G Life Exam

All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?

lowers

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy

$50,000

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False Advertising

Under which of the following annuity option does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?

Installments for a fixed period

When a replacement is involved, a replacing insurance company is responsible for all of the following EXCEPT

Provide a copy of the Important Notice Regarding Replacement of Life Insurance to the applicant

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

A situation in which a person can only lose or have no change represents

Pure risk

The policyowner pays for her life insurance annuity. Unitl now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Reduction of Premium

In case of a loss, the indemnity provision in insurance policies

Restores an insured person to the same financial state as before the loss

Which of the following is NOT a goal of risk retention?

To minimize the insured's level of liability in the event of loss

What kind of policy allows withdrawls or partial surrenders

Universal life

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract

Warranty

Which of the following best describes a misrepresentation

Issuing sales material with exaggerated statements about policy benefits

Which type of life insurance policy generates immediate cash value?

Single Premium

Which of the following products requires a securities license?

Variable Annuity

If a beneficiary is NOT named for annuity benefits, to which will the benefit be paid?

the annutiant's estate

Which of the following is TRUE about a class designation?

Beneficiaries are not identified by name

In reference to fixed annuities, what compromises most of a life insurance company's general account?

Conservative investments like bonds

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

An individual just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments What type of life insurance policy would be best suited to this situation?

Decreasing Term

Death benefits payable to a beneficiary under a life insurance policy are generally

Not subject to income taxation by the federal government

A straight life policy has what type of premium?

A level annual premium for the life of the insured

If a life insurance policy develops cash value faster than a seven-pay whole life contract. It is

A modified endowment contract

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

The insured may choose to convert to term or permanent individual coverage

After applying for an annuity, a 60-year old insured receives the completes contract on April 7. If he decides he doesn't want the contract, when must he return it

April 17

Which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy

Which of the following would NOT be considered an exception to the National Do Not Call List?

Calls based from outside of the United States

An applicant wants to buy a life insurance policy in which he can count on receiving the same benefits as stated in the contract. Which type should he buy?

Fixed

What are the two components of a universal policy?

Insurance and cash accounts

When is an insurer NOT required to state the coverage under which a claim payment is made?

Insurers are always required to disclose the coverage under which a claim is paid

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

Interest only option

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called

Paid-up additions

An insured has a Level Term Life Insurance Policy that is guaranteed renewable and also includes a re-entry provision. The re-entry provision would allow the insured to renew the policy and

Pay a lower premium by proving insurability

Which of the following is usually true of a participating life insurance policy?

Pay dividends to policyowner

What type of beneficiary designation allows the benefit to pass from a decreased primary beneficiary to the beneficiary's heirs, instead of spitting the benefit among surviving primary beneficiaries?

Per Stripes

Which of the following is TRUE regarding variable annuities?

The annuitant assumes the risks on investment

Which of the following are generally NOT considered when underwriting group insurance?

The insureds medical history

Who pays for the examination of an insuer's service fees to determine if they are exorbitant?

The insurer

All of the following statements concering the use of life insurance as an Executive Bonus are correct EXCEPT

The policy is owned by the company

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

Which of the following includes information regarding a person's credit, character, reputation, and habits?

Consumer report

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

When an employee terminates coverage under a group insurance policy, coverage continues in force?

For 31 Days

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 benefit

Which of the following will be included in a policy summary?

Premium amounts and surrender values

After an annuity contract is delivered, a contract holder has a free look period of

10 days

An insured just died. The insured's beneficiary promptly sent the insurer proof of death. According to Arizona Law, this insurer may now establish a period of time during which the settlement will be made. What is the greatest amount time the insurer can mandate this for a particular period?

2 months

How long is the grace period on a group life insurance policy?

31 days

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

Coverage ends and the policy cannot be reinstated

All of the following would be considered unfair settlement practices EXCEPT

Denying coverage to the terminally ill or disabled

Which is NOT a term for the period of time during which the annuitant or the beneficiary receives incom?

Depreciation Period

Which of the following insurance providers must be nonprofit and sell insurance only to its members?

Fraternal

The death benefit under the Universal Life Option B

Gradually increases each year by the amount that the cash value increases

A universal life has two types of interest rates that are called

Guaranteed and current

In insurance transactions, fiduciary responsibility means?

Handling insurer funds in a trust capacity

What authority is NOT stated in an agent's contract but is required for the agent to conduct business?

Implied

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

Indemnity

A couple near retirement is planning for their golden years. They want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving their benefits. Which settlement option should they choose?

Joint and Survivor

A couple near retirement planning for their golden years. They want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose?

Joint and Survivor

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Option B

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

According to the entire contract provision, what document must be made part of the insurance policy?

Copy of the original application

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and 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. The practice is considered?

Discrimination

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider

Which of the following is NOT true regarding Equity Indexed Annuities?

They earn lower interest rates than fixed annuities

How long will the beneficiary receive payments under the single life settlement option?

Until the beneficiary's death

The director may require a producer to submit fingerprints in all of the following situations EXCEPT

Upon insurer insolvency

If an insured changes his payment plan from monthly to annually, what happens to the total premium?

Decreases

Who makes changes to the policy once it is in effect

An executive officer of the insurer

Which of the following types of agent authority is also called "perceived authority"

Apparent

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash surrender

What limit the amount that a policyowner may borrow from a whole life insurance policy?

Cash value

The life and Disability Insurance Guaranty Fund protects insureds and policyholders if

Insurers lack money to pay off claims

What is the purpose of a conditional receipt

It is intended to provide coverage on a date earlier than the date of the issuance of the policy

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

One-year term option

What provision in a life or health insurance policy extends coverage beyond the premium due date?

grace period

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

The paid-up addition option uses the dividend

to purchase a smaller amount of the same type of insurance as the original policy

Which statement is NOT true regarding a Straight Life Policy?

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

Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?

The employer is the owner and beneficiary

Which of the following best describes annually renewable term insurance?

It is level insurance

Which of the following is TRUE regarding the annuity period?

It may last for the lifetime of the annuitant

On its advertisement, a company claims that it has that it has funds in its possession that are, in fact, not available for the payment of losses of claims. The company is guilty of

Misrepresentation

A prosective deferred annuity owner is concerned about what would happen if he surrendered the annuity before the annuitization period. The agent most likely explained which of the following?

Nonforfeiture option guarantees that the owner will receive a surrender value of the contract

An applicant wants to buy a policy that has a cash value element. Which type should she buy?

Permanent

Based on Human Life Value Approch, which of the following is NOT used to calculate an individual's life value?

Predicted needs of the family after the insured's death

The owner of a life insurance policy wishes to name two beneficiaries for policy proceeds. What will soliciting insurance producer say?

The policyowner can specify the way the proceeds are split in the policy

What must happen when an individual policy or annuity has been personally delivered to the policyowner?

The policyowner must sign a delivery receipt

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 true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium

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

When would life insurance policy proceeds be included in the insured's table estate?

When there are any incidents of ownership at the time of death

AN insured had paid only part of her total number of IRA premiums before she died. What effect will this have on the insured's estate?

Only the premiums paid will be included in the estate

According to the Replacement Rule, replacement of life insurance is defined as a process in which

A new policy is brought and an old policy is converted to a reduced paid-up policy

An insured pays $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristics f an insurance contract does this describe?

Aleatory

Which of the following would be considered a nonmedical insurance application?

An application on which the medical information is completed by the applicant and the agent only

Elijah and Mary are to receive the proceeds of a life insurance policy jointly until the first one dies. If either one should die within a specified time, the other one will receive benefits until the end of the specified time. This settlement option is known as:

Joint Life with Term Certain

The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE?

The beneficiary will receive the greater of the money paid into the annuity or the cash value

A corporation is the owner and the beneficiary of the key person life policy. If the corporation collects the benefit, then

The benefit is received tax free

An individual was insured under a group contract. He was just fired from his job and, subsequently, his coverage was terminated. How long does his insurer have to notify him of his right to convert that group policy into an individual policy?

60 days beyond the policy's next expiration date

What are two components of a universal policy?

Insurance and Cash Account

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

Reduced Paid-Up

Your client owns a Market Value Adjusted Annuity. In order to pay for a series of large, unexpected medical bills, he decides to surrender his policy prematurely. Which of the following will determine the penalty that the annuity owner will have to pay?

Current interest rate at the time of surrender