LIFE INSHO TEST FO REALLL

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount?

100

At the time of application for an annuity, a producer did not provide a buyer's guide and disclosure statements to the contract owner. In this situation, the contract owner is entitled to a free-look period of at least how many days?

15 days

The Division of Insurance has requested information regarding an insurer's underwriting policies via e-mail. How many days does the insurer have to respond to this request?

20 days

All insurers that terminate employment with a producer are required to notify the Commissioner within how many days following the effective date of the termination?

30 days

The minimum number of credits required for partially insured status for Social Security disability benefits is

6 credits.

Which of the following is NOT considered to be a legal example of an insurable interest in Colorado?

A STOLI agreement

If the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?

A full death benefit

Who is a third-party owner?

A policyowner who is not the insured

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be

Adjusted to the insured's age at the time of renewal.

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

Aleatory

In insurance, an offer is usually made when

An applicant submits an application to the insurer.

Who can make a fully deductible contribution to a traditional IRA?

An individual not covered by an employer-sponsored plan who has earned income

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

An insured is 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

The death protection component of Universal Life Insurance is always

Annually Renewable Term

When group life insurance policies are issued in this state by a company not organized under the laws of Colorado, they may contain which of the following provisions?

Any provision required by the law of the state under which the company is organized.

All of the following are duties and responsibilities of producers at the time of application EXCEPT

Change any incorrect statement on the application by personally initialing next to the corrected statement.

The mixing of premiums belonging to the insurer or the insured with the producer's personal funds not related to the business is called

Commingling

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

Common Disaster

The term "employer" with respects to group insurance policy coverage includes all of the following EXCEPT

Condominium owners in a sub-division.

Representations are written or oral statements made by the applicant that are

Considered true to the best of the applicant's knowledge.

A key person insurance policy can pay for which of the following?

Costs of training a replacement

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated.

The term "fixed" in a fixed annuity refers to all of the following EXCEPT

Death benefit

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation.

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.

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

Fixed period

Notwithstanding any other provision of law, each insurer admitted to transact the business of life insurance in this state must pay interest on the death benefits

From the date of death.

What provision in an insurance policy extends coverage beyond the premium due date?

Grace period

Which of the following is a producer's fiduciary duty?

Handling premiums

To be licensed as a resident insurance producer in Colorado, an applicant must meet all of the following requirements EXCEPT

Have an Associate's Degree in business and finance.

In group life policies in this state, when may the insurer use suicide as a cause of death as a defense against paying a claim?

If the suicide occurs during the first year of coverage

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

Which of the following is NOT a penalty for violating provisions of the Insurance Code?

Imprisonment

Any request to modify an insurance license must be submitted to the Commissioner

In writing by the licensed producer.

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

An individual with a legal interest in the continued life of the insured defines the principle known as

Insurable interest.

All of the following are Nonforfeiture options EXCEPT

Interest only

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

Which of the following best describes annually renewable term insurance?

It is level term insurance.

Which of the following is true of a children's rider added to an insured's permanent life insurance policy?

It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age.

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children are added to the policy.

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?

Joint Life Policy

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

Joint and survivor.

Which two terms are associated directly with the premium?

Level or flexible

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

Limited pay whole life

Which of the following riders added to a life insurance policy can pay part of the death benefit to the insured to cover expenses incurred in a nursing or convalescent home?

Long-term care

What is the other term for the cash payment settlement option?

Lump sum

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

Making comparisons between different policies

What is the term for how frequently a policyowner is required to pay the policy premium?

Mode

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 option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

Paid-up option

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

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

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 riders would NOT cause the Death Benefit to increase?

Payor Benefit Rider

What describes the specific information about a policy?

Policy summary

Who can request changes in premium payments, face value, loans, and policy plans?

Policyowner

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a

Premium receipt.

Which of the following is a specific service for which an insurance producer is NOT allowed to charge a fee to the applicant or policyholder?

Qualified retirement plan design for which the producer receives a commission from the insurer

An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?

Reduction of Premium

Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must

Respond to the consumer's complaint.

The Ownership provision entitles the policyowner to do all of the following EXCEPT

Set premium rates.

Which of the following is a risk classification used by underwriters for life insurance?

Standard

A man desperately wants to become an insurance agent, but cannot pass the Colorado exam. His cousin offers to take the test under the man's name and passes. Three months after the license is issue that gets discovered. What will the Commissioner's action be?

The Commissioner can revoke the license.

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

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

The Medical Information Bureau

If a life insurance policy has an irrevocable beneficiary designation,

The beneficiary can only be changed with written permission of the beneficiary.

An applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day, which of the following is TRUE?

The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy.

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.

If a company has transacted insurance in this state without a Certificate of Authority, which of the following is true of its obligations for the policies sold?

The company can still be liable for its policies in any court of this state.

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to

The contingent beneficiary.

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

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?

The death benefit will be smaller.

Which of the following describes the tax advantage of a qualified retirement plan?

The earnings in the plan accumulate tax deferred.

Who is responsible for covering the expenses associated with the examination of domestic insurers?

The examined insurer

A friend helped an insurance producer sell an insurance policy. The producer can share the commission with the friend if

The friend is licensed in the same line of insurance.

Large group life insurance underwriting takes all of the following into consideration EXCEPT

The health of each individual in the group.

Who bears all of the investment risk in a fixed annuity?

The insurance company

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.

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

The insurer will pay the full death benefit from the group policy to the beneficiary.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy.

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

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

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education.

Which of the following is true regarding taxation of accelerated benefits under a life insurance policy?

They are tax free to terminally ill insured.

What is the purpose of settlement options?

They determine how death proceeds will be paid.

If the Commissioner believes a producer has committed a violation of an insurance law, the Commissioner will hold a hearing. What is the purpose of the hearing?

To allow the aggrieved party to be heard

What is the purpose of a fixed-period settlement option?

To provide a guaranteed income for a certain amount of time

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

Universal life

Which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value?

Variable universal life

What is the name of the insured who enters into a viatical settlement?

Viator

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium.

If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about

Whether an insurable interest exists between the individuals.

Which of the following is an example of a limited-pay life policy?

Which of the following is an example of a limited-pay life policy?