11. A term insurance which allows the policyowners to convert it to a permanent insurance within a specified period without evidence of insurability contains features:
*
a. convertibility
b. renewability
c. dividend option
d. both a & b
12. The main difference between a term plan and a permanent plan is
*
a. permanent plans provide both protection and savings while term plans offer protection only
b. permanent plans provides savings and dividends while term plans provide savings only
c. permanent plans can be converted and renewed while term plans cannot
d. all of the above
13. If an insured is disabled and his life insurance policy is being continued in force through the waiver of premium, the dividends of the policy would
*
a. cease
b. continue at reduced rate
c. continue as if the owner is paying the premium
d. continue but they would be applied toward the premium being waived
14. Since the purchase of life insurance is a voluntary choice, the individual must meet
*
a. comprehensive inspection report
b. certain standards of health and occupation
c. minimum income requirement
d. all of the above
15. Which of the following factors would have the least effect on the premium charged for life insurance
*
a. age
b. occupation
c. income
d. all of the above
16. Anti-selection occurs
*
a. when an agent thinks only of his own interest and not of his policyowners
b. when you purchase bad stocks with expectation that they will improve
c. when the insurance company accepts more than its share of poor risks
d. when persons in poor health wish to buy insurance
17. In an application, the information that must be disclosed include
*
a. only his date and place of birth
b. only his family history
c. every fact in his knowledge that is material to the insurance
d. only information he wants the agent to know
18. Why is it important that the application is the basis of the policy?
*
a. because the completed application is the basis of the policy contract and the company may accept or reject an application based on the information given in the application
b. for the agent to have available data of his prospect in connection with future sales
c. to avoid the necessity of the insurer putting all relevant details in the contract
d. none of the above
19. The term loading means
*
a. the difference between the gross and net premiums for the purpose of paying the insurance overhead expenses including commissions and taxes
b. the amount which the company will lend to the policyholder with the policy as a security
c. the amount payable in the event of the occurrence of a loss which renders him unfit for insurance
d. None of the above
20. The three elements that make up a life insurance premium are
*
a. mortality experience, investment earnings and operating expenses
b. cash values, dividends and paid up values
c. cash values, loan values and paid up values
d. past dividend experience, present dividend and projected interest