Life
A term policy with a fixed face amount that remains the same for the entire period of coverage is called level term. Which of the following statements is true about level term?
All of the above { Level term can be issued for an annual period, Level term can be issued for a specified number of years or until the insured reaches a certain age, Premiums can be increased annually.}
If an insurance policy is cancelable, surrendered or premium payments stop, the Nonforfeiture option protects the policy owner's investment. Which of the following is a nonforfeiture option?
All of the above {Reduced paid up insurance, Cash surrender value, Extended term insurance}
Samantha purchased a universal life police a few years ago. The death benefit in the policy at that time was $200,000. With a current cash value of $50,000, she has selected death benefit option B. How much is her current death benefit?
$250,000
How much is the maximum contribution for a defined contribution plan in 2015?
$53,000
Decreasing term policies are useful for protecting such things as an unpaid mortgage balance. Steve bought a 20-year, $200,000 decreasing term policy in 2001 to cover the balance of a loan on his home. He also bought a $500,000 whole life policy. Steve died in 2006. What were the total benefits payable to his beneficiary?
$650,000
What is the grace period for the payment of a life insurance premium?
1 month
All of the following are true concerning a single premium whole life plan EXCEPT:
100% of any withdrawal is tax free
An agent must wait 10 days to accept a replacement life insurance policy if they have been licensed less than how many days?
120 days
After receiving proof of death, how much time does an insurance company have to provide the settlement for a life insurance policy?
2 months
In an attempt to prevent individuals intending to commit suicide from purchasing life insurance, insurance companies now include a suicide clause in all policies. What is the length of time that the suicide clause is in effect?
2 years
In an attempt to prevent individuals intending to commit suicide from purchasing life insurance. Insurance companies now include a suicide clause in all policies. What is the length of time that the suicide clause is in effect?
2 years
How many hours of continuing education are required to renew a producer license and how often must the producer meet these requirements?
24 hours every 24 months
How many hours of continuing education requirements must have a concentration in ethics?
3
For individuals taking continuing education courses in order to renew a license, they must complete how manny hours of ethics courses?
3 hours
A waiver or premium rider allows for the continuation of a policy should the insured become disabled. There is a waiting period of _________ for the premiums to be waived, and the waiver _______________.
3 or 6 months, and continues for the duration of the disability.
How long must a policy be in force before the policyholder is allowed to receive a loan on the cash surrender value of their policy?
3 years
How many days does a nonresident insurance producer have to notify the Commissioner that they are moving from one state to another?
30 days
How many days does the Commissioner have to notify an individual that their application for a license is being denied?
30 days
Randy (an insured) has submitted a written request to his property and casualty insurer - asking for a loss information for three previous policy years. How long does the insurance company have to reply?
30 days
Randy (an insured) has submitted a written request to his property and casualty insurer- asking for loss information for the three previous policy years. How long does the insurance company have to reply?
30 days
Which of the following is a CODA plan?
401(k)
A rider that allows the insured with a terminal illness to receive benefits prior to death is an accelerated benefit rider. Which of the following is not a qualifying condition that would allow benefits to be paid under this rider?
A condition not requiring confinement in a hospital or nursing facility for the remainder of their life.
A unilateral contract is:
A contract that makes a promise or promises in exchange for a performance.
Which of the following describes a Buyer's Guide?
A document that contains state of Tennessee Department of Insurance rules
An employee receives a certificate of coverage to show evidence of coverage. He is covered by:
A group policy
No insurer shall offer more than one group policy of insurance to a person unless they are licensed, at a minimum, as ______________.
A limited lines producer
Timothy has a policy that provides coverage for life, but the premiums are not due beyond age 65. It has guaranteed premium, accumulates cash value and the coverage will never decrease. Timothy has purchased:
A limited pay life policy
One type of policy provides the option for the policy owner to pay for the entire policy over a specific and usually shorter period of time. This policy grows cash value faster than ordinary life and matures when the insured reaches are 100 or dies. This policy is called:
A limited-payment whole life
Bobbie flies experimental aircrafts. She has been a stunt pilot for nearly 15 years. How does this impact her ability to get life insurance?
A policy could be written with an aviation exclusion
An insurance policy is a legal contract, based on contract law. It is a contract where ___________ is exchanged for valuable consideration (i.e. premiums).
A promise of benefits
An application for insurance is considered to be:
A written request by the applicant to an insurer requesting the insurer the issuance of a policy on the basis of the information provided in the application.
James has been diagnosed with terminal cancer. In order for James to maintain a reasonable quality of life, he must undergo very expensive treatment, not fully covered by medical insurance. James should check his life insurance policy to determine if he has this feature:
Accelerated death benefit
Nancy has purchased a health policy that contains a pre-existing condition clause. The insurance uses this clause to prevent:
Adverse selection
Life insurance has rules and regulations pertaining to how an agent or insurer can advertise their products. All of the following are true statements regarding the advertising rules and regulations EXCEPT:
Advertisements must specify the details of the investment and expected profit.
Which of the following classification of employees is not used for the purpose of determining group insurance eligibility?
Age or gender
When presented with life insurance options, Jonathan opted for a variable life policy. Which of the following is a major difference between a variable life policy and a universal policy?
All of the above { The cash value of a variable life policy are not guaranteed; A variable life contract is regulated as a security; The insurer is required to establish a separate account for variable products}
Policies routinely exclude certain risks. These exclusions are detailed in the policy. Which of the following would be such an exclusion?
All of the above {A military pilot dies flying a fighter plane, A stunt rider dies trying to leap 25 buses on a motorcycle, A medic dies in a war zone}
An insurer must provide a copy of the Buyer's Guide and Policy Summary to which of the following?
All of the above {Any prospective purchaser; Anyone who is purchasing a policy; Everyone who purchased a policy}
Which of the following are factors used to determine the level of adjusted gross income of an individual, for tax purposes?
All of the above {Is the taxpayer single; If married, is the taxpayer filing a joint return; Is the taxpayer disabled}
Term insurance is the least expensive form of life insurance. Because it is less expensive, term insurance has which o the following drawbacks?
All of the above {It has no living benefits; It is an expensive tool if looked at for the long term; The nature of the policy could leave the insured with no life insurance protection when he/she needs it the most.}
Joe and Margaret are trying to determine how benefits will be paid on Joe's life insurance policy when he dies or the policy matures. There are a variety of settlement options to choose from. Which of the following is a settlement option that the policy owner can choose>
All of the above {Life income option, Interest only option, Fixed period option}
Policyowners have a number of settlement options to choose from when they are determining how benefits are to be paid. Which of the following is a settlement option that the policy owner can choose?
All of the above {Life income option, Interest only option, Fixed period option}
One approach to determining how much life insurance a person will require is the "Needs approach". Any of the following should be considered in a needs calculation EXCEPT:
Amount needed to retire comfortably
A foreign insurer is:
An insurance company conducting business in a state in which it wasn't incorporated.
Harvey recently purchased a life insurance policy. There is a schedule that shows the premiums will increase each policy anniversary based on his current age. Harvey has purchased:
Annual renewable term
A Life Insurance Cost Index which reflects dividends or an Equivalent Level Annual Dividend is ---- .
Based on the company's current dividend scale and is not guaranteed.
A(n) ________________ is a corporation, association, partnership, limited liability company, limited liability partnership, or other legal activity.
Business Entity
Certain rules of construction are used to interpret a contract. All of the following are among the five main areas commonly used by the court when reviewing contracts EXCEPT:
CONDITIONS
Some retirement plans are deemed non qualified and do not have the tax benefits of qualifies plans. A non qualified plan:
Can be a deferred compensation plan
Which of the following statements is false regarding continuing education requirements?
Certificate of completion for courses previously submitted and approved for credit are approved for unlimited retake
The practice of using misrepresentation to induce a policyholder to replace a policy issued by the insurer the producer represents is called:
Churning
Insurers can set different premium rates for different individuals based on:
Classifications that result from cost experience
An application for insurance may pay an initial premium with the application The document issued is called:
Conditional receipt
Martin has received a new health insurance contract from his agent. He asks his agent if he can request a few changed in the contract. The agent advises Mark that this is a "take it as is or leave it" situation. With this in mind, a health insurance contract is known as:
Contract of Adhesion
Nonforfeiture options are guarantees, required by law, in life policies that build cash value. Which of the following is a nonforfeiture option?
Conversion option
Nonforfeiture options are guarantees, required by law, in life policies that build cash value. Which of the following is not a non forfeiture option?
Conversion option
John told a potential customer that a different insurance producer just got divorced and was losing his home in a settlement. What unfair trade practice is he guilty of?
Defamation
All of the following constitute unfair claim settlement or compromise practices EXCEPT:
Delaying claims in order to conduct an investigation
Claudia has named her husband Mike as a revocable beneficiary on her life policy. She is aware that as the policy owner, she can change the beneficiary at any time. She cannot however change the beneficiary by _________________.
Designating the change of beneficiary in her will.
When Mr. Sanders dies, the death benefit is paid to Diane. If Diane dies before Mr. Sanders, the benefits would go to Jane. Which of the following is true?
Diane is the primary beneficiary, Jane is the contingent beneficiary.
LMO Insurer is incorporated in New Hampshire, conducts business in all of the Eastern Seaboard states and in Germany. How is LMO Insurer classified in New Hampshire?
Domestic
Annuity owners have choices on how they want to pay their premiums. Which of the following is not a payment option to the annuity owner?
Dual premium option
What is the term for the period when an individual is eligible for coverage under a contributory plan and may enroll in the group plan?
Eligibility period
Joe and Margaret are trying to determine how benefits will be paid on Joe's life insurance policy when he dies, or the policy matures. There are a variety of settlement options to choose from. Which of the following is not a settlement option?
Extended term option
Combination plans are intended to be representative of the needs of the insured. One such plan is called the _______________. It combines ordinary life and level term insurance. It provides monthly income for a stated period of 10,15, or 20 years, or to an age - as selected by the insured.
Family maintenance policy
What governmental agency operates the Fair Credit Reporting Act?
Federal Trade Commission
Which of the following best describes an insurer that is a charitable organization providing insurance only to its members?
Fraternal benefit society
Group insurance plans for non-employer groups in which the insured pays all the premiums are called:
Fully contributory plans
Uma is an agent, and she has completed an application for health insurance on a new customer. When she returns to the office, she notices that a few items have been left blank. Uma should:
Go back to the customer and have them initial the changes
All of the following are defined contribution plans EXCEPT:
Group deferred annuity
Underwriting considerations for group coverage employ which of the following considerations.
Groups usually do not have a requirement for medical exams.
Which of the following is correct about dispel are also saying guaranteed and non-guaranteed benefits?
Guaranteed and non-guaranteed benefits can be shown as a single sum, if they are also shown separately
There are two types of level term insurance, one of which is the annual renewable term (ART). The ART ____________ and _______________.
Has no requirement for proof of insurability at renewal and a maximum age.
A reduction in force at Charlie's company has resulted in Charlie being laid off from his current position. His group life insurance plan (an annually renewable term policy) contains a provision allowing him to convert an individual policy. Which of the following is not a consideration in converting from a group to an individual plan?
He can use the cash value of his group policy to purchase paid-up insurance.
Agent Peterson completes an application for health insurance on the Adams family. Mr. Adams writes a check for the initial premium and Agent Peterson provides Mr. Adams with a conditional receipt. Mr. Adams should understand which of the following?
He has made an offer to the insurance company and no insurance is in effect until all requirements for underwriting his policy are received and the policy is approved.
The owner of the annuity has certain privileges. Which of the following is not an action that only the owner can take?
He/she can make changes during the annuity period
Molly is moving to Tennessee from another state where she was previously licensed for the same lines of authority she wishes to work under in Tennessee. She hopes to be exempt from pre licensing education and examinations. What is required besides a notice of the cancellation of her previous license?
Her prior state needs to issue a certification that states that at the time of cancellation, Molly was in good standing
Cliff bought a life policy and the agent issued him a conditional receipt. The receipt stated that Cliff was covered as of the date of the application, provided he was insurable as a standard risk. If Cliff dies before the policy is issued, what is the insurance company's responsibility?
If he was insurable, the insurer would pay the death benefit
Credit life insurance protects creditors who insure the lives of debtors. All of the following are true statements about credit life EXCEPT:
If the debtor dies, the creditor gets all of the benefits of the policy.
Jerome is explaining to his client that a fixed annuity is the most appropriate annuity because it fulfills all of the client's expectations EXCEPT:
Income benefits adjusted to keep pace with inflation are produced by this type of annuity
The clause that prevents an insurer from denying a claim, except for nonpayment of premiums, after the policy has been in force for over 2 years is called the:
Incontestability clause
Eligibility for Social Security disability benefits is determined by all of the following EXCEPT:
Individuals under age 30 must earn 10 quarters of credit within the past 5 years.
In commercial risk insurance - classification or rates can be changed or renewed either more than one year after the policy's renewal date or the expiration date without consent if the change ___________________.
Is in favor of the insured
An underwriter has received the information submitted on a prospective customer. He has determined that this person will not qualify for a standard issue policy. The underwriter may choose any of the following actions EXCEPT:
Issue the policy with a probationary period allowing the company to cancel the policy at a later date at their opinion.
If the insured opts to carry the return of the premium rider, the insurer refunds the total amount of premiums paid- into the policy-. If an insured dies within a time period specified in the policy. Which of the following statements is true about the return of premium rider?
It is an increasing term rider that matches the total premium input.
One type of annuity is a retirement income annuity. Which of the following statements is not true about a retirement income annuity?
It is an ordinary immediate annuity
Randy and Paula have an annuity that will not only provide benefits for the life of Randy, but also the life of Paula if she outlives Randy. This type of annuity is called:
Joint life and survivorship annuity
Jimmy's grandparents want to set up a life insurance program for his future. They have investigated Jimmy's parent's life program and feel they have adequate life protection for their needs. A good choice to help Jimmy in later years is:
Juvenile Life
Kevin sold insurance for an insurance company not authorized to do business in Tennessee. Who is liable for any premiums paid for, or valid claims made on, all contracts of unlawfully sold insurance?
Kevil will be personally liable
Another type of universal life policy is called the equity indexed life policy. This policy is:
Linked to something like the S&P 500
All of the following are providers of government insurance EXCEPT:
Lloyds
Field underwriting gives the agent an opportunity to meet an applicant face-to-face and help the applicant through the process of application. It is primarily useful to:
Make observations that could impact insurability
Mary is an unlicensed individual. Joe is a licensed insurance producer. All of the following are true regarding referrals Mary makes to Joe EXCEPT:
Mary will only be paid for her referral if the customer purchases an insurance product from Joe
An underwriter is judging a risk for a health insurance policy. In the order of importance, what are the issues the underwriter must consider in making his judgement?
Moral hazards, occupation and physical condition.
Participating life insurance policies pay dividends to policyholders. Which of the following is not a factor in determining the amount of the dividend?
Morbidity
Health insurance rates are determined by all of the following EXCEPT:
Mortality tables
Marge's agent has just delivered her new life policy. In the policy, the insurer promises to pay a specified sum of money when proof of death is provided to the insurer. She can expect to fins all but the ________ in the insuring clause on the face of the policy.
Name of the beneficiary
In any life insurance policy transaction, the agent must ask the applicant if the policy is replacing another policy. The applicant must sign a written statement indicating if a replacement is involved - or not. If a replacement is involved, the agent must do all of the following EXCEPT:
Notify the insurer of the policy being replaced - of any policies to be replaced
Physical condition is one of the primary factors in underwriting a health insurance policy. In addition to moral hazards the underwriter will be very concerned about what physical conditions?
Obesity
Monica has purchased life insurance on her 10-year-old son Jasper. She wants to make sure that in the event she dies or becomes disabled that the policy will remain in force. What rider will offer this protection?
Payor Rider
If a policy does not have an unconditional refund provision, when must the Buyer's Guide and Policy Summary be delivered to the applicant?
Prior to accepting the initial premium
Standard dividend options for a participating policy may be any of the following EXCEPT:
Provide guaranteed insurability
The entire contract clause is a provision that the policy and a copy of the application constitute the entire contract between the insurance company and the insured. What is the purpose of the entire contract clause?
Provides assurance that all necessary policy documents are in the policyholder's possession.
Term insurance provides protection for a specified period of time, pays a death benefit and does not accumulate cash value. It is said that term insurance provides _______________ and __________.
Pure protection and is the least expensive form of insurance
Joe offered a potential buyer shares of stock to increase the likelihood that the buyer would purchase a policy, what unfair trade practice is he guilty of?
Rebating
Jude completes an application for a health insurance policy. His statements on the application were made to the best of his knowledge and are:
Representations
Most insurance policies are not very flexible or easy to customize. Consequently, most policies allow for ______________ that provide additional benefits at additional cost.
Riders
Mia moved to a new city to take a new job. When she finally got around to transferring the funds from her new IRA she was surprised to see that she was assessed a tax of 90%. Why was this tax assessed?
She took more than 60 days to complete the transfer
Victoria has recently applied for a health policy. She has paid her first premium, but a physical exam is required. When will Victoria's policy be effective?
Since Victoria is required to take a physical exam, the policy will not be in effect until all underwriting requirements are met, including any amendments.
Certain items in an insurance contract can result in voiding the contract. Which of the following is not an issue where the contract would normally be voided?
Subrogation and representations
Mr. Adams is a key employee at the All Star Band Company (ASBC). The ASBC wants to acquire insurance to protect the organization should something happen to Mr. Adams. Which of the following riders would be used in this circumstances?
Substitute insurance rider
A policy on two people that pays benefits only after both of the insureds have died is called a:
Survivorship policy
Annuities are taxed on an exclusion ratio in which the portion of annual payment that is principal is _________ and the portion that is interest is __________.
Tax free, taxed as income
The rule of replacement applies to --.
Term life insurance
Who has the authority to enforce the insurance laws of Tennessee and impost any penalty or remedy authorized against any person who is under investigation for or charged with a violation of insurance laws or regulations?
The Commissioner
Who sets the rule that producers must follow for replacing a life insurance policy or annuity.
The Commissioner
Steven provided misleading information on his license application. Which of the following answers best fits the penalty the Commissioner might impose on Steven?
The Insurance Commissioner may refuse to issue Steven a license
An insurance agent told a member of his church who had recently experienced several personal and financial losses that he could see that she got more favorable rate on her insurance policies than her health and general circumstances would warrant. The woman had been his kindergarten teacher and was a pillar in the community's life. He wanted to help her. Which of the following is FALSE?
The agent was engaging in twisting
Underwriting a group insurance policy is different rom an individual policy in that underwriters are concerned about _______________.
The amount of turnover in the group
What is the penalty or a misstatement of age of the person insured on an individual life issuance policy?
The amount payable on the contract will be the amount that would have been due had the correct age been given.
Mr. Robinson is curious why the application for his health insurance policy is so important. His agent explains that all of the following reasons are important EXCEPT:
The application is part of the insuring clause when it is attached to the policy.
What happens if Tim has not paid his life insurance premium payment and dies during the grace period?
The beneficiaries will receive full payment minus the unpaid premium.
Partial surrenders or withdrawals can be made of the cash value of a universal life policy. All of the following are true about the withdrawal provision EXCEPT:
The beneficiary may withdrawal unlimited amounts at any time
Although it is not normally recommended that a minor be named as a beneficiary on a life policy, sometimes it is the only logical option. When the only logical beneficiary is a minor, all of the following options are available EXCEPT:
The benefits can go directly to the estate of the insured
Straight whole life insurance is an insurance policy with level contributions that lasts a lifetime. These policies (contracts) offer a cash value designed to be a reserve that would build up against the known claim- the death benefit. Which of the following is not true about straight life whole policy?
The cash value goes to the beneficiary upon the death of the insured.
Joshua brought a straight life contract knowing that when it matures - usually at age 95 or 100 - the cash value is equal to the death benefit. Before he died, Joshua borrowed the cash value and forfeited the death benefit. How were the proceeds of the policy handled when he died?
The cash value is paid back with interest, minus dividends paid.
What of the following is not a potential outcome to the benefits of at the annuity if the annuity dies before the start of the annuity payments?
The company could keep the money
Manny, Moe, and Jack are partners in an auto parts business. They have had their business valued at $600,000 by an independent firm. None of them want to be in business with their partner's family in the event that one dies prematurely. Their business is incorporated What should they do?
The company should buy $200,000 life insurance on each partner and have their attorney draft a buy/sell document.
The __________________ is the person or entity who has purchased the annuity, has right of ownership and pays the premium.
The contract owner
The suicide clause is in most every policy. All of the following statements are not true about the suicide clause EXCEPT:
The death benefit is paid if the suicide occurs more than two years after the policy inception.
For federal tax purposes, life insurance proceeds can be subject to inclusion in a deceased's estate. Which of the following is not a case where the proceeds would be included in the deceased's estate?
The deceased's wife was the beneficiary
Assets deposited into a fixed annuity are invested in:
The insurance company's general account
Margaret took out a whole life policy in 1999. In 2005 she committed suicide. What was the obligation of the insurer regarding the benefits of the policy?
The insurer would pay for full face amount of the policy
There are several different kinds of beneficiaries in a life policy. Based on the following, which of the statements is true? When John dies, the death benefit will be paid to Sherrie. If Sherrie dies before John, the benefit would go to Collin. Which of the following statements are true?
The primar beneficiary is Sherrie, and Colin is the contingent beneficiary
Life insurance premiums are calculated based on three factors. Which of the following is a factor used to calculate premiums?
The rate at which specific populations die
Which of the following is not a nonforfeiture provision of an annuity contract - if the contract owner decides to surrender the annuity and stop making payments - before the annuity payout phase begins?
The taxes on a lump sum payment can be waived if the annuitant is over 55.
When soliciting insurance, agents must abide by the rules and regulations pertaining how solicitations are conducted. Which of the following is not a requirement of an advertisement to sell insurance?
The trade name of the insurer must be included in the advertisement
The following groups of people fall under a rule that puts them in a specific set of special circumstances. These people are: persons holding a CLU designation for a life line of authority, persons holding a CIC designation for life and health lines of authority, persons holding a Certified Employee Benefit Specialists, and persons holding a Registered Health Underwriter. What special circumstance applies to all these groups of people?
They are exempt from the pre-licensing education requirements
Usually the policy owner and the insured are the same person. Claire is 25 years old. When Claire's father took out a policy on her life, he was the policy owner and claire was the insured. This is an example of:
Third party ownership
What is the purpose of the Fair Credit Reporting Act?
To regulate the way credit information is collected and used.
What is an equivalent level annual dividend?
Total dividends earned for 10 or 20 years, respectively
Insurers must maintain complete records of all the complaints it receives since the date of its last examination. Which of the following lists describes a complete record of a complaint?
Total number of complaints, classification by line of insurance, nature of each complaint, the disposition of each complaint, the time it took to process each complaint.
Christina charges one person rates from the same policy more than another person of the same class and equal expectation of life. What unfair trade practice is she guilty of?
Unfair discrimination
Section 1035 of the Internal Revenue code provides for limiting tax liability on certain exchanges. All of the following exchanges would qualify under Section 1035 EXCEPT:
Vacant land for another piece of vacant land
It is an unfair utilization of proprietary information if any information in a policy application is used for the purpose of soliciting any form of insurance EXCEPT in which of the following cases?
When permission is granted by the Commissioner
When are statements made by the insured considered part of the policy?
When they are in the application are attached to the policy
Mr. Andrews is considering starting a traditional IRA? Which of the following statements is not true about traditional IRA's?
Withdrawals made prior to age 59 1/2 are assessed a 20% penalty
Because she gets paid on the 15th, Julia routinely pays her insurance premium (due on the 5th) late. Her policy was cancelled for nonpayment of premium. Does Julia have a legal leg to stand on to contest the decision by the insurer to cancel her policy?
Yes - because the insurer accepted late payments previously.
When Mr. Baker reached age 65, he started to receive Social Security benefits. He continued to work at his regular job. Did he have tax liability on his Social Security benefit payments?
Yes, if his income is greater than $25,000
Any insurance presentation that compares two or more life insurance policies MUST-
account for inflation
All of the following are considered unfair trade practices EXCEPT:
offering policyholders bounses out of surplus accumulated from nonparticipating insurance. Answer D
Within how many days will an applicant be notified that their application for a license has been denied by the Commissioner?
30 days
Gracie's premium was due on the 5th of July. Because of all of the holiday hustle and bustle she forgot to make her payment. How long will her policy remain in force?
31 days
A business may be the beneficiary on any of the following policies EXCEPT:
A group insurance policy of one of the employees
Life policies have very few restrictions on who an owner can name as a beneficiary on their life policy. If Naomi wishes to change the beneficiary on her policy and does not need the consent of the beneficiary - the beneficiary is most likely:
A revocable beneficiary
An application for health insurance contains three parts. What is contained on Part III?
Agent's report
Life insurance can have many purposes. Which of the following are common personal uses for life insurance?
All of the above {Estate planning, Cash accumulation, Protection of survivors}
What term can an insurance agent NOT use to refer to themselves?
All of the above {Financial planner, Financial consultant, Investment advisor}
Which of the following is a replacement transaction?
All of the above {Life insurance is amended to effect in reduction in benefits, Life insurance reissued with a reduction in cash value, Life insurance converted to reduced paid-up insurance}
A policyholder has certain rights as the owner of a life insurance policy. Which of the following is not an ownership right?
Changing the irrevocable beneficiary
The person that receives the proceeds of a life insurance policy if the primary beneficiary predeceases the insured is called the:
Contingent beneficiary
Karl has become permanently disabled. Under his policy, the insurer is going to make periodic income payments for Karl. What kind of rider or provision does Karl have that results in this benefit?
Disability Income Benefit
Life insurance policies that pay dividends to policyholders are called 'participating policies'. All of the following are true statements about dividends EXCEPT:
Dividends are taxable
Karen printed and handed out brochures that contain misleading advertisements, what unfair trade practice is she guilty of?
False advertising
An insurance company issued a binding receipt to an applicant. How long does the coverage last if the applicant is rejected?
For the period of time specified in the receipt.
What is the title of the policy summary?
STATEMENT OF POLICY COST AND BENEFIT INFORMATION
The rule of replacement applies to-
Term life insurance
What constitutes an entire life insurance contract?
The policy only
Which of the following statements is not true about when the annuity period begins?
There is no variance once the units are converted
How long does an insurance producer have past the required renewal timeframe before they will need to pass another examination?
Within 12 months
A producer sat down with a prospective client to discuss a long-term care policy. He used a computer program to outline and emphasize his remarks. The visual presentation contained the principal benefits of the policy he was trying to sell. Although he mentioned that it also had "the usual" conditions, he did not include those in his visual presentation or specify what they were. The producer was:
engaging in misrepresentation
Usually the applicant, the insured and the owner of the policy are all the same person. As the owner of a life policy, the insured can expect which of the following?
All of the above { To receive dividends when paid, To choose the premium mode, To designate the beneficiary}
Which of the following could result in an insurance contract being voided?
All of the above {Concealment, Fraud, Recission}
Qualified retirement plans must be for the exclusive benefit of employees and their beneficiaries. They provide tax benefits, and must be approved by the IRS. All of the following statements are true about qualified plans EXCEPT:
The plan must always favor valuable employees
Universal life insurance is sometimes called the policy that allows the policyholder to 'buy term and invest the difference'. Which of the following is not true about universal life?
The policyholder cannot skip premium payments
What is the maximum time that life insurance cost indexes must be shown in the policy summary?
The premium paying period
An insurance producer is an individual who is required to be licensed to sell, solicit, or negotiate insurance whether or not the individual is in which of the following situations?
The producer will need a license whether or not the producer is in any of the above situations.
Which of the following answers best describes the penalty the Commissioner will impose for mishandling any money that an insurance producer receives for soliciting, negotiating, or selling insurance?
The producers license may be denied, suspended or revoked.
Which of the following is a nonforfeiture provision of an annuity contract - if the contract owner decides to surrender the annuity and stop making payments - before the annuity payout phase begins?
The taxes on a lump sum payment can be waived if the annuitant is over 65.
When soliciting insurance, agents and insurers must abide by the rules and regulations pertaining how solicitations are conducted. Which of the following is not a requirement of an advertisement
The trade name of the insurer must be included in the advertisement
Maggie and Jim have two young children. They know that the designation of minor beneficiaries on their life policies is not a good idea. Which of the following is not an option for handling this potential problem?
They could set up a tertiary benefit to receive the proceeds.
Group life and individual life have similarities. What is a major difference between group and life policies regarding taxation?
Premiums paid by employers are tax deductible
All of the following are commonly used when investigating the insurability of an applicant EXCEPT:
Talking to the neighborhood watch
Sylvia did not pay her initial premium when the agent took her application. Because she paid the premium when he delivered her policy, the agent is required to obtain ________________ in order for the policy to be in effect.
A statement of good health
A policy is not considered in effect until it has been delivered to the insured. Which of the following is an effective and legal way to deliver a policy?
All of the above {Personal delivery by an agent, Mailing the policy to the policy owner, Giving the police to an agent of the policyholder.}
Failure to file or certify the certain information regarding the endorsement or sale of long-term care insurance is considered unfair trade practice. All of the following must be filed with the insurance department EXCEPT:
Amount of premiums
Which of the following statements best describes the person responsible for developing rules to protect a specific group of people from unfair trade practices?
The Commissioner adopts rules to protect service members of the United States armed forces
All of the following are duties of the Commissioner EXCEPT:
The Commissioner may put a person in jail for violating insurance regulations
The policy summary can refer to what other document for a detailed explanation of the life insurance cost indexes?
The Life Insurance Buyer's Guide
A company is required to disclose all of the following information to the prospective clients EXCEPT:
The agent's compensation
What is the penalty for a misstatement of the age of the person insured on an individual life insurance policy?
The amount payable on the contract will be the amount that would have been due had the correct age been given.
All of the following are requirements of an application for a license to be approved by the Commissioner EXCEPT:
The applicant is at least 21 years of age
When presented with life insurance options, Jonathan opted for a variable life policy. Which of the following is a major difference between a variable life policy and a universal life policy?
All of the above {The cash values of a variable life policy are not guaranteed; A variable life contract is regulated as a security; The insurer is required to establish a separate account for variable procedures}
The return of premium rider does not actually return premiums, but in fact pays an additional amount of death. The return of premium rider is actually ________________.
Increasing term insurance
Several factors are involved in the determination of premiums for life insurance. All of the following are major factors EXCEPT:
Marital status
Sarah made fraudulent statements relative to an application for a policy for the purpose of obtaining a commission from an individual. What unfair business practice is she guilty of?
Misrepresentation
Moral hazards are a concern for an underwriter. Which of the following is most important while underwriting a health insurance policy?
Moral hazards, occupation, and physical condition
Who must sign a receipt for the payment of a life insurance policy premium?
One or more officers of the company
Each of the following is non-forfeiture options EXCEPT:
Paid up additions
A conditional contract depends on which of the following circumstances?
Payments of benefits is predicated on a specific event or events occurring as outlined in the contract provisions.
Variable whole life is a policy that offers higher interest rates which help to protect the policy owner against inflation. Which of the following is not true about a variable whole life policy?
Policies are not regulated by the SEC
Underwriting is the name of the process used by insurers to rate risk. Once the risk has been rated it is classified. Which of the following is the classification for an individual that would pose the least amount of risk to the insurer?
Preferred
In the underwriting of insurance policies, some amount of discrimination is:
Present in many cases, because of differing levels of risk.
Term insurance provides protection for a specified period of time, pays a death benefit and does not accumulate cash value. It is said that term insurance provides _____________ and ____________.
Pure protection and is the least expensive form of insurance
An annuity will accumulate tax deferred as long as the account value remains inside of the annuity. Julia has an individual non-qualifies annuity with a substantial value. At are 55 she wants to remodel her home before retirement. What should Julia consider before she withdraws money from her annuity?
She should consult her tax advisor, since money withdrawn prior to age 59 1/2 is subject to tax and penalty.
Jack is retiring soon. He has been depositing money in a non-qualified deferred annuity for a long period of time. He is concerned about his tax situation during retirement, and he wants to understand how the income from his annuity will be taxed. Which of the following statements concerning the payment from a non-qualified annuity is correct?
Since there is a non-qualified plan, only a portion of the payment will be taxable.
In order to categorize the favorability of a risk, underwriters have a classification system. Which of the following is not a common classification used for risk?
Special
Federal law subjects all permanent life policies to a test to determine if they are in fact modified endowment contracts (MECs) as opposed to regular life insurance. All of the following serve to discourse MECs as an investment vehicle EXCEPT:
Subsequent policies can be exchanged without the MEC classifications
A policy that only provides death protection if the insured dies within a time specified in the policy is called:
Term insurance
Who has the authority to enforce the insurance laws of Tennessee and impose any penalty or remedy authorized against any person who is under investigation for or charged with a violation of insurance laws or regulations?
The Commissioner
A fully guaranteed contract, backed by the insurer's general account is a fixed annuity. A fixed annuity guarantees all of the following EXCEPT:
The death benefit amount
Some policies contain a waiver of premium rider. With this rider the policy owner can waive premium payments during a disability and keep the policy in force. Which of the following is a true statement about the waiver of premium rider?
The disability must be permanent and total.
How long does a nonresident insurance producer who moves from one state or a resident insurance producer who moves from Tennessee to another state have to file a change of address?
Within 30 days of the change of legal residence.
The common disaster provision states when both the insured and the beneficiary die in the same accident, it is presumed that the insured survived the beneficiary. Most policies specify that the death of the primary beneficiary must occur:
Within 30-90 days of the accident
