Skip to main content

Lesson 4 Quiz

The following quiz is provided for your information to help you measure your retention level on the material covered within this lesson. It is not graded. Only the final examination is graded.

Answer or complete each question to the best of your knowledge and click on the "Check your answer" button. If your answer is incorrect, you will be instructed where to find the correct answer. It is not necessary to repeat the quiz if you exit this page; however, your answers will not be saved once you exit. This feature is provided for future practice purposes.

1
Primary Factors in Premium Calculations

Actuaries calculate the cost of the premiums required on a continuous basis until maturity by using an assumed:

a)
b)
c)
d)
CORRECTTRY AGAIN (Lesson 4.1)Your answer has been saved.
Check your answer

2

belong(s) to the insurer, whereas belong(s) to the policyowner.


Word bank: Cash Value, Policy Reserves

Policy Reserves belong(s) to the insurer, whereas Cash Value belong(s) to the policyowner.

Lesson 4.1.4 Check your answer

3

The is an intangible amount that is set aside by the insurer out of the insurer's assets at the beginning of the policy period, whereas the is basically a savings account that develops within the policy that builds through premium payments and belongs to the policyowner.


Word bank: cash value, policy reserve

The policy reserve is an intangible amount that is set aside by the insurer out of the insurer's assets at the beginning of the policy period, whereas the cash value is basically a savings account that develops within the policy that builds through premium payments and belongs to the policyowner.

Lesson 4.1.4 Check your answer

4

Which of the following are principal factors utilized to determine premium rates?

a)
b)
c)
d)
e)
f)
CORRECTTRY AGAIN (Lesson 4.1.5)Your answer has been saved.
Check your answer

5
Policy Proceeds and Settlement Options

Settlement of the policy takes place when death claim benefits are paid out to the beneficiary(ies) through one of several different venues. Match the following settlement options with their respective definitions.

a)
b)
c)
d)
e)
f)
a) Lump Sum b) Income for Life c) Interest Only d) Joint Life Income e) Installment Payments f) Accelerated Benefits (Lesson 4.2)
Check your answer

6

When a life insurance policy beneficiary opts to receive interest only payments, the insurance company can pay a _____________ interest rate than the pre-established minimum rate.

a)
b)
c)
d)
CORRECTTRY AGAIN (Lesson 4.2.2)Your answer has been saved.
Check your answer

7

A viatical settlement sales agent must be licensed as a life agent.

a)
b)
CORRECTTRY AGAIN (Lesson 4.2.5)Your answer has been saved.
Check your answer

8
Tax Treatment of Proceeds

Whenever a policy terminates for any reason other than a death benefit, any excess income over the cost basis is . Death benefits paid under a life insurance policy to a named beneficiary are .


Word bank: tax free, taxable

Whenever a policy terminates for any reason other than a death benefit, any excess income over the cost basis is taxable. Death benefits paid under a life insurance policy to a named beneficiary are tax free.

Lesson 4.3Check your answer

9

As long as the equity remains in the life insurance policy and continues to accumulate, the cash value remains . Once it is surrendered, the equity is considered .


Word bank: tax free, taxable income

As long as the equity remains in the life insurance policy and continues to accumulate, the cash value remains tax free. Once it is surrendered, the equity is considered taxable income.

Lesson 4.3Check your answer

10

IRS Section 1035 policy exchanges are allowed if:

a)
b)
c)
d)
CORRECTTRY AGAIN (Lesson 4.3)Your answer has been saved.
Check your answer

11
Beneficiaries

Life insurance proceeds when paid to the policy beneficiary are protected from creditors since those benefits are not subject to the claims of the insured's creditors.

a)
b)
CORRECTTRY AGAIN (Lesson 4.4)Your answer has been saved.
Check your answer

12

If a policyowner fails to designate a life insurance policy beneficiary, the proceeds of the policy go to the:

a)
b)
c)
d)
CORRECTTRY AGAIN (Lesson 4.5.2)Your answer has been saved.
Check your answer

13

A life insurance policy cannot be contested by the policy beneficiaries.

a)
b)
CORRECTTRY AGAIN (Lesson 4.5.3)Your answer has been saved.
Check your answer

14

Death proceeds from an insurance policy are divided equally among the named beneficiaries. If a named beneficiary is deceased, his or her share then goes to the living descendants of that individual - this is called the method. Death proceeds from an insurance policy are divided equally among the living primary beneficiaries - this is called the method.


Word bank: Per Capita, Per Stirpes

Death proceeds from an insurance policy are divided equally among the named beneficiaries. If a named beneficiary is deceased, his or her share then goes to the living descendants of that individual - this is called the Per Stirpes method. Death proceeds from an insurance policy are divided equally among the living primary beneficiaries - this is called the Per Capita method.

Lessons 4.6.1, 4.6.2Check your answer

15

The ________________ designation means that the beneficiary cannot be changed without the named beneficiary's permission.

a)
b)
c)
d)
CORRECTTRY AGAIN (Lesson 4.6.5)Your answer has been saved.
Check your answer

16
Special Situations

The states when an insured and beneficiary die at the same time, it is presumed that the insured survived the beneficiary. The is designed to provide an alternative beneficiary in the event that the insured as well as the original beneficiary die as the result of a common accident.


Word bank: Common Disaster Provision, Simultaneous Death Act

The Simultaneous Death Act states when an insured and beneficiary die at the same time, it is presumed that the insured survived the beneficiary. The Common Disaster Provision is designed to provide an alternative beneficiary in the event that the insured as well as the original beneficiary die as the result of a common accident.

Lessons 4.7.1, 4.7.2Check your answer

17

The question "Have you made your policies creditor-proof for your beneficiaries?" refers to which of the following?

a)
b)
c)
d)
CORRECTTRY AGAIN (Lesson 4.7.3)Your answer has been saved.
Check your answer

18
Definitions

Match the following with their respective definitions.

a)
b)
c)
d)
e)
a) Cash Value b) Policy Reserves c) 1035 Exchange d) Accelerated Benefits e) Premium Factors CONGRATULATIONS on completing Lesson 4. Now complete Florida study manual Units 7 and 8 Questions for Review.
Check your answer