Life Exam

In Insurance an offer is usually made when? a.) An applicant submits an application to the insurer B.) The insurer approves the application and receives the initial premium C.) The agent hands the policy to the policyholder d.) An agent explains a policy to a potential applicant

A.) An applicant submits an application to the insurer

The hearing for a cease and desists order must occur within how many days of the order date? a.) 15 b.) 30 c.) 45 d.) 60

a) 15

How often must the Superintendent examine financial affairs of domestic insurers? a.) 3 years b.) 5 years c.) 10 years d.) 2 years

a.) 3 years

Which of the following will NOT be an appropriated use of a deferred annuity? a.) Creating an estate b.) Accumulating retirement funds c.) Accumulating funds in an IRA d.) Funding a child's college education

a.) Creating an estate

The automatic premium loan provision is activated at the end of the a.) Grace Period b.) Free-look period c.) Elimination Period d.) Policy Period

a.) Grace Period

Units with the same or similar exposure to loss are referred to as? a.) Homogeneous b.) Catastrophic loss exposure c.) Law of large numbers d.) Insurable Risks

a.) Homgeneous

Which of the following allows the insurer to relieve a minor insured from a premium payments if the minor's parents have died or become disabled? a.) Payor Benefit b.) Jumping Juvenile c.) Juvenile Premium Provision d.) Wavier of Premium

a.) Payor Benefit

Which of the following is a characteristic of a Reciprocal Insurance Exchange? a.) The chief administrator of the insurer is called an "attorney-in-fact" b.) Normally write all lines of insurance c.) Stock holders share in any profits d.) Issues non assessable policies

a.) The chief administrator of the insurer is called an "attorney-in-fact".

Who must approve viatical settlements? a.) The Superintendent b.) An actuary for the insurer c.) The applicant d.) The Governor

a.) The superintendent

Which of the following is true about warranties? a.) They are guaranteed to be true b.) If they aren't true, the insurer must file with court to void the policy c.) They are true to the best of the agent's knowledge d.) They are true to the best of the applicant's knowledge.

a.) They are guaranteed to be true.

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called a.) Wavier of premium b.) Guaranteed insurability c.) Wavier of cost of insurance d.) Payor benefit

a.) Waiver of Premium

What is the waiting period for rate filing before each rate may become effective? a.) 14 Days b.) 30 Days c.) 45 Days d.) 90 Days

b.) 30 Days

An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay? a.) 15% for early withdrawal b.) 50% tax on the amount not distributed as required c.) no penalties, since the owner is older than 59 1/2 d.) 10% for early withdrawal

b.) 50% tax on the amount not distributed as required

An insured receives an annual life insurance dividend check. What term best describes this arrangement? a.) Accumulation at Interest b.) Cash Option c.) Reduction of Premium d.) Annual Dividend Provision

b.) Cash Option

Which of the following statements about the reinstatement provision is true? a.) It guarantees the reinstatement of a policy that has been surrendered for cash b.) It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated c.) It permits reinstatement within 10 years after a policy has lapsed. d.) It provides for reinstatement of a policy regardless of the insured's health

b.) It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated

If the annuitant dies during the accumulation period, who will receive the annuity benefits? a.) The annuitants estate b.) The Beneficiary c.) The annuity owner d.) The insurance company

b.) The beneficary

All of the following are characteristics of a group life insurance plan EXCEPT a.) The cost of the plan is determined by the average age of the group b.) There is a requirement to prove insurability on the part of the participants c.) The participants receive a Certificate of Insurance as their proof of Insurance d.) A minimum number of participants is required in order to underwrite the plan

b.) There is a requirement to prove insurability on the part of the participants

Are insurance company underwriters allowed to discriminate? a.) Yes, but only for gender b.) Yes, but not unfairly c.) No, higher risks pay higher premiums d.) No, discrimination is an unfair practice

b.) Yes, but not unfairly

What is the penalty for IRA distributions that are below the required minimum for the year? a.) 10% b.) 25% c.) 50% d.) 60%

c.) 50%

All of the following are regulated areas of the insurance industry EXCEPT a.) Trade practices b.) Investments c.) Commissions d.) Agents

c.) Commissions

The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? a.) The death benefit can be increased only when the policy has developed a cash value b.) The death benefit can be increased only by exchanging the existing policy for a new one. c.) The death benefit can be increased by providing evidence of insurability d.) The death benefit cannot be increased.

c.) The death benefit can be increased by providing evidence of insurability

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen? a.) The insurer will not permit the policyowner to take out any more loans. b.) The policy will be reduced to an extended term option. c.) The policy will terminate when the loan amount with interest equals or exceeds the cash value d.) The insurer will increase the interest rate on the loan and charge a penalty

c.) The policy will terminate when the loan amount with interest equals or exceeds cash value

What must happen when an individual policy or annuity has been personally delivered to the policyowner? a.) The producer must go over the policyowner b.) The notary public must witness the exchange c.) The policyowner must sign a delivery receipt d.) The policyowner must pay the annual premium in full

c.) The policyowner must sign a delivery receipt

Which of the following statements regarding HIV testing for life insurance purposes is NOT true? a.) Positive test results will be forwarded to the state's Department of Health if a physician is not selected by the applicant. b.) The testing practices must meet the criteria of the U.S. Department of Health and Human Services c.) HIV testing is regulated at the state level d.) Insurers are barred from requesting HIV testing.

d. Insurers are barred from requesting HIV testing

Agents who change their state of residence must notify the Superintendent within how many days of any change in address? a.) 10 b.) 15 c.) 20 d.) 30

d.) 30

Under which of the following circumstances would an insurer pay accelerated benefits? a.) A couple is nearing retirement and needs a steady stream of income b.) An insured is looking for a way to put her daughter through college c.) A couple wants to build a house and would like to make a larger down payment d.) An insured is diagnosed with cancer and needs help paying for medical treatment

d.) An insured is diagnosed with cancer and needs help paying for medical treatment

When an annuity is written, whose life expectancy is taken into account? a.) Beneficiary b.) Life expectancy is not a factor when writing an annuity c.) Owner d.) Annuitant

d.) Annuitant

Which of the following types of agent authority is also called "perceived authority"? a.) Express b.) Implied c.) Fiduciary d.) Apparent

d.) Apparent

Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be? a.) Installments for a fixed amount b.) Installment refund c.) Cash refund d.) Installments for a fixed period

d.) Installments for a fixed period

Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives? a.) Inspection Report b.) Agent's Report c.) General Information d.) Medical Information

d.) Medical information

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as? a.) Twisting b.) Controlled business c.) Coercion d.) Rebating

d.) Rebating

Traditional IRA contributions are a.) deducted based on the income level. b.) Never tax deductible c.) Partially tax deductible depending on the income level d.) Tax Deductible

d.) Tax Deductible

What is the advantage of reinstating a policy instead of applying for a new one? a.) Proof of insurability is not required b.) the face amount can be increased c.) The cash values have gained interest while the policy was lapsed d.) The original age is used for premium determination

d.) The original age is used for premium determination

All of the following are requirements for life insurance illustrations EXCEPT a.) They may only be used as approved b.) They must identify non-guaranteed values c.) They must differentiate between guaranteed and projected amounts d.) They must be part of the contract

d.) They must be a part of the contract