SCLAHIP - South Carolina Life Accident and Health Insurance Producer Exam

Question 21: Ten years into a whole life policy the accumulated cash value has grown substantially, yet the amount the insurer would pay on the insured's death is still the original face amount. Which statement BEST explains how those two facts fit together?

Cash value offsets the insurer's net risk

Cash value adds to the face amount

The insurer refunds cash value separately

Cash value reduces the death benefit paid

Question 22: The owner of a permanent life policy decides she no longer needs the coverage, signs the insurer's form, brings the contract to an end and collects the accumulated value the policy has built up. Which action has the policyowner taken?

A collateral assignment

A policy loan

A reinstatement

A cash surrender

Question 23: A producer describes a rider that mails the insured a monthly benefit check while she is disabled, with the amount set at roughly one percent of the life policy's face value. The underlying life coverage stays in force throughout. Which rider is he describing?

Waiver of premium rider

Disability income rider

Accelerated death benefit rider

Long-term care rider

Question 24: Two clients each own a policy funded through separate account investments. One holds variable whole life with a fixed, level premium; the other holds variable universal life with a flexible premium. Which statement BEST captures the difference in their death benefit guarantees?

Both guarantee the original face amount

Neither guarantees any minimum death benefit

Only variable universal life guarantees a minimum

Only variable whole life guarantees a minimum

Question 25: An owner has paid twelve years of premiums on a permanent policy carrying a return of premium rider. He asks his producer exactly what his family would receive if he died tomorrow. Which statement best describes how this rider affects the claim?

Extra term proceeds match the premiums paid

His premium dollars are refunded without interest

The insurer refunds premiums and cancels coverage

Premiums come back only at policy maturity

Question 26: A universal life contract states a guaranteed minimum interest rate, and the insurer also declares a current rate each month based on its earnings. A policyowner asks which rate will actually be credited to the cash account. Which answer is correct?

Always the guaranteed rate

Always the current rate

The higher of the two rates

The average of the two rates

Question 27: A claims examiner reviewing a death claim may look only at the policy document itself, the copy of the application attached to it, and any riders or amendments made part of it. Which standard provision limits the examiner in this way?

Payment of premium

Entire contract

Reinstatement

Incontestability

Question 28: An insured dies owning a universal life policy with a face amount of one hundred thousand dollars and a cash account of fifty thousand dollars. The contract was issued under the level death benefit design. What amount does the beneficiary receive?

Fifty thousand dollars

One hundred fifty thousand dollars

Fifty thousand dollars plus interest

One hundred thousand dollars

Question 29: A policyowner wants permanent coverage but also wants the freedom to raise or lower each premium payment and to change the payment schedule as income varies from year to year. Which of the following policy types is built around exactly that flexibility?

Level term insurance

Continuous premium whole life

Universal life insurance

Single premium whole life

Question 30: An insured is still living when his whole life policy reaches the maturity date stated in the contract. At that point the accumulated cash value has grown to equal the face amount. Which outcome does the contract produce at that date?

The policy continues without further premiums

The face amount goes to the policyowner

The beneficiary receives the death benefit

Coverage converts to annually renewable term

Question 31: An insured carrying an accidental death and dismemberment rider survives an industrial accident but loses one hand. The claims department pays him one-half of the amount stated in the rider. Which term names the benefit paid for that single dismemberment?

Capital sum

Principal sum

Face amount

Accelerated benefit

Question 32: An applicant selects a term contract whose death benefit begins at a small amount and climbs steadily through the term, with the premium climbing as well. He says the design is meant to keep his coverage even with a rising cost of living. Which term policy is this?

Decreasing term

Level term

Return of premium term

Increasing term

Question 33: A producer contrasts life insurance with homeowners insurance for a client. She points out that the two lines demand proof of a stake in the covered subject at different moments. When must insurable interest exist for a life insurance policy?

At the time of application

At the time of the claim

Throughout the life of the policy

Only when the beneficiary is changed

Question 34: Every life insurance policy prints the dollar amount of the death benefit on its first page, and the industry took the name of that figure from the page on which it appears. Which term identifies that stated amount of coverage?

Cash value

Face amount

Net amount at risk

Gross premium

Question 35: A corporation buys and owns a life insurance policy covering one of its executives, pays every premium, and is named to receive the proceeds at his death. The executive is the insured but owns nothing under the contract. Which term describes this ownership arrangement?

Third-party ownership

Two-party ownership

Joint ownership by the insured

Insurable interest

Question 36: A twenty-eight-year-old owner of a whole life policy wants a contractual right to purchase stated additional amounts of coverage on set future dates, at standard rates for his age at that time, without answering medical questions or taking an exam. Which rider gives him that right?

Cost of living rider

Exchange privilege rider

Guaranteed insurability rider

Return of premium rider

Question 37: A policyowner borrows against the accumulated cash value of her life policy, switches the premium payment mode from annual to monthly, and never asks the named beneficiary for approval of either step. Which standard provision confirms she may act alone?

Ownership rights

Entire contract

Incontestability

Payment of claims

Question 38: An employee's group life coverage ends when his employer discontinues the plan. Eighteen days later, before he has applied for an individual contract, he dies. His widow files a claim with the group insurer. Which outcome BEST describes the insurer's obligation?

Nothing is payable; coverage already ended

Only the premiums he paid are refunded

The claim is paid at half value

The benefit is paid as if converted

Question 39: A permanent contract charges premiums close to term rates for its first four years, then raises the premium one time to a set figure that holds level for the rest of the insured's life. Which whole life policy operates that way?

Graded premium whole life

Modified premium whole life

Twenty-pay whole life

Level term to age seventy

Question 40: A one-year term policy renews automatically at the close of each year without any medical questions, and the premium charged goes up each time the insured grows a year older. Which type of term life coverage works in this way?

Annually renewable term

Twenty-year level term