Can I Sell My Term Life Insurance Policy? A Deep Dive into Life Settlements, Options & Risks
Wondering “can I sell my term life insurance policy”? This comprehensive guide explains whether it’s possible, how life settlements work, valuation, risks, alternatives, and how to protect yourself
Can I Sell My Term Life Insurance Policy? A Deep Dive into Life Settlements, Options & Risks
hey everybody welcome back to the blogg today I'm going to be going over some practice questions for Your Life Insurance exam I hope this can help you feel more confident about passing your test I've helped thousands of people pass their test and I've helped hundreds of people make $100,000 or more in this industry it's worth it you're worth it so stick to it I promise there is
a treasure Trove of success waiting for you once you get your insurance license but it all comes down to passing this exam so without further ado I going to get started here on covering some of these practice exam questions please drop any questions in the comments comment section in the blogg and I'd be more than happy to answer any any of the questions that you have
FREE LOOK PERIOD
so first question that we have here what does the free look period allow a new policy holder to do is it a review the policy with no obligation for a specific number of days oh lost that there is it B cancel the policy and receive a refund on any claims is it C increase
the policy amount without medical exams or is it D transfer the policy to another person the correct answer is a the Freel look period allows policy holders to review the policy with no obligation and return it within a certain time frame for a full refund
RISK CLASSIFICATION
next question let me zoom in a little bit here what type of risk classification would an applicant in excellent Health who does not smoke in exercises regularly typically receive standard substandard preferred or declined the answer is C so someone who
is in excellent Health doesn't smoke and takes care of themselves would normally received a preferred rating standard is the average rating so average health and sub standard is below average health and decline is they are too much of a risk to the insurance company that cannot get insurance
FAIR CREDIT REPORTING ACT
next which of the following is the primary purpose of the Fair Credit Reporting Act a to allow applicants to check the accuracy of their medical reports B to authorize insurers to gather information about applicants through credit and Consumer Reports C to set a minimum credit score for life insurance applicants or D to eliminate
the use of credit history and underwriting decisions the correct answer is B to authorize insurers to gather information about applicants through credit and consumer reports all right so the Fair Credit Reporting Act lets insurance companies uh gather information about applicants through credit and consumer reports in a way that's fair to the consumer
BINDING RECEIPT
what is a binding receipt known as is it a conditional receipt temporary insurance agreement an unconditional re receipt or limited receipt the correct answer is C it's an unconditional I mean a b an unconditional receipt so a binding receipt is also known as an unconditional receipt granting immediate temporary coverage it's immediately bound coverage is bound immediately
TERM LIFE INSURANCE
next which life insurance policy provides coverage for a specified period only ending without any cash value if the term expires well the answer is in the question that one would be B term life insurance okay whole life insurance has cash value term life insurance does not have cash value and adjustable and universal life often have cash value
COMBINATION POLICIES (UNIVERSAL AND ADJUSTABLE LIFE)
okay which of the life I'm going to put the answer right here which type of life insurance combines both term and permanent life insurance in one policy and allows for adjustments um this question there's actually uh two two right answers here so it could be either universal life or adjustable life I know
there's that's a little mistake there but adjustable life and universal life are are pretty much the same thing they combine term insurance and permanent Insurance all right variable life if it's variable whole life it does not have term and whole life obviously does not have term it only has permanent Insurance
INCONTESTABLE CLAUSE
under the in contest a bull Clause how long does an insurer have to dispute the validity of a policy so it's 6 months one year two years or five years two years so under the incontestable Clause the insurance company has two years to dispute a claim if someone files a claim within 2 years of taking out the policy the insurance company can dispute the claim
FAMILY INCOME POLICY
okay next what what is the primary purpose of a family income policy is it to pay out a lump sum death benefit provide a monthly income to beneficiaries for a specified period following the insurance death is it to accumulate cash value for retirement or cover burial
expenses only correct answer is is B to provide a monthly income to beneficiaries a family income policy provides monthly income for a set period following the insured's death okay so insured dies a family income policy provides income to the beneficiaries
NONFORFEITURE OPTIONS
next which nonforfeiture option uses the cash value to keep coverage in force for a limited time okay this is going to be the extended term option so in an extended term option I have some blogg that cover this but in the extended term option the cash value is used to buy a Term Policy that equals the face base amount of the whole life that the cash value
is in so say there's $1,000 in cash value in a $20,000 whole life policy and you want to exercise the extended term option that will buy a $20,000 term for however many years the $1,000 of cash value we'll buy it for cash surrender option is when they just get cash they just take that $1,000 reduced paid up is when that ,000 buys a whole life policy that's that's a lowered face amount and then loan option that's taking a loan against the cash value