insurance

In the event there is no beneficiary living at the time of death of an insured person, what is the maximum the Benefits Payments provision will pay to any person showing evidence of incurred funeral or other expenses incidental to the last illness or death of the insured person

$2,000

An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?

$3,000

Once the agent's appointment with the insurer has been terminated, how soon must the insurer mail a notice of termination to the agent?

15 calendar days

Agent P has a life license. How many hours of CE must be completed to complete Agent P's requirement?

16

A new set of continuing education hours must be completed every

2 years

An agent is licensed for life and property insurance. How many hours of CE is the agent required to earn every 2 years?

24

An insurance agent changes his residential address. Within what time period must the agent notify the Commission of the change

30 calendar days

An agent is convicted of a felony in another jurisdiction. Within what period of time must the agent report the felony charge to the Commission?

30 days

If the Commission determines the agent's appointment is invalid, within how many days will the Commission notify the insurer?

5 business days

After terminating an agent's appointment, an insurer must notify the agent within

5 calendar days

When an insurance producer is to charge an administrative fee to an insured, all of the following must be done EXCEPT

A copy of any fee disclosure must be provided to the insured.

All of the following must be included in the report to the Commissioner after an administrative action is taken against a licensed insurance agent EXCEPT

A copy of the agent's license.

A written notice of financial information collected by an insurer must include all of the following EXCEPT

A form granting perpetual access to the policyholder's banking accounts.

When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by a. a physician of the applicant's choice and at his expense b. a home office underwriter c. a paramedic or examining physician at the insurer's expense d. the agent

A paramedic or examining physician at the insurer's expense

Which of the following would be required to be licensed as an insurance producer?

A salaried employee who advertises and solicits insurance

Which of the following is another term for an authorized insurer?

Admitted

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?

Any form of life insurance

Employer contributions made to a qualified plan

Are subject to vesting requirements.

Which of the following is a feature of a variable annuity?

Benefit payment amounts are not guaranteed.

In terms of Social Security, what is the name for the time period after the youngest child of a family turns 16 and before the surviving spouse may start receiving retirement benefits?

Blackout period

To legally transact insurance in this state, an insurer must obtain which of the following?

Certificate of Authority

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?

Collateral assignment

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

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

Contracts of adhesion.

Which of the following will NOT be an appropriate use of a deferred annuity?

Creating an estate

What is another name for interest-sensitive whole life insurance?

Current assumption life

Which of the following is NOT a duty of the Commission of Insurance?

Examining each domestic insurer at least once a year

Which policy component decreases in decreasing term insurance?

Face amount

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

False advertising

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Guaranteed insurability option

What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account by the beneficiary?

Income tax on distributions and no penalty.

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an

Interest-sensitive Whole Life.

What is the main purpose of the Seven-pay Test?

It determines if the insurance policy is a MEC.

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT

It is a life contingency option.

When a reduced paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium.

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

It pays dividends to policyowners.

Which of the following applies to the 10-day free-look privilege?

It permits the insured to return the policy for a full refund of premiums paid.

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount.

When an applicant purchased a life insurance policy, the agent dated the application 4 months prior. When asked by the applicant, the agent said he was allowed to backdate policies up to 6 months if it would

Lower the insured's premium.

An insurance company has 30 agents that represent the company in its Northwest region. The agents each have their own satellite office in which they perform the agent duties. Numerous offices have developed marketing campaigns to increase sales. What is the company's duty regarding marketing communications in this example?

Make a file copy of any marketing materials used with the public

Which of the following is NOT true regarding policy loans?

Money borrowed from the cash value is taxable

Which of the following is NOT true regarding policy loans?

Money borrowed from the cash value is taxable.

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

Morale

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are

Not taxable since the IRS treats them as a return of a portion of the premium paid.

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A

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

Traditional IRA contributions are tax deductible based on which of the following?

Owner's income

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

Pay-in period

An insurer wants to obtain information from investigators regarding an applicant for insurance. What must the insurer do in order to legally acquire this information?

Present the insured with a Disclosure Authorization Notice

Which of the following is the most common way to transfer risk?

Purchase insurance

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Required a premium increase each renewal.

In order to receive a nonresident license in Virginia, a producer must be licensed in good standing, apply through the Commission, pay necessary fees, and

Reside in a state which reciprocates nonresident licenses.

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed waiver of premium.

Which two terms are associated directly with the way an annuity is funded?

Single payment or periodic payments

An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called

Single premium whole life.

Events in which a person has both the chance of winning or losing are classified as

Speculative risk.

All of the following would be different between qualified and nonqualified retirement plans EXCEPT

Taxation on accumulation

If an insurer becomes insolvent, which of the following would pay benefits to policyholders?

The Guaranty Association

Which of the following would provide an underwriter with information concerning an applicant's health history?

The Medical Information Bureau

An applicant for an insurance license passed his state licensing exam 7 months ago. He applied for his license yesterday. Which of the following is true?

The applicant must retake the exam and submit a new application and processing fees.

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

The annuitant 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.

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

The date of medical exam

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.

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?

The insured may renew the policy for another 10 years, but at a higher premium rate.

True regarding a market value adjusted annuity

The owner is guaranteed a fixed interest rate for a specific period of time.

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract.

Which of the following best describes what the annuity period is?

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.

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy.

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

They earn lower interest rates than fixed annuities.

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

This rider is available to all insureds with no additional premium.

What is the purpose of the regulations on life and annuity marketing practices?

To establish minimum standards for advertisement, solicitations and replacement of policies

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

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

The paid-up addition option uses the dividend

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

If 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

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

An insured owns a life 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

What kind of policy allows withdrawals or partial surrenders?

Universal life

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

Variable

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority

When selling or solicitating variable life insurance, an insurer must provide the State Corporation Commission with a financial statement every

Year

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

cash option

What type of premium do both Universal Life and Variable Universal Life policies have?

flexible

Annually renewable term policies provide a level death benefit for a premium that

increases annually

What type of life insurance policy may automatically increase the face amount of the policy as the Consumer Price Index increases?

indexed whole life

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?

inspection report

Under the fair credit reporting act, if a consumer challenges the accuracy of the information contained in a consumer of investigative report, the reporting agency must

respond to the consumer's complaint

Which of the following policies would be classified as a traditional level premium contract?

straight life

In the event a client refuses to provide information related to his or her tax status, investment objectives, or overall financial situation, and then enters into an annuity contract, who remains responsible for the suitability of an agent's recommendations?

the client

All of the following are true of key person insurance EXCEPT

the plan is funded by permanent insurance only

An insured stops making payments on a loan taken from his cash value policy. what will most likely happpen?

the policy will terminate when the loan amount with interest equals or exceeds the cash value