L07 Life Insurance Documentation MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on L07 Life Insurance Documentation, a fundamental topic in the field of IC38 Life Insurance Agent Exam. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our L07 Life Insurance Documentation MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of L07 Life Insurance Documentation mcq questions that explore various aspects of L07 Life Insurance Documentation problems. Each MCQ is crafted to challenge your understanding of L07 Life Insurance Documentation principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC38 Life Insurance Agent Exam tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our L07 Life Insurance Documentation MCQs are your pathway to success in mastering this essential IC38 Life Insurance Agent Exam topic.

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L07 Life Insurance Documentation MCQs | Page 8 of 11

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Q71.
How is assignment of a life insurance policy defined?

a.

The transfer of the policyholder's rights, title, and interest in the policy to another person

b.

The cancellation of the policy

c.

The surrender of the policy for its cash value

d.

The termination of the policy

Discuss
Answer: (a).The transfer of the policyholder's rights, title, and interest in the policy to another person Explanation:Assignment of a life insurance policy is defined as the transfer of the policyholder's rights, title, and interest in the policy to another person.
Q72.
How is assignment of a life insurance policy defined?What is the person who transfers the rights, title, and interest in the policy called in an assignment?

a.

The transfer of the policyholder's rights, title, and interest in the policy to another personThe assignee

b.

The cancellation of the policyThe nominee

c.

The surrender of the policy for its cash valueThe beneficiary

d.

The termination of the policyThe assignor

Discuss
Answer: (b).The transfer of the policyholder's rights, title, and interest in the policy to another personThe assignor Explanation:Assignment of a life insurance policy is defined as the transfer of the policyholder's rights, title, and interest in the policy to another person.The person who transfers the rights, title, and interest in the policy is called the assignor.
Q73.
What is the term for the person to whom the policy rights, title, and interest are transferred in an assignment?

a.

The nominee

b.

The assignor

c.

The beneficiary

d.

The assignee

Discuss
Answer: (d).The assignee Explanation:The person to whom the policy rights, title, and interest are transferred in an assignment is called the assignee.
Q74.
What happens to the nomination when an assignment is made to the insurance company for a policy loan?

a.

The nomination is cancelled

b.

The policyholder can nominate a new beneficiary

c.

The policy continues with the same nomination

d.

The nominee becomes the assignee

Discuss
Answer: (c).The policy continues with the same nomination Explanation:When an assignment is made to the insurance company for a policy loan, the policy continues with the same nomination.
Q75.
What is the main difference between conditional assignment and absolute assignment in life insurance?

a.

Conditional assignment involves the transfer of policy rights without reversion, while absolute assignment allows reversion to the life assured.

b.

Conditional assignment is irrevocable, while absolute assignment can be changed at any time.

c.

Conditional assignment is only used for housing loans, while absolute assignment is for all other purposes.

d.

Conditional assignment requires the consent of the assignor, while absolute assignment does not.

Discuss
Answer: (a).Conditional assignment involves the transfer of policy rights without reversion, while absolute assignment allows reversion to the life assured. Explanation:Conditional assignment involves the transfer of policy rights with the possibility of reversion, while absolute assignment provides that all rights, title, and interest are transferred without reversion.
Q76.
In an absolute assignment, who has control over the policy's rights and benefits?

a.

The assignor

b.

The life assured

c.

The insurance company

d.

The assignee

Discuss
Answer: (d).The assignee Explanation:In an absolute assignment, the assignee has control over the policy's rights and benefits.
Q77.
What is the primary scenario where absolute assignment is commonly used?

a.

When the policyholder wants to change the nomination

b.

When the policy is mortgaged for a housing loan

c.

When the assignor wants to maintain some control over the policy

d.

When the assignee agrees to reversion

Discuss
Answer: (b).When the policy is mortgaged for a housing loan Explanation:Absolute assignment is more commonly seen when the policy is mortgaged against a debt assumed by the policyholder, such as a housing loan.
Q78.
What is one of the necessary conditions for a valid assignment?

a.

The assignment must be opposed to the law in force

b.

The assignee can do another assignment but cannot change the nomination

c.

The assignor must have an absolute right and title to the policy

d.

The assignor must be the life assured

Discuss
Answer: (c).The assignor must have an absolute right and title to the policy Explanation:One of the necessary conditions for a valid assignment is that the assignor must have an absolute right and title or assignable interest to the policy being assigned.
Q79.
Can the assignee change the nomination of the policy?

a.

Yes, the assignee can change the nomination at any time.

b.

No, the assignee cannot change the nomination because the assignee is not the life assured.

c.

The assignee can only change the nomination with the consent of the assignor.

d.

The nomination can never be changed after assignment.

Discuss
Answer: (b).No, the assignee cannot change the nomination because the assignee is not the life assured. Explanation:No, the assignee cannot change the nomination because the assignee is not the life assured.
Q80.
What is the requirement for a valid assignment of a life insurance policy?

a.

The assignee's signature on the policy

b.

The policyholder's consent

c.

At least one witness

d.

The insurer's approval

Discuss
Answer: (c).At least one witness Explanation:A valid assignment of a life insurance policy must be signed by the assignor and attested by at least one witness.
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