B: insuring clause C: conditions D: representations - CORRECT ANSWER -D: representations which of the following is an example of a premium payment mode: A: annual premium payment B: payment by check C: automatic deduction of premium D: $200 per policy year - CORRECT ANSWER -A: annual premium payment what type of insurance should a company purchase if it wants to insure the life of its CEO: A: key person insurance B: BOE insurance C: group life policy D: industrial policy - CORRECT ANSWER -A: key person insurance which of the following is TURE of the limited pay whole life policy: A: coverage ends when the policy is paid up B: coverage continues after the policy is paid up C: premium payments increase as the insured ages D: premium payments are lower than continuous premium whole life - CORRECT ANSWER -B: coverage continues after the policy is paid up which of the following is exempted form the incontestability provision in insurance policies: A: fraudulent misstatements B: pre-existing conditions C: change in health D: changes in the insurance code - CORRECT ANSWER -A: fraudulent misstatements which type of policy is backed by equity investments and allows the policy holder to adjust the death benefit: A: term life B: variable life C: regular whole life D: variable universal life - CORRECT ANSWER -D: variable universal life what is the purpose of Stranger-originated life insurance (STOLI): A: the policy is originated primarily or solely for the purpose of resale B: the policy is written so as to avoid of insurable interest C: it is a method of insuring a person who has been previously declined D: it is a fraudulent policy meant for financial gain of someone unknown to the insured - CORRECT ANSWER -A: the policy is originated primarily or solely for the purpose of resale what is common approach to addressing the problems inherent in naming a minor as a beneficiary to a life insurance policy: A: using class designations B: using contingent beneficiaries C: naming the estate as the beneficiary D: establishing a trust to administer proceeds - CORRECT ANSWER -D: establishing a trust to administer proceeds obtaining consumer information reports under false pretenses is prosecutable by which of the following: A: USA patriot act B: Fair credit reporting act C: state law where the applicant resides D: securities and exchange commission - CORRECT ANSWER -B: Fair credit reporting act whole life policy premium type is the most common: A: continuous premium B: non-participating C: limited payment D: single premium - CORRECT ANSWER -A: continuous premium under the misstatement of age provision, what happens if it is determined at death that the insured's age or gender misstated on a life insurance policy application: A: if the application is considered fraudulent and no benefits are paid out B: the proceeds of the policy must be determined by a probate court proceeding C: if the death is two years after the originally policy purchase, complete benefits are paid out D: benefits are adjusted to an amount that the premium would have purchased at the correct age or gender - CORRECT ANSWER -D: benefits are adjusted to an amount that the premium would have purchased at the correct age or gender an insured and the beneficiary are both killed in a fatal accident. which provision presumes the insured survived the beneficiary: