1.Review scenario 131: During an exam review, these facts apply: Premium mode refers to how often premiums are scheduled, such as monthly, quarterly, semiannual, or annual. Which option best identifies the concept being tested?
Premium mode refers to how often premiums are scheduled, such as monthly, quarterly, semiannual, or annual.
Example: A client or producer applies this rule in a policy situation. The correct concept is The frequency of premium payments. Premium mode refers to how often premiums are scheduled, such as monthly, quarterly, semiannual, or annual.
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2.For review, determine when applying a policy concept, these facts apply: Insurers may use modal factors so more frequent payments can total more than one annual payment. Which option best identifies the concept being tested.
Insurers may use modal factors so more frequent payments can total more than one annual payment.
Example: A client or producer applies this rule in a policy situation. The correct concept is Modal factors and administrative costs may apply. Insurers may use modal factors so more frequent payments can total more than one annual payment.
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3.Review scenario 133: In a licensing-exam fact pattern, complete this life-insurance rule: ___ generally uses level premiums designed to fund lifetime protection. Which option belongs in the blank?
Traditional whole life generally uses level premiums designed to fund lifetime protection.
Example: A client or producer applies this rule in a policy situation. The correct concept is Traditional whole life. Traditional whole life generally uses level premiums designed to fund lifetime protection.
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4.Review scenario 134: While reviewing a policy file, complete this life-insurance rule: ___ allows flexible premiums within policy limits and funding requirements. Which option belongs in the blank?
Universal life allows flexible premiums within policy limits and funding requirements.
Example: A client or producer applies this rule in a policy situation. The correct concept is Universal life. Universal life allows flexible premiums within policy limits and funding requirements.
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5.Review scenario 135: During a coverage discussion, these facts apply: Gross premium includes expense loading in addition to the net-premium assumptions. Which option best identifies the concept being tested?
Gross premium includes expense loading in addition to the net-premium assumptions.
Example: A client or producer applies this rule in a policy situation. The correct concept is Expenses. Gross premium includes expense loading in addition to the net-premium assumptions.
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6.For review, identify factor generally increases life insurance premium cost, all else equal.
Higher expected mortality risk generally leads to higher premium cost.
Example: A client or producer applies this rule in a policy situation. The correct concept is Higher mortality risk. Higher expected mortality risk generally leads to higher premium cost.
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7.Review scenario 137: An automatic premium loan provision can use available cash value to:
Automatic premium loan can borrow against cash value to pay overdue premium when the provision applies.
Example: A client or producer applies this rule in a policy situation. The correct concept is Pay an overdue premium and help prevent lapse. Automatic premium loan can borrow against cash value to pay overdue premium when the provision applies.
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8.Review scenario 138: If the insured dies during a policy's grace period with premium unpaid, proceeds are generally:
Coverage generally remains in force during the grace period, and an overdue premium may be deducted from proceeds.
Example: A client or producer applies this rule in a policy situation. The correct concept is Payable subject to deduction of the overdue premium under the contract. Coverage generally remains in force during the grace period, and an overdue premium may be deducted from proceeds.
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9.Review scenario 139: A single-premium policy is funded by:
Single-premium insurance is funded with one premium at issue.
Example: A client or producer applies this rule in a policy situation. The correct concept is One lump-sum premium. Single-premium insurance is funded with one premium at issue.
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10.Review scenario 140: Limited-pay whole life means premiums are:
Limited-pay whole life shortens the premium-paying period while permanent coverage can remain in force.
Example: A client or producer applies this rule in a policy situation. The correct concept is Paid for a limited number of years while coverage may continue for life. Limited-pay whole life shortens the premium-paying period while permanent coverage can remain in force.
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