Finance Kansas License Practice Exam pt. 2

Which of the following would not be included in a policy summary? a. policy loan interest rates b. general advantages and drawbacks to this type of policy c. policy exclusions d. cash values

general advantages and drawbacks to this type of policy

Each willful violation of the insurance statutes regarding unfair methods of competition may result in fines up to a. $300 b. $500 c. $1,000 d. $5,000

$5,000

In life insurance contracts in this state, dividend payments may be deferred up to how many years? a. 2 years b. 5 years c. 7 years d. 10 years

5 years

All of the following would be different between qualified and nonqualified retirement plans EXCEPT a. Taxation of withdrawals b. Taxation of contributions c. IRS approval requirements d. Taxation on accumulation

Taxation on accumulation

Which of the following is NOT a possible punishment for a violation of general provisions of the Kansas Insurance Code? a. suspension of license b. cease and desist order c. a maximum fine of $10,000 for a willful violation d. a monetary fine up to $1,000 is a violation is nonwillful

a maximum fine of $10,000 for a willful violation

Which of the following products provides income for a specified period of years or for life, and protects a person against outliving their money? a. a group policy b. an annuity c. a survivorship policy d. a universal life policy

an annuity

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium a. reinstatement b. reduced paid-up option c. automatic premium loan d. extended term

automatic premium loan

An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called a. conditions b. utmost good faith c. acceptance d. consideration

consideration

The term "fixed" in a fixed annuity refers to all of the following EXCEPT a. equal annuity payments b. amount and length of payments c. death benefit d. guaranteed rate of interest

death benefit

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? a. defamation b. undercutting c. twisting d. slandering

defamation

Which of the following terms is used to name the nontaxed return of unused premiums? a. interest b. surrender c. dividend d. premium return

dividend

Which of the following is true regarding taxation of dividends in participating policies? a. dividends are not taxable b. dividends are taxable only after a certain amount is accumulated annually c. dividends are taxable in some life insurance policies and nontaxable in others d. dividends are considered income for tax purposes

dividends are not taxable

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? a. equal to the original policy for as long as the cash values will purchase b. in lesser amounts for the remaining policy term of age 100 c. equal to the cash values surrendered from the policy d. the same as the original policy minus the cash value

equal to the original policy for as long as the cash values will purchase

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) a. flexible annuity b. immediate annuity c. equity indexed annuity d. variable annuity

equity indexed annuity

The Medical Information Bureau (MIB) was created to protect a. insurance departments from lawsuits by policyowners b. insureds from unreasonable underwriting requirements by the insurance companies c. medical examiners that perform insurance physical examinations d. insurance companies from adverse selection by high risk persons

insurance companies from adverse selection by high risk persons

Which provisions of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid? a. beneficiary clause b. consideration clause c. insuring clause d. entire contract clause

insuring clause

Why is an equity indexed annuity considered to be a fixed annuity? a. it has modest investment potential b. it has a fixed rate of return c. it is not tied to an index like the S&P 500 d. it has a guaranteed minimum interest rate

it has a guaranteed minimum interest rate

Which of the following is an example of limited-pay life policy? a. level term life b. straight life c. life paid-up at age 65 d. renewable term to age 70

life paid-up at age 65

Which nonforfeiture option provides coverage for the longest period of time? a. extended term b. paid-up option c. accumulated at interest d. reduced paid-up

reduced paid-up

The Ownership provision entitles the policyowner to do all of the following EXCEPT a. assign the policy b. designate a beneficiary c. set premium rates d. receive a policy loan

set premium rates

Which of the following determines the length of time that benefits will be received under the fixed-amount settlement option? a. length of income period b. amount of interest c. size of each installment d. predetermined length of time stated in the contract

size of each installment

All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT a. the plan is a legal method of accumulating money for retirement needs b. the plan can discriminate as to who may participate c. the plan is not approved for favorable tax treatment by the IRS d. the employer can receive a current tax deduction for any contributions made to the plan

the employer can receive a current tax deduction for any contributions made to the plan

The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as a. the previous premium payments were high enough to create an excess of premium b. the policyowner cannot skip premiums without the policy lapsing c. the next month's premium is sufficient to cover both the current premium amount and the skipped amount d. the policy contains cash value to cover the cost of insurance

the policy contains cash value to cover the cost of insurance

Why should the producer personally deliver the policy when the first premium has already been paid? a. to make sure the policy is not stolen or lost b. to help the insured understand all aspects of the contract c. to ensure the producer gets paid commission d. to find out how the family has been doing since the initial presentation

to help the insured understand all aspects of the contract

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant a. upon issuance of the policy b. within 30 days after the first premium payment was collected c. prior to filling out an application for insurance d. with the policy

with the policy