Final Exam Primerica

In a noncontributory group policy

100% of eligible employees must participate

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?

100% participation of members is required in noncontributory plans

When the Superintendent holds a hearing for the purpose of examining evidence against a licensee charged with violation of Maine insurance laws, the licensee must receive how much prior notice of such hearing?

14 days

The policy summary must state the effective policy loan annual percentage interest rate for the policy's first

20 years

What is the minimum number of continuing education hours that must be completed on the topics of ethics?

3

Insurers must keep transaction records for at least

3 years

The Superintendent has a duty to examine each domestic insurer admitted to transact insurance in Maine at least once every

3 years

If by an order of the Superintendent, a person is a party to a hearing, how many days after receipt of notice does the person have for an appeal

30 days

Should an insurer terminate the appointment of an insurance producer for any reason not set forth in the law, the insurer must notify the Superintendent within

30 days

After the Superintendent has ordered a hearing, a person who is not a party to the hearing, but who is aggrieved by the order may appeal within how many days?

40 days

The term of service for the Superintendent of Insurance is

5 years

Policy loan request, except for loan requests for payment of due premiums, may be deferred for a period of up to

6 months

Which of the following is the required number of participants in a contributory group plan?

75%

Max has held a temporary license for 90 days. How many more days will the license be effective?

90

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be

Adjusted to the insured's age at the time of renewal

Which of the following is NOT one of the 3 kinds of life insurance illustration defined in Maine state law?

Advanced illustration

Which of the following CANNOT knowingly charge as premium or other charge applicable for the insurance, any amount that is not shown in the policy?

An insurance producer

The LEAST expensive first-year premium is found in which of the following policies?

Annually Renewable Term

A Universal Life Insurance policy is best described as a/an

Annually Renewable Term policy with a cash value account

In order to get a nonresident license in this state, a producer must

Apply and pay a fee to a nonresident state that reciprocates

If the insurer does not provide the applicant with a basic illustration, it must provide a policy summary. When must the policy summary be delivery?

At the time of policy delivery

Which of the following best describes fixed-period settlement option?

Both the principal and interest will be liquidated over a selected period of time

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

What does "liquidity" refer to in a life insurance policy?

Cash values can be borrowed at any time

The Superintendent will examine the affairs of any insurer to determine all of the following EXCEPT

Certificate of Authority

Which of the following elements of an insurance contract requires payment of premium?

Consideration

A licensee is paid solely to advise people about their insurance contracts. What kind of license did he have to obtain in order to do this legally?

Consultant

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

Contracts of adhesion

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated

What is another name for interest-sensitive whole life insurance?

Current assumption life

Insurance producers must comply with all of the following state continuing education (CE) requirements EXCEPT

Excess credit hours must be carried over from previous licensing periods

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

Fixed Period

Which is TRUE about the cash surrender nonforfeiture option?

Funds exceeding the premium paid are taxable as ordinary income

Life income joint and survivor settlement option guarantees

Income for 2 or more recipients until they die

Annually renewable term policies provides a level death benefit for a premium that

Increases annually

A Return of Premium term life policy is written as what type of term coverage?

Increasing

What are the two components of a universal policy?

Insurance and cash account

The Medical Information Bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons

During the partial withdrawal from a universal life policy, which portion will be taxed?

Interest

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an

Interest-sensitive Whole Life

Which of the following best describes annually renewable term insurance?

It is level term insurance

What statement is NOT true regarding a Straight Life policy?

Its premium steadily decreases over time, in response to its growing cash value.

What is the other term for the cash payment settlement option?

Lump Sum

A limited producers licenses can be produced by the Superintendent in all the following categories EXCEPT

Mortgage contracts

Cash Value guarantees in a whole life policy are called

Nonforfeiture Values

Which of the following is consideration on the part of an insurer?

Paying a claim

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor Benefit

Which of the following will be included in a policy summary

Premium amounts and surrender values

Which of the following individuals would be licensed to sell insurance?

Producer

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

The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT

Purchase of a new home

Which nonforfeiture option provides coverage for the longest period of time?

Reduced Paid-Up

If an agent wishes to sell variable life policies, what license must the agent obtain?

Securities

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Size of each installment

Which of the following actions does NOT constitute false advertising?

Stating that dividends are not guaranteed

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Survivor protection

Variable life insurance is regulated by all of the following entities EXCEPT

The U.S. Department of treasury

Who is responsible for the payment of an insurance producer's appointment fee?

The appointing insurer

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability

If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination?

The insurer

By what day must producers complete their continuing education?

The last date of the producer's birth month

Who pays the expenses of the examiners used in an examination required by the Superintendent?

The one being edxamined

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

Back in college, Bob was arrested on drug charges that were eventually erased from his records. After completing Medical School, he applies for a disability policy and does not reveal this information. His is issued a standard policy. Seventeen months later, he incurs a substantial claim due to a back injury. While investigating the circumstances of the claim, the insurance company discovers the earlier drug use. What will most likely happen?

The policy will be voided

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

According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

The primary beneficiary died before the insured

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy

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

The Superintendent may issue a temporary nonrenewable license without requiring an examination in all of the following cases EXCEPT

To an individual who purchases an existing insurance agency but has not taken the state license examination

What is the purpose of establishing the target premium for a universal life policy?

To keep the policy in force

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life- Option A

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?

Universal life

Which of the following is a key distinction between variable whole life and variable universal life products?

Variable whole life has a guaranteed death benefit

When can an insurance producer who does not have an appointment with an insurer place insurance coverage with that insurer?

When the producer does not receive a fee from the insured for his/her service

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than

With the policy

In Maine, a claim for payment of benefits covered under a policy of insurance is payable

Within 30 days of receipt of the proof of loss.

The two types of assignments are

absolute and collateral

All of the following are true about key-person insurance EXCEPT

the death benefit is taxable to the business