CT Life Insurance Exam

Which of these statements about the traditional individual retirement accounts is accurate?

10% penalty is applied to withdrawals prior to age 591/2

A temporary producer license is valid for a max of ___ days

180 days

Producers licensed in CT must notify the Insurance Dept. within___ days of any change of name or address?

30 days

What is the standard grace period for premium payments on all individual life insurance policies issued in CT

30 days

What is CT's definition of Life Insurance replacement?

A transaction in which a new policy is bought and an old policy is terminated

Which of these actions is the Commissioner of Insurance empowered to do?

Administer insurance licensing exams

In a life settlement, how much does the policyowner receive for a life insurance policy?

Amount less than the death benefit

Which of these is considered to be an Unfair Claims Settlement practice?

An insurer denying claims without fully investigating

Q is the insured for $25,000 life insurance policy. Q dies October 15. Q's beneficiary receives for $25,108 on December 15. Why did Q's beneficiary receive an amount higher than the policy amount?

An insurer must pay interest on proceeds held beginning on the date of the death

Which is an accurate description of the premium in a graded premium life insurance policy?

Annual increases in premium for a stated number of years then remains level

____ is the authority given to a producer to transact business on behalf of the insurer.

Appointment

Where does funding for the Insurance Guaranty Fund originate from?

Assessments by member companies

K's produced license was cancelled August 31, 2020. K may apply for reinstatement without an examination by which date?

August 31, 2021

Which of these is NOT a nonforfeiture provision contained in a life insurance policy

Automatic Premium Loan

Who is NOT required to sign a life insurance application?

Beneficiary

When evaluating an insurers financial status, the Commissioner may consider each of the following EXCEPT

Comparing the premiums received with the surplus for each year

Which of these actions does NOT constitute life insurance policy replacement?

Convert term coverage to a whole life policy

Mike applied for life insurance and was issued a conditional receipt. He is later found to be insurable and is issued a policy. When does his coverage become effective?

Date of insurance of the conditional receipt

Which of the following would be considered a violation of CT insurance law?

Failure to remit premium in a timely manner

A consumer who has been recently denied insurance, credit, or employment based on an unfavorable consumer report MUST be advised as such. Which of the following does this statute originate from?

Fair Credit Reporting Act

When the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do?

Give notice, explain, and allow opting out

Which of the following is NOT subject to the promise to pay in an insuring clause?

How the premium is calculated

If the Insurance Commissioner determines a producer has been engaging in an unfair of deceptive activity, which of the following actions will be likely be taken?

Insurance Commissioner orders the activity to cease

If the Insurance Commissioner determines a producer has been engaging in an unfair or deceptive activity, which of the following actions will be likely be taken?

Insurance Commissioner orders the activity to cease

Controlled business can be best described as

Insurance business written by a producer on his/her family member

Which statement regarding whole life insurance is accurate?

Insurance coverage can continue for life

Which of the following is protected under the Brokered Transactions Guaranty Fund?

Insured

What type of life insurance policy covers two or more persons and pays the face amount upon the death of the first insured?

Joint life

The _____ is responsible for reporting to the Commissioner any name or address change of the licensee.

Licensee

What is another term used for a "pure" life annuity?

Life income

Tim is confined to a nursing home but doesn't have a terminal illness. Which life insurance rider is designed to help pay for this type of expense?

Long-term care benefit rider

What would be a valid reason for naming a trust as the beneficiary of a life insurance policy as opposed to naming an individual?

Management of proceeds would be provided

Why do insurers require a minimum number of employees participate in a group insurance plan?

Minimize adverse selection

______ can be defined as "making an unfair comparison of two insurance policies"

Misrepresentation

Which of the following is NOT a valid reason for an insurer to contest a life insurance policy during the policy's first 2 years of existence?

Misstatement of age

Life insurance premiums are computed on what three factors?

Mortality, interest, expenses

Wyatt is shopping for life insurance and is mainly concerned with the policy's death benefit. Which index should he be looking at when making comparisons?

Net payment cost index

Which of these contracts are affected by replacement regulations?

Ordinary Life Insurance

Which of these is a legitimate form of life insurance advertisement?

Paid celebrity endorsement

What is the purpose of the Insurance Guaranty Association?

Pays authorized claims for liquidated life and health insurers

Which statement regarding an adjustable life insurance policy is NOT true?

Policy loans are not permitted

Which of the following triggers an accelerated (living) benefit?

Qualifying event

Which of the following actions may result in a producer's license being suspended by the Commissioner?

Rebating part of the commission tot he applicant

Which of these statements is true about an insurance broker?

Represents more than one insurer

What is the insurer responsible for when a producer is acting within the scope of authority granted in the agency contract?

Responsible for acts by the producer that are authority only

Which of the following is NOT considered rebating?

Sharing commissions with a producer licensed in the same line of business

What would be considered an advantage of purchasing term life insurance?

The initial premium is lower compared to an equivalent amount of whole life coverage

Which of the following must clearly be illustrated in ALL sales material for market value adjusted annuities?

The market value adjustments can be either upward or downward

Taxable income may be the result from all of these modified endowment contract transactions EXCEPT for

The policy is surrendered for less than what was paid into it

Which of these individuals is eligible for a temporary producers license?

The spouse of a disabled partner

Which of these would be a valid reason for the Insurance Commissioner to hold a hearing?

To determine if a producer has engaged in improperity

Why would the Commissioner examine the records of an insurance company?

To determine the solvency of the company

How is a collateral assignment used in a life insurance contract?

Transfers specific ownership rights to a creditor

When an individual buys insurance under a threat made by a producer, a violation has occurred under the

Unfair Trade Practice Act

At what point must insurable interest exist on a life insurance policy?

Upon application being taken

A producer completes an application with a client for $50,000 Life insurance policy. At what point the LATEST a Policy Summary and Buyers Guide must be given to the applicant?

Upon policy delivery

Which of these producers does standard nonforfeiture law apply to?

Whole life policies

According to CT's rules on disclosure, a life insurance applicant is expected to be provided with

a Buyer's Guide and Policy Summary

The Commissioner of Insurance may NOT suspend or revoke a producer's license until

a hearing is conducted and an order issued

An ___ insurer operates in the US but is headquartered outside the US

alien

Rebating is

an illegal practice in CT

An _____ agent is a producer who writes and places coverage for a specific insurance company.

appointed

Voluntarily terminating an insurance policy is also known as

cancellation

ABC insurance company submits a financial condition statement to the Commissioner requesting to conduct business in CT. The Commissioner approves the statement and then issues an

certificate of authority

All of the following MUST be included in a life insurance illustration EXPECT

company's mortality table

An _____ is a licensee who charges a fee for contracted insurance advisory services

consultant

Al surrenders his life insurance policy for its cash value. The total of the premiums paid into the policy minus total dividends received in cash or used to offset premiums is referred to as the

cost basis

According to the needs approach, an emergency reserve fund's primary purpose is to

cover the cost of unexpected expenses

A ______ ________is the signed document that starts the free-look period

delivery receipt

Which of these is NOT a legitimate insurance company?

domestic and foreign

Christopher is issued an insurance policy that contains an attached agreement which alters the terms of the policy. This attached agreement is called an

endorsement

When determining the accumulation value of a deferred annuity, the total is calculated by taking the premiums paid plus interest earned minus

expenses and withdrawals

A policyowner fell behind on the premium payments of a whole life policy and is now in the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan?

face amount minus the loan balance and past-due premium

In CT, an insurer licensed to conduct business in CT, but domiciled in New Jersey , is called an

foreign company

Insurable interest in one's own life is legally considered as

generally unlimited

A hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the Commissioner is required to

give written notice to the producer

A mutual insurance company

has no shareholders

A stock insurance company

is owned exclusively by its shareholders

The insurance coverage in a variable life insurance policy may vary based on the value of

its underlying investments

The death proceeds of a credit life insurance policy are typically paid to the

lender

After the extended term life nonforfeiture option is chosen, the available insurance will be

level term for a stated period of time

The Commissioner is empowered to perform each of the following acts EXCEPT

make rules that are consistent with those of negotiating states

The annuitant in a single premium deferred annuity

makes only one premium payment

Defamation occurs when a producer makes a false statement intended to

malign another insurer

If a producer fails to remit collected premiums to the insurance company, the producer may be in violation of

misappropriation

James the producer has sold a life insurance contract to a client without using an illustration, even though his insurer offers one. For this particular transaction, the applicant

must sign a statement that no illustration was provided

An unapproved insurer in CT is considered to be

nonadmitted

The Insurance Commissioner may issue an ___ to assure compliance with an insurance law

order

A life insurance policyowner sells her policy to a third party in a life settlement. Under this transaction, the policyowner

receives an amount less than the policy's death benefit

A producer has influenced an existing policyowner to convert an existing whole life policyto Reduced Paid-up insurance. The producer then sells the policyowner a new universal life policy. This transaction is called an

repIacement

Licensed producers in CT are authorized to

solicit, receive, and forward applications to the insurer

Contributions made by an employee to a qualified retirement plan are required to be

subject to a vesting schedule

An arrangement where an individual is authorized to act on behalf of another person or company is established through

the law of agency

Life insurance replacement regulation protects the interests of

the policyowners

A material change in modified endowment contract results in

the seven pay test, adjusted for cash value, applies again

When a producer replaces an existing life insurance policy based on misrepresentations, this is called

twisiting

Reinsurance is

used by insurance companies to share risks

T purchased a life insurance policy. T is entitled to review the policy and return it for a full refund

within 10 days after delivery of policy