insurance 3
Reciprocity
An agent in Ohio wants to become an agent in North Carolina. The Commissioner will waive certain examination requirements, provided that Ohio would waive these same requirements if a North Carolina agent sought licensure in Ohio. What term does this describe?
$100,000
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
Increases annually.
Annually renewable term policies provide a level death benefit for a premium that
What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy?
Modified life
Before the Commissioner will issue a broker's license, the licensee must obtain a bond for at least
$15,000
The coverage period
An Adjustable Life policyowner can change which of the following policy features?
6
An agent has completed a total of 30 hours of continuing education (CE) during a license renewal period. How many of these hours may the agent apply toward the next CE compliance period?
The original age is used for premium determination
What is the advantage of reinstating a policy instead of applying for a new one?
Payor Rider
When an adult insures a child, premiums will be waived until the child reaches 21, if the adult dies or is disabled
The required privacy disclosure notice must be provided by insurer to current policyholders at least once in any period of
12 months
Increasing
A Return of Premium term life policy is written as what type of term coverage?
The producer applies for a shared commission form for that fiscal year.
A friend helped an insurance producer sell an insurance policy. The producer can share the commission with the friend if
To establish fair and marketable advertisement procedures.
All of the following identify purposes of the Insurance Information and Privacy Act EXCEPT
Modified Life
B just bought a new car, which he anticipates will be paid for 4 years from now. He also wants to buy a life insurance policy, but is financially limited until the car is paid off. Which of the following types of policies would be best for B?
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?
Cost of Living Rider
6 months
For how long is an insurance company allowed to defer policy loan requests?
They are not included as income for the employee, but are taxable upon distribution.
How are contributions to a tax-sheltered annuity treated with regards to taxation?
Considered true to the best of the applicant's knowledge.
Representations are written or oral statements made by the applicant that are
All of the following statements about equity index annuities are correct EXCEPT
The annuitant receives a fixed amount of return.
One-year term option.
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
Signed waiver of premium.
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
Coverage ends and the policy cannot be reinstated.
When a policy is surrendered for its cash value
Cash value
Which of the following components must a life insurance policy have to allow policy loans?
Fixed premium
Which of the following is NOT a characteristic of universal life insurance?
Limited Pay Whole Life policy
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
All of the following information about a customer must be used in determining annuity suitability EXCEPT
beneficiary's age
Graded premium whole life
lower premium and increase over time then become level
The Commissioner may suspend or revoke the person's license
If a licensee fails to notify the Commissioner of insurer insolvency, if known or suspected, and to provide a statement of relevant facts, which of the following is TRUE?
the policy owner
In a viatical settlement, who is considered the viator?
Endorsement method
In which of the following methods of changing a beneficiary does the policyowner send the contract to the home office of the insurer for approval and change?
Cash option
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
30 days
If the Commissioner denies an initial application for an agent, how long does the applicant have to request a review after receiving notification of the denial?
Variable whole life has a guaranteed death benefit.
Which of the following is a key distinction between variable whole life and variable universal life products?
Mutual funds.
A variable policy's death benefit and cash value is based on a distinct pool of investments. These are held in separate accounts that act like
Beneficiary's consent
An insurance contract must contain all of the following to be considered legally binding EXCEPT
$9,800
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?
Jumping juvenile policy
If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?
15
Insurance companies are required to provide proof of loss forms to the claimant within how many days after receipt of notice of loss?
The length of coverage.
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
Blackout Period
In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse turns age 60 called?
Reduced Paid-Up
Which nonforfeiture option provides coverage for the longest period of time?
$50,000
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?
It is level at the beginning and increases after the first few years.
In Modified Life policies, what happens to the premium?
It is level term insurance.
Which of the following best describes annually renewable term insurance?
Refuse to issue the license and notify the applicant in writing.
If the applicant has not fully met the requirements for licensing, the Commissioner wil
Lump-sum death benefits are not taxable.
Which of the following statements is TRUE concerning whole life insurance?
Issue the policy anyway and pay the face value to the beneficiary.
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process. the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case. the insurance company will
Life income with period certain
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original dies, the payments will continue to a designated beneficiary?
The death benefit must be paid out in a lump sum within a certain time period.
Which of the following best describes fixed-period settlement option?
Depreciation period
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Making comparisons between different policies
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?
It does not guarantee that the entire principal amount will be paid out.
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?
universal option a
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Policy loans are tax deductible.
Which of the following statements is TRUE concerning whole life insurance?
Discriminating in benefits and coverages based on the insured's habits and lifestyle
Which of the following will NOT be considered unfair discrimination by insurers?
Term rider
Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?
The premium can be raised up to a guaranteed maximum rate.
Which of the following is TRUE regarding an indeterminate premium whole life policy?
Annually Renewable Term policy with a cash value account.
A Universal Life Insurance policy is best described as a/an
The friend is licensed in the same line of insurance.
A friend helped an insurance producer sell an insurance policy. The producer can share the commission with the friend if
30 days
A licensee who ceases to maintain residency in North Carolina is required to deliver any insurance licenses to the Commissioner by mail or in person within how many days after terminating residency?
A level annual premium for the life of the insured
A straight life policy has what type of premium?
Copy of the original application
According to the entire contract provision, what document must be made part of the insurance policy?
Beneficiary's: age
All of the following information about a customer must be used in determining annuity suitability EXCEPT
Issue the policy that is requested.
As a field underwriter, a producer is responsible for all of the following tasks EXCEPT
Taxable.
The interest earned on policy dividends is
The type of investment.
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
The policyowner pays for her life insurance annually. Until 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
Which of the following types of annuities will generally provide the highest monthly income?
Straight life
Attorney General.
The Commissioner reports any violations of insurance laws and regulations to the
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association
5 years
The reinstatement provision in life insurance policies in this state allows an owner of a lapsed policy to reestablish it within how many years?
Fixed or variable.
The two main categories of policy loan interest rates are
Absolute and collateral.
The two types of assignments are
Increasing Term
The type of term insurance that provides increasing death benefits as the insured ages is called
Increasing term.
The type of term insurance that provides increasing death benefits as the insured ages is called
Only for the life of the annuitant
Under a pure life annuity, an income is payable by the company
$5,000,000
Under the L&H Guaranty Association, the maximum benefit one contract holder may receive in benefits, regardless of the number of contracts held, is
The insurer suspects criminal activity and fraud.
Under which of the following circumstances would a pretext interview be permissible?
Which of the following statements would best describe the difference between viatical settlements and accelerated death benefits?
Viaticals are funded by a third party; accelerated death benefits are provided by the insurer that issued the original policy.
180 days
What is the maximum duration of a temporary license?
Flexible
What type of premium do both Universal Life and Variable Universal Life policies have?
Return the premium to Y's estate, since it has no obligation to pay the death claim.
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reiect the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will
It is reduced to the amount of what the cash value would buy as a single premium.
When a reduced paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?
They can convert their coverage to permanent life insurance without evidence of insurability.
When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family members that are covered under the policy?
Indemnity
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?
Extended term
Which nonforfeiture option provides coverage for the longest period of time?
Benefit payment amounts are not guaranteed.
Which of the following is a feature of a variable annuity?
Warranty
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Option B
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Paid-up option
Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?
An endowment policy
Your customer doesn't mind paying a higher premium as long as he gets a life insurance product that would allow for a faster growth of the cash value. What kind of policy would you recommend?