A Domestic Insurer Issuing Variable Contracts

Question:

Answer: The insurer will pay the full death benefit from the group policy to the beneficiary.

The employee usually has a period of 31 days after terminating from the group in order to exercise the conversion option. During this time, the employee is still covered under the original group policy.

Question: Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

a) Contracts of adhesion.

b) Unilateral contracts.

c) Aleatory contracts.

d) Binding contracts.

Answer: Contracts of adhesion.

Insurance policies are written by the insurer and submitted to the insured on a take- it-or-leave-it basis. The insured does not have any input into the contract, but simply adheres to the contract.

Question: A domestic insurer issuing variable contracts must establish one or more

a) General accounts.

b) Separate accounts.

c) Liability accounts.

d) Annuity accounts.

Answer: Separate accounts.

Any domestic insurer issuing variable contracts must establish one or more separate accounts. The insurer must maintain in each separate account assets with a value at least equal to the reserves and other contract liabilities connected to the account.

Question: What is the purpose of the buyer’s guide?

a) To allow the consumer to compare the costs of different policies

b) To provide the name and address of the agent/producer issuing the policy

c) To list all policy riders

d) To provide information about the issued policy

Answer:

Question: Who can request changes in premium payments, face value, loans, and policy plans?

a) Contingent beneficiary

b) Beneficiary

c) Producer

d) Policyowner

Answer: Policyowner

Mandatory provisions give these rights to the policyowner.

Question:

Answer: Guaranteed insurability option

The guaranteed insurability option allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability.

Question:

Answer: The balance of the loan will be taken out of the death benefit.

If the loan and interest are not repaid and the insured dies, then it will be subtracted from the death benefit.

Question:

Answer:

Question:

Answer:

Question:

Answer: Mutual

Funds not paid out after paying claims and other operating costs are returned to the policyowners in the form of a dividend. If all funds are paid out, no dividends are paid.