1.For review, determine when applying a policy concept, complete this life-insurance rule: The death benefit is paid to the ___ under the policy, subject to policy terms and assignments. Which option belongs in the blank.
The death benefit is paid to the beneficiary designated under the policy, subject to policy terms and assignments.
Example: A client or producer applies this rule in a policy situation. The correct concept is Designated beneficiary. The death benefit is paid to the beneficiary designated under the policy, subject to policy terms and assignments.
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2.Review scenario 142: In a licensing-exam fact pattern, these facts apply: Outstanding policy loans and accrued interest generally reduce the amount payable at death. Which option best identifies the concept being tested?
Outstanding policy loans and accrued interest generally reduce the amount payable at death.
Example: A client or producer applies this rule in a policy situation. The correct concept is Reduces the proceeds payable. Outstanding policy loans and accrued interest generally reduce the amount payable at death.
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3.Review scenario 143: While reviewing a policy file, these facts apply: Lump-sum settlement pays the available proceeds in one payment. Which option best identifies the concept being tested?
Lump-sum settlement pays the available proceeds in one payment.
Example: A client or producer applies this rule in a policy situation. The correct concept is Lump sum. Lump-sum settlement pays the available proceeds in one payment.
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4.Review scenario 144: During a coverage discussion, these facts apply: With fixed period, the chosen number of years determines the installment schedule. Which option best identifies the concept being tested?
With fixed period, the chosen number of years determines the installment schedule.
Example: A client or producer applies this rule in a policy situation. The correct concept is The selected time period. With fixed period, the chosen number of years determines the installment schedule.
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5.Review scenario 145: In a case-study question, these facts apply: Fixed amount pays a chosen amount periodically until principal and interest are exhausted. Which option best identifies the concept being tested?
Fixed amount pays a chosen amount periodically until principal and interest are exhausted.
Example: A client or producer applies this rule in a policy situation. The correct concept is The selected periodic dollar amount. Fixed amount pays a chosen amount periodically until principal and interest are exhausted.
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6.Review scenario 146: A life-income settlement option is designed to address which risk for the beneficiary?
Life income can provide payments for the beneficiary's lifetime, addressing longevity risk.
Example: A client or producer applies this rule in a policy situation. The correct concept is Outliving the proceeds. Life income can provide payments for the beneficiary's lifetime, addressing longevity risk.
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7.Review scenario 147: If a valid collateral assignment exists at death, who has priority to the assigned amount?
A collateral assignee generally has priority up to the debt secured before remaining proceeds go to beneficiaries.
Example: A client or producer applies this rule in a policy situation. The correct concept is The assignee creditor. A collateral assignee generally has priority up to the debt secured before remaining proceeds go to beneficiaries.
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8.Review scenario 148: If no beneficiary survives and the policy directs payment to the insured's estate, proceeds become part of:
When the estate is beneficiary, proceeds are paid to the estate and may be subject to estate administration.
Example: A client or producer applies this rule in a policy situation. The correct concept is The estate. When the estate is beneficiary, proceeds are paid to the estate and may be subject to estate administration.
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9.Review scenario 149: Interest added to delayed death proceeds is generally intended to compensate for:
Applicable law or contract may require interest on death proceeds during the claim-payment period.
Example: A client or producer applies this rule in a policy situation. The correct concept is Time between death/claim entitlement and payment as required by law or contract. Applicable law or contract may require interest on death proceeds during the claim-payment period.
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10.Review scenario 150: A spendthrift clause or arrangement is intended primarily to:
Spendthrift protections can restrict transfer or creditor access to proceeds held under settlement arrangements, subject to law.
Example: A client or producer applies this rule in a policy situation. The correct concept is Limit a beneficiary's ability to assign or immediately exhaust certain installment proceeds. Spendthrift protections can restrict transfer or creditor access to proceeds held under settlement arrangements, subject to law.
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