11) Mr. Ashton applies for life insurance and the company offers him a life contract. Mr. Ashton writes to the company that he will take the policy if he can have a 10% discount on the premium quoted in the policy. Mr. Ashton’s action is A) a counteroffer and, if he dies before the company responds to his request, he will still be insured as long as he paid the original premium requested. B) not allowed under the insurance laws of most states C) a counteroffer and the offer by the insurance company to give him a policy is terminated. D) simply a request and does not terminate the offer of the insurance company to insure him.
12) When an insurance company delays in rejecting or accepting an application, the majority view of most courts is A) silence or inaction does not constitute automatic acceptance. B) delay implies acceptance C) delay implies rejection D) the company will be liable for the death benefit if the applicant dies prior to underwriting.
13) Requiring a premium to be paid before insurance coverage is extended is a A) Condition precedent B) Condition subsequent C) Conditional receipt D) Binding Receipt
14) All of the following statements pertaining to insurable interest are true EXCEPT: A) Every individual has insurable interest in his or her own life B) Husbands and wives have insurable interest in each other C) Aunts and uncles have insurable interest in the lives of their nieces and nephews. D) Co-business owners have insurable interest in each other even if they are not related
15) Which of the following is not a component of the face page of a life insurance policy? A) Names the parties to the contract B) Stipulation of the number of days of grace days for late policy premium payments C) A brief description of the coverage D) The signatures of insurance company officers
16) If an insured intentionally understates his age in an application and then subsequently dies after the policy was issued, based on the age misstatement, the death benefit A) will not be paid due if fraud was involved B) will be reduced C) will be increased D) will be paid according to the full face amount
17) Which of the following statements about the policy loan provision is correct? A) Only principal borrowed, and not interest, must be repaid prior to surrender or death B) Only interest on principal borrowed must be repaid at death or surrender. C) Neither principal nor interest is due at any time since cash value always belongs to the policy owner. D) Both principal and interest will be deducted from any surrender or death benefit payable.
18) All of the following statements about the reinstatement provision are true EXCEPT: A) A policy which had been previously taken as reduced and paid up may be reinstated. B) Any policy loans must be repaid with interest before reinstated. C) The company can require the insured to prove insurability before effecting the reinstatement. D) The policy can only be reinstated if it has been within a limited period of time from lapse, usually three years or less, and the policy as on extended coverage.
19) Supplementary benefits which may be added to the life contract include each of the following EXCEPT: A) Guaranteed insurability B) Disability waiver C) C) Accidental death benefit D) Aviation exclusion
20) Which of the following statements about the Accidental Death Benefit are correct? I. “Accidental means” a is less restrictive standard than accidental result II. Itpays an extra amount of proceeds which matchesthe face amount ofthe base policy ifthe cause of death was an accident. III. The insured must die within 6 months of an accident for proceeds to be payable. A) I only B) II only C) I and II D) I, II and III
21) “Total” disability means A) catching a severe cold which lingers for several weeks. B) a person from the State of California is ill C) a person cannot work because of illness or injury at a job for which he is suited or trained by education or experience. D) D) being able to only do some of your job but not all ‘ of the regular duties.
22) Before an insurance company will waive premium payments due to disability, the insured must be disabled for a minimum of A) 3 months B) 6 months C) 9 months D) 12 month
30) Under the terms of a settlement agreement, a Contingent Payee A) is the same as the primary payee. B) always receives nothing if the primary payee outlives the insured. C) collects any unpaid income amounts still due after the primary payee dies. D) has the identical rights of a contingent beneficiary in a life insurance contract.
31) A state law known as the Simultaneous Death Act says that when an insured and his beneficiary die at the same time as a result of the same incident A) it is assumed the beneficiary outlived the insured B) a life insurance contract is rendered invalid C) it is assumed the insured outlived the beneficiary D) the rights of the beneficiary are completely ‘protected.
32) When a first premium is paid on a policy at the time of application, renewal premiums will be due A) periodically from the exact date of the application B) on the anniversary of policy delivery C) according to the policy effective date D) and payable to the insurance agent
33) What happens if an applicant writes a personal check as payment for initial premium and that check is subsequently dishonored? A) The policy can be lapsed and the company can sue to collect on the check. B) The policy proceeds are still automatically payable if the insured dies and the premium is simply deducted from the death benefit. C) Under no circumstances will the company be liable to pay the death benefit. D) The insurance agent will be responsible to pay the premium to the insurance company.

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