Insurance exam 6

#1. How long is the Commissioner's term of office? a) 2 years b) 3 years c) 4 years d) 6 years

4 years

#29. If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a) 7 days b) 10 days c) 3 days d) 5 days

5 days

#49. All of the following would be excluded from the regulation on life insurance solicitation EXCEPT a) A group life policy b) An annuity c) A term life policy d) A credit life policy

A term life policy

#60. Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years? a) A privacy notice b) A buyer's guide c) A policy summary d) A notice regarding replacement

A policy summary

#40. The minimum interest rate on an equity indexed annuity is often based on a) The annuitant's individual stock portfolio. b) The insurance company's general account investments. c) An index like Standard & Poor's 500. d) The returns from the insurance company's separate account.

An index like Standard & Poor's 500.

#78. 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? a) Cost of Living Rider b) Value Adjustment Rider c) Return of Premium Rider d) Inflation Rider

Cost of Living Rider

#7. Which policy component decreases in decreasing term insurance? a) Face amount b) Cash value c) Dividend d) Premium

Face amount

#17. 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? a) Paid-up addition b) Accumulation at interest c) Cash option d) Reduction of premium

Reduction of premium

#37. If the annuitant dies during the accumulation period, who will receive the annuity benefits? a) The annuitant's estate b) The beneficiary c) The annuity owner d) The insurance company

The beneficiary

#5. The violation of a cease and desist order may result in a fine of a) $3,000. b) $5,000. c) $7,500. d) $10,000.

$10,000

#52. An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out? a) $10,000 b) $40,000 c) $50,000 d) $60,000

$50,000

#62. 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

#6. All of the following are unfair claims settlement practices EXCEPT a) Failing to acknowledge pertinent communication pertaining to a claim. b) Suggesting negotiations in settling the claim. c) Refusing to pay claims without conducting a reasonable investigation. d) Failing to adopt and implement reasonable standards for settling claims.

Suggesting negotiations in settling the claim.

#25. Which of the following persons is required to hold a producer license? a) A person who administers employee benefits b) A person who negotiates insurance contracts c) A person who creates insurance advertisements d) A person who takes messages related to claims

A person who negotiates insurance contracts

#44. Which of the following best describes fixed-period settlement option? a) Only the principal amount will be paid out within a specified period of time. b) The death benefit must be paid out in a lump sum within a certain time period. c) Income is guaranteed for the life of the beneficiary. d) Both the principal and interest will be liquidated over a selected period of time.

Both the principal and interest will be liquidated over a selected period of time.

#56. Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE? a) Withdrawals are not taxable. b) Distributions before age 59 1/2 incur a 10% penalty on policy gains. c) Policy loans are taxable distributions. d) Accumulations are tax deferred.

Withdrawals are not taxable

#71. According to the Entire Contract provision, a policy must contain a) Buyer's guide to life insurance. b) Listing of the insured's former insurer(s) for incontestability provisions. c) A copy of the original application for insurance. d) A declarations page with a summary of insureds.

A copy of the original application for insurance.

#22. All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT a) The employer pays a bonus to a selected employee to fund the policy. b) It is considered a nonqualified employee benefit. c) The policy is owned by the company. d) Any type of insurance policy may be used.

The policy is owned by the company.

#82. What does "level" refer to in level term insurance? a) Face amount b) Premium c) Cash value d) Interest rate

Face amount

#65. Circulating deceptive sales material to the public is what type of Unfair Trade Practice? a) Defamation b) Coercion c) Misrepresentation d) False advertising

False advertising

#9. A Return of Premium term life policy is written as what type of term coverage? a) Renewable b) Level c) Increasing d) Decreasing

Increasing