insurance

Which of the following types of Insurance polices would perform the function of cash accumulation a) Term life b) Credit life c) Increasing term me d) Whole life

d) Whole life

Annuities Certain limit the amount paid by the annuity to a certain fixed a) Amount only. b) Period with a certain fixed amount. c) Period or fixed amount. d) Period only.

c) Period or fixed amount.

When an agent delivered an Insurance policy to the Insured, he collected the initial premium, as well as a document verifying that the Insured had not had any Injuries or Illness Since the application date. What is this document called a) Insuring Agreement b) Insurability Clause c) Statement of Good Health d) Statement of Insurability

c) Statement of Good Health

Who does the spendthrift clause in a life insurance policy protect? a) The policyowner b)The creditors c) The beneficiary d)The insured

c) The beneficiary

Insurance provides a means to a) Transfer a loss. b) Retain a loss. C) Avoid a loss. d) Eliminate a loss.

a) Transfer a loss.

Under normal circumstances, how long is a temporary license In this state valid for? a)up to three 60-dayterms b)90 days c) 1 year d)18 months

b)90 days

Which of the following is guaranteed under a variable whole life insurance policy? a) Cash value b) Stock performance c) Minimum death benefit d) interest rates

c) Minimum death benefit

An annuitant pays the annuity premium on the 14th of each month. Which of the following best describes this arrangement? a) level b) flexible c) Lump sum d) Single

a) level

When agents, brokers, or solicitors handle premiums for an insurer, they are acting in which capacity? a) Natural person b) As a fiduciary As a managing general agent (MGA) d) Legal representative with power of attorney

b) As a fiduciary

Varlable Ilfe Insurance Is regulated by all of the following entitles EXCEPT a)The Financial Industry Regulatory Authority (FINRA) b)The U.S. Department of Treasury c) The Securitles and Exchange Commission (SEC). d )The Department of Insurance and/or Financial Services.

b)The U.S. Department of Treasury

Varlable insurance and variable annuities are regulated by a) Departments of Insurance only. b) NAIC. c) SEC and FINRA only. d) SEC, FINRA and Departments of Insurance.

d) SEC, FINRA and Departments of Insurance.

All of the following are considerations under the needs approach planning for life Insurance EXCEPT a)Education fund. b) Insured's income. c) Emergency reserve funds d) debt cancellation

b) Insured's income

Which of the following would be required to become licensed as an insurance producer? a) A customer service representative who solicits no more than one policy a year b)Agency Supervisor whose actin Is do not include selling insurance c)A person whose activities are limited to insurance advertising d)An officer of an insurer who does not receive commissions

a) A customer service representative who solicits no more than one policy a year

Which of the following best describes the difference between joint Life and joint and survivor annuity payment options? a) Joint and survivor Days out a smaller benefit b) In Joint life option, the benefits stop after the first death. c) Joint life covers two or more d) Joint and survivor is a life contingency option

b) In Joint life option, the benefits stop after the first death.

Which dividend option will increase the death benefit? a) Reduced paid up b) Paid-up additions C) Accumulation d) extended term

b) Paid-up additions

Which of the following is NOT a characteristic of variable Insurance and annuities? a) Benefits are determined solely based on the policy premium. b) Cash value accumulates based on the performance of stocks. c) Benefits are not guaranteed. d) Cash value is adjusted for inflation.

a) Benefits are determined solely based on the policy premium.

Which type of authority is found in the agents contract? a) Express b) apparent c) implied d) assumed

a) Express

The owner of a whole Ilfe policy with an accidental death rider intentionally kIlls himself after having the policy for 18 months. What Is the Insurance company's course of action? a)Deny any payment of death benefit b)Deny only payment of the face amount but pay the rider Since suicide is an accident C) Pay the face amount only because suicide is not an accident d)Pay twice the face amount

a)Deny any payment of death benefit

If the policy summary for a life insurance policy is not given when the application is taken, when must the policy summary be given to the policyowner? a)When the policy is delivered b) Within 15 days of the application date c) Within 30 days of policy Issue d) When the policy is issued

a)When the policy is delivered

In order to get a nonresident license is this state, an agent must a) Surrender their License In their state of residence. b) Apply and pay a fee to a nonresident state that reciprocates. c) Pass the nonresIdent state exam and satisfy their continulng education requirements. d) Represent an agency located In this state

b) Apply and pay a fee to a nonresident state that reciprocates.

Which of the following terms refers to the nontaxable portion of each annuity benefit payment? a Principal b) Cost base c) Tax base d) Interest

b) Cost base

Which of the following is NOT a personal use of life Insurance? a) An individual buys Insurance to fund a buy-sell agreement. b) An individual buys insurance to provide future income to a surviving spouse. c) An individual bus cash value insurance to fund his childrens college education d) An individual buys insurance to help the family pay off the mortgage in case of premature death.

a) An individual buys Insurance to fund a buy-sell agreement

Which of the following statements Is true regarding advertising that the Insurance Guaranty Association would ensure payment of benefits in the event of insurel Insolvency? a)Insurers may choose whether to mention the Association in advertisements, but if they choose to do so, they must first pay a fee to the Department of Insurance b) If insureds ion the Association. thev will be protected financially if their insurers become Insolvent C) All advertisements of an Insurer must mention coverage by the Association d)Its an unfalr trade practice to mention the Association In advertisements.

d)Its an unfalr trade practice to mention the Association In advertisements.

Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination? a) Charging the Insured higher premiums based on life expectancy b) Charging the Insured higher premiums based on her race c) Making malicious statements about the insured based on his race d) Charging different premium rates to the Insureds in different insuring classes

B) Charging the Insured higher premiums based on her race

What type on Insurer uses a formal sharing agreement a) Mutual insurers b) Fraternal Benefit Societies C) Reciprocal insurers d) Stock insurers

C) Reciprocal insurers

An insured is on life support because he has sustained severe, Dermanent brain damage. His neurologist recommends ending life support. The Insured has a life Insurance policy through his employer, who would like to issue an accelerated death benefit. Which of the following needs to happen in order for accelerated death benefit to be paid? a )The insurer needs to Issue approval. b)No approval is necessary: It is up to the company to decide when accelerated death benefits are issued, since it is the policyholder and the insured is the certificate holder. c) The insured would need to issue approval; otherwise, it is not possible for the benefit to be paid in this situation. d) The beneficiary needs to issue approval

c) The insured would need to issue approval; otherwise, it is not possible for the benefit to be paid in this situation.

Which of the following is true regarding a joint llfe annuity? a) The payments go to a beneficiary upon the last death. b) The payments go to the surviving annuitant after the first death. c) The payments stop at the first death. d) The payments stop at the last death

c) The payments stop at the first death.

All of the following are general requirements of a qualified plan EXCEPT a) The plan must have a vesting requirement. b) The plan's benefit cannot discriminate In favor of the "prohibited group." c) The plan must be temporary d The plan must be approved by the IRS

c) The plan must be temporary

According to agency law, the agent always represents the a) Insurance company. b) Client. c) Public d) state insurance department

a) Insurance company

Which of the following bears the investment risk in a variable life insurance policy? a) The pollcyowner b) The agent c) the insurer d) The financial adviser

a) The pollcyowner

While completing a life Insurance application the applicant realizes that she should have answered an earller question differently. What should the agent do to make the necessary change? a)Cross out the Incorrect information and provide an explanation to the Insurance company b)Nothing. only a company officer can make any changes c) Cross out the Incorrect Information. write In the correct answer, and have the applicant initial the change d)White-out the Information, make the change, and have the applicant Initial the change

c) Cross out the Incorrect Information. write In the correct answer, and have the applicant initial the change

When a whole lIfe policy is surrendered for its nonforfeiture value. what is the automatic option a) Extended term b) Paid uo additions c) Cash surrender value d) Reduced paid up

a) Extended term

Which of the following are characteristics of term life insurance? a) Temporary protection, renewability, no cash value Adjustable premiums and automatic increases in face amount at any given age Coverage to age 100, cash value, and high premiums d) Nonforfeiture provisions and living benefits

a) Temporary protection, renewability, no cash value

What happens to the face amount of a whole Ilfe policy If the insured reaches the age of 100? a) The face amount is paid to the insured. b) It is paid to the insured's estate and the policy Is terminated c) It Is paid to the beneficiary in full d) The cash value and the face amount are paid to the insured.

a) The face amount is paid to the insured.

Life Insurance creates an Immedlate estate. Which of the following best explains this statement? a) The face value of the policy is payable to the beneficiary upon the death of the insured b) The policy has cash values and nonforfeiture values c) The policy generates Immediate cash value d) The death benefit will always be paid to the estate or the Insured.

a) The face value of the policy is payable to the beneficiary upon the death of the insured

All of the following are true of credit life EXCEpT a) The insured names the beneficiary b) The death benefit cannot exceed the amount of the loan c The premium payment is Included in the loan payment d) The creditor Is the policy-owner.

a) The insured names the beneficiary

Who would be allowed catch-up contributions? a)An IRA owner who contributes less than the allowed maximum amount b) Individuals who have dependents c) individuals age 50 or older d) Anybody who has a traditional IRA

c) individuals age 50 or older

All of the following are true regarding the waver of cost of insurance rider EXCEPT a) The rider expires when the insured reaches age 60. b) The rider waives insurance costs in the event the insured becomes disabled. c) The rider is only applicable to universal life policies. d) The rider cannot waive the cost of premiums that accumulate cash value.

a) The rider expires when the insured reaches age 60.

s the purpose or the Agents Report In the aolication process? a) To provide additional information about the applicant to the underwriters b To explaln polIcy features and benefts to the applicant To provide medical information about the applicant to the underwriters d) To give disclosure to the applicant

a) To provide additional information about the applicant to the underwriters

Which of the following statements Is true regarding SIMPLE plans? a)Contributions and earnings are tax-deferred until funds are withdrawn b)The employer cannot contribute to the plan C) The employer can contribute up to 5% of the employees annual compensation. d) The emplovee cannot contribute to the plan.

a)Contributions and earnings are tax-deferred until funds are withdrawn

Which provision may be added to a permanent life policy, at no cost, that insures that the policy will not lapse so long as there is cash value? a) Application to Reduce Premium option b) Automatic Premium Loan option c) Mode of Premium option d) Past Due Premium option

b) Automatic Premium Loan option

In credit life insurance, who is responsible for paying the policy premiums? a) Creditor only b) Borrower only c) Creditor and borrower equalls d) creditor and borrower

b) Borrower only

What tvoe of an interest rate Is guaranteed in universal life policies? a) Current interest rate b) Contract interest rate c) Nominal interest rate d) Adjustable Interest rate

b) Contract interest rate

An insured purchases a nonparticipating whole life policy. This policy includes all of the following EXCEPT Cash values. b) Dividends. c) A premium calculated closely to the cost of the insurance d) Permanent protection.

b) Dividends.

An Insurer incorporated under the laws of another state but doing buslness In this state Is considered a) Multi-national b) Allen. c) Domestic b) Foreign.

b) Foreign.

Under which of the following conditions would life Insurance proceeds be taxable by the federal government? a) If paid to the policyowner b) If there is a transfer for value c) If collaterally assigned to a lender d) If taken as a lump sum

b) If there is a transfer for value

One of the most important concepts in the calculation of the amount to be paid for a life settlement contract is a) Price-earnings ratic b) Life expectancy. c)Inflation. d)Morbidity

b) Life expectancy.

The Guaranteed Insurability Rider allows he owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT a) Marriage b) Purchase of a new home

b) Purchase of a new home

A licensed life agent wrote a policy that covers the life of his brother. Since the policyowner was related, the agent refunded the commission earned on this policy to the Insured. This would be considered a) Unfair discrimination. b) Rebating c) A permitted practice. d) A normal business practice.

b) Rebating

Which of the following types of Insurance products would be appropriate for an individual with a low Income and high Insurance needs? a) A variable annuity b) Term insurance c) Straight whole life d) paid-up at 65 insurance

b) Term insurance

In a life insurance application, all of the following signatures will be required EXCEPT The agent b) The home office underwriter. © The insured d) The owner (If different from the insured.

b) The home office underwriter

All of the following are true of group life insurance EXCEPT a) When the Insured terminates membership in the group the coverage can be converted to whole life b) The insureds each own their own contract. C) Evidence of insurability is usually not required. d) Premium rates are based upon the average age, gender and purpose of the group.

b) The insureds each own their own contract.

Who can request changes In premium payments, face value, loans, and policy plans? a)Producer b)Policyowner c)Beneficlary d) Contingent beneficiary

b)Policyowner

Which of the following Indicates the person upon whose lIfe the annuity income amount is determined? a) Owner b) Insured c) Annultant d) Beneficiary

c) Annultant

Which of the following is a correct statement about annuities? a)Variable annuities place the funds into the company s general account. b) fixed annuities have the annuitant assume the risks or investment. c) Fixed annuities do not proVide protection against inflation. d) Variable annuities guaranteed rate of interest.

c) Fixed annuities do not proVide protection against inflation.

The reduction of premium option uses the dividend to reduce a) The previous year's premium. b) The premium on any other policy owned by the policyowner. c) Next year's premium d)This year's premium.

c) Next year's premium

What is the cost of coverage based on for group life insurance? a The ratio of men to women b) The insureds' individualages c) The average age and the ratio of men to women d)The average age

c) The average age and the ratio of men to women

All of the following statements about indexed whole life Insurance are correct EXCEPT a) there is guaranteed minimum interest rate b) cash value depends on the performance of the equity index. c) The policy face amount remains level throughout the life of the policy

c) The policy face amount remains level throughout the life of the policy

All of the following are true of the Survivorship Life policy EXCEPT a) The premlum would be lower than In a oint life policy. It can insure more than 2 I/ves c) The premium is based on the age of each insured. d The death benefit is not paid until the last death

c) The premium is based on the age of each insured

Which of the following is TRUE regarding premium in a 10-year level premium policy? a) The premium will decrease at the end of the term. b) The premium will be level for the first few years of the policy, but will Increase by the 10th year. c) The premium will remain level for 10 years. d) The premium will. remain the same at renewal.

c) The premium will remain level for 10 years.

Which of the following policies can be described as a flexible premium adjustable life policy? a) Term Life b) Credit Life c) Universal Life d) Whole Life

c) Universal Life

An individual purchases a life insurance policy and lists his parents as the beneficiaries. He is able to change beneficiarles at any time. What type of beneficiary designation does the policy have? a) Contingent b) Primary c) revocable d) irrevocable

c) revocable

What is the exclusion ratio used to determine? a)the interest base and the payout base b) The benefit amounts to be pald to the annuitant c) the annuity benefit to be excluded from taxes d)The premium amounts to be included in taxes

c) the annuity benefit to be excluded from taxes

A loss resulting from which of the following would qualify for the accidental death rider coverage? a) a heath condition b) A disability c) A hazardous hobby d) An automobile accident

d) An automobile accident

Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options? a) The amount of payments is based on the recipient's life expectancy. b) The size of Installments decreases after certain period of time. c) Both guarantee payments for the life of the beneficiary d) Both guarantee that the principal and interest will be fully paid out.

d) Both guarantee that the principal and interest will be fully paid out.

all of the following are true of a nonqualifled deferred compensation plan EXCEPT a) It is a contractual agreement whereby the employee agrees to defer receipt of a portion of his compensation until retirement. disability or death b It does not require IRS approval C) It can be discretionary. d) Contributions are tax deductible.

d) Contributions are tax deductible.

statistical probabilities of loss for a particular class of insureds is best predicted when the insured group is a) Diverse. b) Older. c) Smaller. d) Larger

d) Larger

in a deferred annuity, the difference between the accumulation value and the surrender value is the a Mortality charge. b) Interest credit c Front end load. d) Surrender charge.

d) Surrender charge.

in life Insurance, which of the following is NOT required to have an Insurable interest in the insured? a) The policy owner b) The insured c) The applicant d) The beneficiary

d) The beneficiary