Insurance State Test LA

An insurance contact requires that both the insured and the insurer meet certain criteria conditions in order for the contract to be enforceable. What contract characteristic does this describe?

Conditional

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate.

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

Making comparisons between different policies.

What happens if a deferred annuity is surrendered before the annuitization period?

The owner will receive the surrender value of the annuity

An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?

When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health

What is the fine for using an unapproved assumed name by a producer?

$250

If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years would be taxable annually?

$3,000

An insurance owns $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

A producer has completed 40 hours of continuing education this licensing period. How many credit hours may be carried over to the next licensing period?

10 hours

A temporary license in this state is a valid for

180 days

Existing and replacing life insurers are required to keep copies of all summaries, notices, and statements used in sales transactions until the conclusion of their next examination by the Insurance Department, or for a period of at least

5 years

When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be competed by

A paramedic or examining physician at the insurer's expense

What documentation grants express authority to an agent?

Agent's contract with the principal.

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

Aleatory

Under which of the following circumstances would an insurer pay accelerated benefits?

An insureds diagnosed with cancer and needs help paying for her medical treatment

The LEAST expensive first-year premium is found in which of the following policies?

Annually Renewable Term

All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT

At distribution, all amounts received by the employees are tax free

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

Automatic premium loan

All of the following statements are correct regarding credit life EXCEPT

Benefits are paid to the borrower's beneficiary

Which of the following is a true comparison between annuities and life insurance?

Both annuities and insurance use morality tables

All of the following are personal uses of life insurance EXCEPT

Buy-sell agreement

Which component increases term insurance?

Death benefits

All of the following statements are true regarding tax-qualified annuities EXCEPT

Employer contributions are not tax deductible.

When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n)

Executive bonus

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Family term rider

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign

What type of annuity guarantees to pay an income to the annuitant each year as long as he lives, and upon death, the annuity will refund the remaining payments to a beneficiary?

Installment refund annuity

The Medical Information Bureau was created to protect

Insurance companies from adverse selection by high risk persons

Which of the following statements regarding HIV testing for life insurance purposes is NOT true?

Insurers are barred from requesting HIV testing

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

Issue the policy anyway and pay the face value to the beneficiary.

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?

It will increase because the insured will be 5 years older than when the policy was originally purchased

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement age at 65. What would be the right policy for this client?

Limited pay whole life.

Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decisions of the insurance company, are called

Material misrepresentations

An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?

Pay the policy proceeds only if it would have issued the policy

Which of the following is another term for the accumulation period of an annuity?

Pay-in period

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor Benefit

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

Premium amounts and surrender values

All of the following are examples of risk retention EXCEPT

Premiums

All of the following are characteristics of group life insurance EXCEPT

Premiums are determined by the age, sex, and occupation of each individual certificate holder.

The purpose of insurance regulation is to

Promote the public welfare

Equity indexed annuities

Seek higher returns

Which type of life insurance policy generates immediate cash value?

Single Premium

Which of the following would help prevent a universal life policy from lapsing?

Target premium

The interest earned on policy dividends is

Taxable

Children's riders attached to whole life policies are usually issued as what type of insurance?

Term

Which of the following entities establishes the Do-Not-Call Registry?

The Federal Trade Commission

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. five days later the applicant has to submit to a medical exam. If the policy is issued, what would be the policy's effective date?

The date of the medical exam

A father owns a life insurance policy in his 15 year old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

The insured's premiums will have to be waived until she is 21

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

The insureds' medical history

All of the following statements are true regarding installments for a fixed amount EXCEPT

The payments will stop when the annuitant dies.

What is the annuity period?

The period of time during which accumulated money is converted into income payments

All of the following are general requirements of a qualified plan EXCEPT

The plan must provide an offset for social security benefits

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A

Which type of life insurance policy allows the policy owner to pay more or less than the planned premium?

Universal life

An insured owns a insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

Universal life.

Which of the following types of policies allows for a flexible premium and a variable investment component?

Variable universal life insurance