1. A single premium policy means a policy
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a. requiring only a single premium each year
b. under which only one premium payment is required
c. only available to single individuals
d. on which no more than one premium can be paid in advance
2. A fixed amount added to the premium of a given policy regardless of policy size is known as
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a. policy fee
b. policy reserve
c. policy values
d. extra premium
3. To be able to calculate the required premiums for a given policy, the agent must know the applicant’s
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a. Age
b. choice of plan
c. face amount desired
d. all of the above
4. To calculate premiums for the other modes of premium payment, the annual premium is
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a. divided by the desired number of premium payments
b. divided by a conversion factor for the mode of payment desired
c. multiplied by a conversion factor for the mode of payment desired
d. multiplied by a constant conversion factor
5. The convertible feature of a term insurance policy provides that the policy may be
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a. changed to a permanent insurance policy without evidence of insurability
b. changed to another life
c. cashed for a guaranteed sum
d. changed to permanent insurance with evidence of insurability
6. Within two years of buying a life insurance policy, you are accidentally killed when your car hits a tree. In these circumstances the insurance company will
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a. refund premium because it is suicide
b. pay double the face amount
c. pay the face amount
d. pay nothing
7. When explaining dividends, the following information must be supplied
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a. that they are not guaranteed
b. the dividends paid-up in the previous years
c. the anticipated dividends
d. the relation to the cost of the policy
8. The fundamental advantage of the use of insurance as a means of meeting economic losses is that through insurance these losses are
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a. spread over a large number of people
b. deferred for a specified period of time
c. reduced for the group as a whole through the multiplier effect
d. met as they arise through savings accumulated on an assessment basis
9. An Individual, at age 35, purchases a policy under which he will in 20 years receive the face amount of the policy himself if he is still alive at that date. This policy is obviously a
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a. 20 Yr. Endowment
b. 20 Pay Life
c. 20 Yr. term
d. None of the above
10. In a 20 Life policy
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a. protection is until age 100, payment of premium is for 20 years
b. protection is until age 100, payment of premium until age 100
c. protection is for 20 years, payment of premium is for 20 years
d. protection is for 20 years, payment of premium until age 100