colorado life and health
he interest earned on policy dividends is
taxable
Which of the following is true about the mandatory free look in a Life Insurance policy?
It commences when the policy is delivered.
What would be an advantage to naming a contingent (or secondary) beneficiary in a life insurance policy?
It determines who receives policy benefits if the primary beneficiary is deceased
An insurer receives an Examination Request Form dated June 2 from the Division of Insurance. The insurer must respond by
June 12.
Which of the following is an IRS qualified retirement program for the self-employed?
Keogh
What is the other term for the cash payment settlement option?
Lump sum
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-insured ride
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
SEC registration.
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT
SEPs are suitable for large companies
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
Selection, classification, and rating of risks
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?
Size of each installment
Under an employer-sponsored group plan, if the insurance on a person covered under the policy ceases because of termination of employment, which of the following is true
The certificate owner is entitled to convert coverage to an individual policy without evidence of insurability.
Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?
The employer is the owner and beneficiary
who is the owner and who is the beneficiary on a Key Person Life Insurance policy?
The employer is the owner and beneficiary
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
The insured may renew the policy for another 10 years, but at a higher premium rate
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT
The insured's age at death
When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?
The insured's contingent beneficiary
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?
Unilateral
Which of the following products requires a securities license?
Variable annuity
An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with the upcoming medical expenses. What option could the insured utilize?
Viatical settlement
All of the following benefits are available under Social Security EXCEPT
Welfare benefits.
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?
automatic premium loan
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
consideration
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
family term rider
A life insurance policy has a legal purpose if both of which of the following elements exist?
insurable interest and consent
Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?
Buy-sell agreement
Which of the following statements concerning buy-sell agreements is true?
Buy-sell agreements are normally funded with a life insurance policy
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
conditonal
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
$3,000
According to the Entire Contract provision, a policy must contain
A copy of the original application for insurance.
A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?
Collateral assignment
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered
Discrimination
Which of the following is true regarding taxation of dividends in participating policies
Dividends are not taxable.
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)
Equity Indexed Annuity
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n
Equity Indexed Annuity.
The requirement that producers must account for all insurance funds collected, and not commingle those funds with their own is known as
Fiduciary responsibility
An insurance producer is prohibited from charging separate fees for any of the following services EXCEPT
Financial planning.
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?
Illegal under any circumstances
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die
Which of the following provisions prevents the insurer from denying a claim due to statements on the application after a certain period of time
Incontestability
Which of the following provisions prevents the insurer from denying a claim due to statements on the application after a certain period of time?
Incontestability
During partial withdrawal from a universal life policy, which portion will be taxed?
Interest
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
Pay a reduced death benefit
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
Purchase a single premium policy for a reduced face amount.
Which of the following is an example of a producer being involved in an unfair trade practice of rebating?
Telling a client that his first premium will be waived if he purchases the insurance policy today
Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?
Term rider
Which of the following would provide an underwriter with information concerning an applicant's health history?
The Medical Information Bureau
Which of the following information will be stated in the consideration clause of a life insurance policy
The amount of premium payment
A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?
The amount of the distribution is reduced by the amount of a 20% withholding tax
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner.
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?
The annuitant must be a natural person.
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
The interest is not taxable since it remains inside the insurance policy.
Which of the following best describes what the annuity period is?
The period of time during which accumulated money is converted into income payments
The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as
The policy contains sufficient cash value to cover the cost of insurance.
If an insured continually uses the automatic premium loan option to pay the policy premium
The policy will terminate when the cash value is reduced to nothing.
Which of the following is TRUE regarding the premium in term policies?
The premium is leve
Which is true about a spouse term rider?
The rider is usually level term insurance.
An insurer may not transact insurance in this state without which of the following?
Certificate of Authority
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?
Conditional
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?
Consumer report
Which of the following is NOT typically excluded from life policies?
Death due to plane crash for a fare-paying passenger
The regulations regarding replacement apply to which of the following?
Defamation
producer agent must do all of the following when delivering a new policy to the insured EXCEPT
Disclose commissions earned from the sale of the policy.
An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan
A producer is subject to criminal prosecution in another jurisdiction. Within what time frame must the producer report this fact to the Commissioner?
Within 30 days after the initial pre-trial hearing
The premium of a survivorship life policy compared with that of a joint life policy would be
lower
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before-tax corporate dollars, and it does not meet government approval standards. This annuity plan is
A nonqualified annuity plan
The term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy.e
In insurance, an offer is usually made when
An applicant submits an application to the insurer.
The minimum interest rate on an equity indexed annuity is often based on
An index like Standard & Poor's 500.
Under which of the following circumstances would an insurer pay accelerated benefits?
An insured is diagnosed with cancer and needs help paying for her medical treatment.
The death protection component of Universal Life Insurance is always
Annually Renewable Term
A Universal Life Insurance policy is best described as a/an
Annually Renewable Term policy with a cash value account
In classifying a risk, the Home Office underwriting department will look at all of the following EXCEPT
Applicant's past income.
Which of the following is INCORRECT regarding a $100,000 20-year level term policy?
At the end of 20 years, the policy's cash value will equal $100,000.
The mixing of premiums belonging to the insurer or the insured with the producer's personal funds not related to the business is called
Commingling.
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
Conditional
Which of the following includes information regarding a person's credit, character, reputation, and habits?
Consumer report
When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?
Fixed amoun
All of the following are dividend options EXCEPT
Fixed-period installments.
Notwithstanding any other provision of law, each insurer admitted to transact the business of life insurance in this state must pay interest on the death benefits
From the date of death.
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
Level term
Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?
Life expectancy
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
If a life insurance policy has an irrevocable beneficiary designation,
The beneficiary can only be changed with written permission of the beneficiary.
Which is NOT true about beneficiary designations?
The beneficiary must have insurable interest in the insured
Which of the following is NOT true of life settlements?
The seller must be terminally ill.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive
All of the following are requirements for life insurance illustrations EXCEPT
They must be part of the contract.
Which of the following is the best reason to purchase life insurance rather than annuities?
To create an estate
What is the purpose of establishing the target premium for a universal life policy?
To keep the policy in force
