26. Describe the benefit provisions of a typical sick-leave plan.

27. Which of the following statements concerning a deferred annuity is (are) correct?

I. Deferred annuities must be purchased with periodic premiums paid over a period of time.

II. Because of the delay feature, a deferred annuity is unsuitable as a vehicle to accumulate a sum for old age.

A. I only

B. II only

C. Both I and II

D. Neither I nor II

28. Which of the following statements concerning a joint-and-last survivor annuity is (are) correct?

I. It must be sold as an immediate annuity.

II. Annuity payments cease upon the first death of an annuitant.

A. I only

B. II only

C. Both I and II

D. Neither I nor II

29. Describe a term life insurance policy's convertibility feature (including the attained age method and the original age method)

30. Discuss how insurers use probability concepts. What is the purpose?

31. Which of the following statements concerning the settlement options in a whole life insurance policy is (are) correct?

I. The policyowner must select a settlement option when applying for insurance.

II. Settlement options provide alternative methods for distributing the policy's death benefit.

A. I only

B. II only

C. Both I and II

D. Neither I nor II

32. In addition to most persons over age 65, who else is eligible for Medicare Part A benefits?

33. Which of the following statements concerning optional life insurance policy provisions is (are) correct?

I. The accelerated benefits provision allows for withdrawal of a portion of a policy's death benefit if the insured is terminally ill.

II. The assignment provision describes the conditions under which the policy owner may have the right to transfer some or all ownership rights to another person.

A. I only

B. II only

C. Both I and II

D. Neither I nor II

34. Which of the following statements concerning annuities utilized in structured settlements is (are) correct?

I. If the claimant is expected to have a shorter life expectancy due to the injuries, the cost of a life annuity will be at rates higher than standard.

II. If the claimant is expected to have no reduction in life expectancy due to the injuries, the cost of a life annuity will be at standard rates.

A. I only

B. II only

C. Both I and II

D. Neither I nor II

35. List the methods used to finance long-term care needs. Who is eligible for Medicaid to pay for long-term care?

36. All the following statements concerning the financing of Social Security and Medicare are correct EXCEPT:

A. Payroll taxes are deposited into trust funds from which benefits and administrative costs are paid.

B. The tax rate for self-employed persons is one-half of the combined tax rate for employees and employers.

C. The earnings base on which taxes are paid increases annually based on changes in the national level of wages.

D. The program uses a system of partial advance funding.

37. In what circumstances would financial advisors recommend a life insurance policy gifting program to their clients?

38. All the following statements concerning the findings of behavioral psychologists on the subject of risk tolerance are correct EXCEPT:

A. People are more likely to be risk averse if the major impact of a loss would fall on them rather than on strangers.

B. People tend to overestimate low-probability risks and underestimate higher probability risks.

C. Most people have a greater fear of unfamiliar risks than familiar risks.

D. Most people are more risk tolerant than they are risk averse.

39. Every insurance contract has a set of declarations. What primary declarations do typical insurance policies include?

40. All the following statements concerning variable annuity accumulation units are correct EXCEPT:

A. During the accumulation period, premiums are applied to purchase accumulation units.

B. Capital appreciation is recognized by allocating additional accumulation units to participants.

C. At the beginning of the liquidation period, the accumulation units are exchanged for annuity units.

D. Dividends are usually applied to the purchase of additional accumulation units.

41. List the nonforfeiture options in a whole life insurance policy.

42. All the following statements concerning the grace period clause in a life insurance policy are correct EXCEPT:

A. The grace period is a standard provision that is required by law to be in the policy.

B. If the insured dies during the grace period, the insurer may deduct one month's premium from the death benefit.

C. The standard length of the grace period is 30 or 31 days from the due date for payment of the premium.

D. If the insured survives the grace period, the insurer may deduct one month's premium from the cash value.

43. All the following statements concerning the net payment cost index approach to measuring life insurance costs are correct EXCEPT:

A. Each annual premium is accumulated at the assumed interest rate until the end of the time period.

B. The cash value is subtracted from the amount of accumulated premiums at the end of the time period.

C. Each annual dividend is accumulated at the assumed interest rate until the end of the time period.

D. Accumulated dividends are subtracted from the amount of accumulated premiums at the end of the time period.

44. All the following statements concerning insurance regulation are correct EXCEPT:

A. Insurance regulation is designed to protect the public against insolvency and unfair treatment by insurers.

B. Application and enforcement of insurance laws are carried out by the National Association of Insurance Commissioners.

C. The insurance business is among the types of private enterprise subject to much government regulation because it is generally considered to be affected with a public interest.

D. The federal and state governments both play a role in the regulation of insurance.

45. Briefly describe the various types of permanent life insurance policies (one sentence for each type)

46. How do policy loans in a life insurance policy work?

47. List the essential elements of a legally enforceable insurance contract.

48. Describe some key elements concerning insurance company investments (types of investment and risk)

49. All the following are potential disadvantages of a viatical settlement EXCEPT:

A. The prior policy owner must still continue to pay the policy premiums.

B. The settlement proceeds may be subject to creditors' claims.

C. Personal and medical information may be passed on to the viatical settlement provider without any guarantee of privacy protection.

D. The settlement proceeds may result in the viator's ineligibility for government assistance for which he or she would have otherwise been eligible.

50. Common features of both life insurance and annuities include all the following EXCEPT

A. basing rates on the same mortality table

B. basing premiums on probabilities of death and survival

C. utilizing the pooling technique

D. protecting against loss of income