Question 1

1. Which of the following items should not be taken into account when performing a "due care" analysis?

   		assessing the general characteristics and financial information of the company
   		reviewing profitability, leverage, and liquidity tests
   		looking at the company's ratings by the major rating services
   		inspecting the company's marketing materials

2 points

Question 2

1. Life insurance companies with better mortality experience than other companies tend to have

   		higher underwriting standards
   		nonqualified deferred compensation plans for general agents
   		a mutual holding company structure
   		a 401(k) matching program for employees

2 points

Question 3

1. In choosing life insurance policies, match the problem to the product.

   True

   False

2 points

Question 4

1. One of the critical questions in examining a policy illustration should be how much of the value is guaranteed and how much is projected.

   True

   False

2 points

Question 5

1. It is important in reviewing a policy illustration to remember that dividends are not guaranteed.

   True

   False

2 points

Question 6

1. The longer the period into the future that policy values are projected, the more likely they are to be accurate.

   True

   False

2 points

Question 7

1. The easiest policy comparison method to understand and use is the

   		interest-adjusted net payment cost index
   		traditional net cost method
   		equal outlay method
   		Baldwin method

2 points

Question 8

1. A typical "incontestable clause" will prevent an insurer from challenging an insurance contract because of

   		non-payment of premiums
   		fraudulent misrepresentations in the application
   		lack of insurable interest in the applicant at the inception of the contract
   		procurement of the policy with intent to murder.

2 points

Question 9

1. If an insured individual dies under circumstances that suggest suicide, the presumption is that he did not, and the burden of proof is on the insurer to prove that suicide, in fact, occurred.

   True

   False

2 points

Question 10

1. Most states require that life insurance contracts contain a grace period of 30 days, during which the policy remains in force even if the insured dies without having made the premium payment.

   True

   False