final exam west virginia life only

a group life insurance policy insured may assign up to ____ of the insureds coverage

100%

a group life insurance policy may assign up to ____ of the insureds coverage

100%

the insurance commissioner must give at least ____ days notice prior to holding a hearing regarding a producers license

15

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

20,000 death benefit

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

20-pay life accumulates cash value faster than striaght life

a labor union must have at LEAST _____ members to be issued a group life policy

25

if a life insurance policy's cash value is subject to loans exceeding _____ replacement is said to have occured

25%

A producer must notify the Commissioner within _____ days following the final deposition of an administrative action by any government agency

30

once the insurance commissioner makes a ruling after a hearing, an insured or insurer may request a hearing within ____ days

30

life insurance death benefits up to _____ are guaranteed by the west virginia life and health guaranty association

300,000

When an employee is terminated, how long does this employee have to convert group life coverage to an individual plan

31 days

Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?

5

a producer who intentionally violates an unfair trade practice law could receive a fine up to _____ per violation

5,000

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?

50,000

An insurer may normally delay the payment of a cash value loan or surrender value for up to

6 months

how long may an insurer defer granting a policy loan after receiving the loan application

6 months

a life policy loan in west virginia cannot charge a fixed rate of interest higher than

8%

C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true?

ABC is the policyowner, C is the insured, and ABC is the beneficiary

which of the following is NOT included in an annuity contract

AD&D rider

B the producer is not licensed to sell insurance in west virginia. If B sells an insurance policy in west virginia, who is responsible for unpaid claims for that policy

B the producer

When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?

NONE

K owns a whole life policy. If K wants an increasing death benefit to protect against inflation, which dividend option should she choose?

Paid-up additional insurance

Post-tax dollar contributions are found in

Roth IRA investments

which of the following are equity indexed annuities typically invested in

S&P 500

which of the following is NOT considered rebating

Sharing commission with an agent licensed in the same line of business

A Life insurance policyowner would like to take out a policy loan against the cash value in his Whole Life policy. The interest rate applied to this loan may vary over time. This is referred to as a ______ rate loan.

Variable

which of the following statements about noncontributory employee group life insurance is FALSE

a minimum number of employees is required to participate

which of these is NOT a reason for a business to buy key person life insurance

a pension deficiency if the key employee dies

which of the following is considered to be misrepresentation

a producer guaranteeing a policys dividends

which provision is not a requirement in a group life policy

accidental

B owns a whole life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of

additional whole life coverage at specified times

a contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of

adhesion

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will

adjust the death benefit to a reduced amount

All are true statements regarding the underwriting process, EXCEPT:

aids and HIV virus exams can be conducted in a discriminatory fashion

q purchases 500,000 insurance policy and pays 900$ in premiums over the 6 months. q dies suddenly and the beneficiary is paid 500,000. the exchange of unequal values reflects which of the following insurance contract features

aleatory

a ______ insurance company is one formed in another country other than the united states

alien

which of the following statements is correct regarding the tax treatment of a lump-sum payment paid to a life insurance policys primary beneficiary

all proceeds are income tax free in the year they are received

the consideration clause in a life insurance contract contains what pertinent information

amount of premium payments and when they are due

an example of false advertising would be

an insurer exaggerating its dividends in a magazine advertisement

Which premium schedule results in the lowest cost to the policyowner?

annual

to be eligible for social security disability benefits, an employee must be unable to perform

any occupation

when can a policyowner change a revocable beneficiary

any time

Before a life insurance policy is issued, which of these components of the contract is required?

applicants signature

what is the initial source of underwriting for an insurance policy

application containing statements from the insured

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?

at future dates specified in the contract with no evidence of insurability required

what action will an insurer take if an interest payment on a policy loan is not made on time

automatically add the amount of interest due to the loan balance

the automatic premium loan provision is designed to

avoid a policy lapse

which of these is NOT a valid reason for the insurance commissioner to deny a producers license renewal

bankruptcy

A domestic insurance company in West Virginia MUST

be incorporated and formed in west virginia

All of the following could result in the revocation of a producer's license EXCEPT

being charged with a misdemeanor for a driving incident

who is NOT required to sign a life insurance application

beneficiary

what is considered to be a characteristic of an immediate annuity

benefit payments start within one payment period of purchase

Variable Whole Life Insurance can be described as

both an insurance and securities product

a policy loan is made possible by which of these life insurance policy features

cash value provision

under an interest sensitive whole life policy

cash values are determined by interest rates

a whole life insurance policyowner does not have the right to

change the grace period

Sis covered by a whole life policy. which insurance product can cover his children

child term rider

which rider provides coverage for a child under a parents life insurance policy

child term rider

what does the west virginia life and health insurance guaranty association provide

claim payments of admitted, insolvent insurance companies

One definition of replacement is "the act of replacing an existing insurance policy with another". Replacement is

closely regulated and requires full disclosure

J is a producer who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this producer be found guilty of?

coercion

in west virginia, which of the following is considered to be an unfair trade practice

coercion

Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?

collateral assignment

which of these is a requirement for obtaining a resident insurance producer license in this state

complete a prelicensing exam

which of the following correctly explains the actions an agent should take if a customer wants to apply for a life insurance policy

complete the application and review the information with the customer prior to obtaining the customers signature, then send the application off to the insurance company

T is given a receipt After completing a life insurance application and paying the initial premium. Under this situation, T's coverage is

conditional, depending on the insurers underwriting guidelines

The incontestable clause allows an insurer to

contest a claim during the contestable period

insurance policies are offered on a take it or leave it basis, which make them

contracts of adhesion

If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?

contributory

When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?

conversion provision

D the agent met with a prospect and ended up selling an insurance policy. While filling out the insurance application, D makes a mistake. In this situation, D MUST

correct the information and have the prospect initial the change

which statement regarding the misstatement of age provision is considered to be true

coverage will be adjusted to reflect the insureds true age if a misstatement of age is discovered

which of these products does not require continuing education for the producer selling them

credit accident an sickness insurance

K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?

daughter

The Combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy

decreasing

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?

decreasing term

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?

decreasing term

additional coverage can be added to a whole life policy by adding a

decreasing term rider

A brochure including an untrue statement regarding a competitor's ability to pay claims is an example of

defamation

P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?

deferred

a 45 year-old woman won $100,000 in a scratch of lottery ticket. she purchased an annuity that will pay her $1,500 per month beginning at age 60. which of these annuities did this woman purchase?

deferred fixed annuity

A ____ ______ is the signed document that starts the free look period

delivery receipt

individuals in west virginia are personally invited to apply for life insurance on the basis of the offer. this type of solicitation made by the insurer is called

direct response

Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE?

each partner owns a 500,000 policy on their partners life

what is the purpose of the west virginia life and health insurance guaranty association

ensures that claims filed against insolvent insurance companies will be paid

which of these statements is incorrect regarding the federal income tax treatment of life insurance

entire cash surrender value is taxable

What provision in a life insurance policy states that the application is considered part of the contract?

entire contract provision

when an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. what exactly does a needs analysis involve

establishes the needs of the individual and his dependents

how often must an insurance producers license in west virginia be renewed

every two years

which of these statements about a guaranteed insurability option rider is NOT TRUE

evidence of insurability is not required when the option is exercised

replacement can be defined as

exchanging an existing policy for a new policy

N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?

exclusion

a _____ contained in a life insurance policy states that the policy will not cover certain risks

exclusion

a universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, cost of insurance, and the

expense charges

which of the following nonforfeiture options offers the highest death benefit

extended term

An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)

extra premium

What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?

face amount plus the policys cash value

what kind of life insurance pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of 30 years

family maintenance policy

P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies in a lump sum of 20,000 at the end of that 20 year period. What type of policy should P purchase?

family maintence policy

Taking receipt of premiums and holding them for the insurance company is an example of

fiduciary responsibility

in west virginia, an insurer licensed to conduct business in west virginia, but domiciled in new jersey is called a

foreign company

what action should a producer take if the initial premium is NOT submitted with the application

forward the application to the insurer without the initial premium

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT

free look period has expired

An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?

full face amount minus any past due premiums

the west virginia life and health guaranty association is

funded by admitted insurance companies through assessments

the west virginia life and health insurance guaranty association is

funded by admitted insurance companies through assessments

how does the west virginia insurance commissioner attain office

gubernationial appointment

variable life products require a producer to

hold a life insurance license and a securities license

In regards to representations or warranties, which of these statements is TRUE?

if matierial to the risk, false representations will void a policy

Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?

if toms employment is terminated, 20% of the funds would be forfeited

the type of annuity that can be purchased with one monetary deposit is called

immediate annuity

which of the following actions require a policyowner to provide proof of insurability in an adjustable life policy

increase face amount

Which of these actions should a producer take when submitting an insurance application to an insurer?

inform insurer to relevant information not included on the application

who approves continuing education courses in west virginia

insurance commissioner and the board of insurance agent education

What is being delivered during a policy delivery

insurance contract to the proposed insured

what is being delivered during a policy delivery

insurance contract to the proposed insured

Who has the option to renew a renewable term policy?

insured

in a key employee life insurance policy, the third-party can be all of the following except

insured

All of these statements about the Waiver of Premium provision are correct EXCEPT

insured must be eligible for social security disability for claim to be accepted

Variable annuities may invest premiums in each of the following, EXCEPT:

insurers corporate business account

The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n)

insuring agreement

in a life insurance contract, an insurance companys promise to pay stated benefits is called the

insuring clause

how are policyowner dividends treated in regards to income tax

interest on accumulations is taxed

all of these settlement options involve the systematic liquidation of the death proceeds in the event of the insureds death except

interest only

Quarterly premium payments increase the annual cost of insurance because

interest to the insurer is decreased while the administrative costs are increased

a policyowner would like to change the beneficiary on a life insurance policy and make the change permanent. which type of designation would fulfill this need

irrevocable

which type of life insurance beneficary requires his/her consent when a change of beneficiary is attempted by the policyowner

irrevocable beneficiary

the accidental death and dismemberment AD&D provision in a life insurance policy would pay additional benefits if the insured

is blinded in an accident

a license may be denied, suspended, or revoked if the licensee

is found guilty of misrepresentation

A stock insurance company

is owned exclusively by its shareholders

dividends paid from a life insurance policy are

issued by the insurer

On January 8, an applicant filled out and application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?

january 26

An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?

key person insurance

which of these are not an example of a nonforfeiture option

life income

an insureds inability to perform two or more activities of daily living may trigger which type of life policy rider

long term care

which of these is an element of a single premium annuity

lump sum payment

defamation occurs when a producer makes a false statement intended to

malign another insurer

Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the

marital deduction

which of the following provides funding for the west virginia life and health guaranty

member company assets

Convincing a prospective insured to buy an insurance policy based on exaggerations is called

misrepresentation

Which Unfair Trade Practice involves a producer suggesting that an insurance policy is like a share of stock

misrepresentation

Which Unfair Trade Practice involves a producer suggesting that insurance policy is like a share of stock

misrepresentation

an insurance applicant made a fraudluent statement on the application for the purpose of obtaining money benefits from an insurer. the applicant is guilty of

misrepresentation

which unfair trade practice involves a producer telling a prospective client that a policys dividends are guaranteed

misrepresentation

Which type of policy is considered to be overfunded, as stated by IRS guidelines?

modified endowment contract

When a life insurance policy exceeds certain IRS table values, the result would create which of the following?

modified endowment contract (MEC)

J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of Life Insurance policy is this?

modified premium life

All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for

modified whole life

which of these statements may a producer make to a client about a whole life policy

nonforfeiture benefits will be available after a period of time

a producer who is a resident in another state but licensed to transact insurance in west virginia is called a

nonresident producer

which statement is true regarding a minor beneficiary

normally, a guardian is required to be appointed in the beneficiary clause of the contract

T is an insurance license applicant who intends to primarily engage in insurance transactions on himself and his family. If the insurance department is made aware of this, T will most likely

not be issued a license

in an individual retirement account (IRA), rollover contributions are

not limited by dollar amount

which of these actions is NOT required when a producer replaces an existing individual life insurance policy

obtain the beneficiary's signature

an example of rebating would be

offering a client something of value not stated in the contract in exchange for their business

all of these statements concerning settlement options are true, EXCEPT

only the beneficiary may select

which of these contracts fall under replacement regulations

ordinary life

M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?

pay face amount minus the past due premium

which of these statements concerning an individual straight life annuity is accurate

payments are made to an annuitant for life

insurance policies are considered aleatory contracts because

performance is conditioned upon a future occurance

which of these do NOT constitute policy delivery

policy issued with a rating

life insurance replacement regulation protects the interests of the

policy owner

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the

policy proceeds

When an employee is terminated, which statement about a group term life conversion is true?

policy proceeds will be paid if the employee dies during the conversion period

Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?

policyowner

who has the right to change a revocable beneficiary

policyowner

which is true concerning a variable universal life policy

policyowner controls where the investment will go and selects the amount of premium payment

which of the following information is not required to be included i a whole life policy

policys guaranteed dividend table

a policyowner is able to choose the frequency of premium payments through what policy feature

premium mode

a limited-pay life policy has

premium payments limited to a specified number of years

which of the following actions is NOT possible with a universal life policy

premiums may be applied as a credit against income tax

consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determind

probability of making timely premiuim payments

consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine

probability of making timely premium payments

why does west virginia require producers to obtain a license to solicit insurance

public protection

which of these provisions require proof of insurability after a policy has lapsed

reinstatement

the provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called

reinstatment

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

replacement

S the producer is charged a fee for placing an insurance policy. Under West Virginia law, S must

report the placement to his primary insurer

statements made on an insurance application that are believed to be true to the best of the applicants knowledge are called

representations

a prelicensing course must be successfully completed for which of the following

resident producer

Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?

return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company

Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant?

risk classification

what is the suicide provision designed to do

safeguard the insurer from an applicant who is contemplating suicide

what is old age and survivors health insurance (OASDHI) also known as

social security

Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?

split dollar plan

K is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which of these policies best fits her needs?

straight life

what type of life insurance are credit policies issued as

term

which of the following is true if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?

the account can be rolled into the surviving spouses IRA

which of the following statements is correct about an agent who is taking an insurance application

the agent should have the applicant initial any changes made on the application

C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most?

the cost

the most important factor to consider when determining whether to convert term insurance at the insureds attained age or the insureds original age is

the cost

whole life insurance is sometimes referred to as "straight life". what does the word "straight" indicate when using this phrase?

the duration of premium payments

what is the underlying concept regarding level premiums

the early years are charged more than what is needed

a noncontributory group term life plan is characterized by

the entire cost of the plan is paid for by the employer

A policy of adhesion can only be modified by whom

the insurance company

a policy of adhesion can only be modified by whom

the insurance company

which statement regarding the change of beneficiary provision is true

the policyowner can change the beneficiary

B the producer is scheduled for a pretrail hearing in a criminal prosecution. which of the following does NOT need to be submitted to the insurance commissioner prior to Bs hearing

the posted bond

the advantage of reinstating an original life policy is

the premiums are based on a younger age

which of the following is a requirement to attain a nonresident producer license

the producers state of residence must have reciprocity with this state

under a renewable term policy

the renewal premium is calculated on the basis of the insureds attained age

an individual who purchases a life annuity is given protection against

the risk of living longer than expected

what is the basic function of an annuity

the systematic liquidation of accumulated funds

The reason for backdating a policy is

to obtain a premium rate based on an earlier age

B the producer sold an insurance contract to a client. B has engaged in

transacting insurance

which of the following is a requirement to attain a west virginia resident producer license

trustworthiness and competence

according to west virginia law, a group life insurance policy requires at LEAST ____ insureds

two

a variable annuity has which of the following characteristcs

underlying equity investments

The Cash value in a(n) _____ life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors.

universal

when is the face amount paid under a joint life and survivor policy

upon the death of the insured

What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?

variable

in order to sell a ____ life policy, a producer is required to register with the financial industry regulatory authority (FINRA)

variable

life insurance immediately creates an estate upon the death of an insured. which of the following policies is characterized by a guaranteed minimim death benefit?

variable life

which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

variable life

the part of a life insurance policy guaranteed to be true is called

warranty

a 20,000 life insurance policy application is completed, however the producer does not collect the initial premium. at what point does the coverage go into effect

when the applicant receives the policy and pays the initial premium

What does the ownership clause in a life insurance policy state?

who the policyowner is and what rights the policyowner is entitled to

Y purchased 100,000 worth or permanent protection and himself and 50,000 worth of 10-year term coverage for his wife on the same policy. which of these policies did Y purchase

whole life policy with an other insured rider