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| 1. The _____ select a settlement option if none was chosen prior to filing a claim. |
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| 2. Neither the interest nor the prinicipal received by a beneficiary as the result of a death claim settlement is taxable. (T or F) |
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| 3. When a settlement option was not selected, the automatic settlement option of ____ ____ will be used at the time of claim. |
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| 4. Which settlement option guarantees that all proceeds will be paid to either the policyowner or the beneficiary? |
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| 5. Which nonforfeiture option provides the longest period of protection? |
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| 6. Which of the is not a life insurance option? A) Premium option B) Settlement option C) Dividend option |
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| 7. There are two life insurance options, Reduced Paid-up and Paid-up Additions, that are sometimes confused one for the other. Which of the two is the nonforfeiture option? |
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| 8. An amount of insurance purchased by the dividend option of 1 Year Term Insurance will purchase an amount equal to the _____ _____ of the policy |
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| 9. Which of the following is considered the automatic nonforfeiture option? A) Lump Sum B) Cash C) Reduced Paid-up D) Extended Term |
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| 10. Dividends are the guaranteed return of unused premiums on nonparticipating policie. (T or F). |
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| 11. Which of the following is considered the automatic nonforfeiture option? A) Lump Sum B) Cash Surrender C) Reduced Paid-Up D) Extended Term |
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| 12. My life insurance policy has $12,489 of accumulated dividends.My grandfather and I have pain in $9,360 total premiums. Do, I have to pay taxes on my dividend accumulation? (Y or N) If so, how much is taxable? If not, why? |
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| Yes, $3,129 ($12,489-$9,360) |
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| 13. The purpose of an Automatic Premium Loan is to borrow against the cash value of the policy on preapproved credit. (T or F) |
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| 15. When the policy loan and accured interest exceed the cash value, the policy is void. (T or F) |
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| 16. Huck's policy shows a cash value of $22,397. Of this amount, Huck borrowed $4,600 at 8% three years ago that has generated $1,195 of loan interest. If Huck surrendered the policy today, what amount of the cash value would Huck receive if his premiums paid to date were $27,000 |
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