life insurance
Generally, what is the tax consequence of a withdrawal prior to age 59 ½ from an IRA?
10% penalty
Generally, what is the tax consequence of a withdrawal prior to age 59 ½ from IRA
10% penalty.
A Whole Life policy is replaced with an annuity without a tax penalty. This is referred to
1035 Exchange
If a producer has completed 21 hours of continuing education, but not ethics credits, how many ethics credits must be completed to keep the license active.
3
An insurer, in general business practice, fails to promptly provide a reasonable explanation for the..
A fraudulent insurance act
What must exist in order for an insurance policy to be a binding contract?
A legal purpose
If a premium is NOT submitted with a life insurance application, the producer must have the applicant sign which of the following when delivering a policy?
A statement of good health
An insurance producer shall NOT act as an agent of an insurer until that producer has...
An appointed agent of that insurer
Which of the following statements is True regarding a 1035 exchange?
An exchange for another policy or annuity generally avoids any taxes
Once a life policy has been in effect for 2 years, what clause protects a policyowner from a misstatement
An incontestable clause
When an individual becomes a customer, the licenses shall provide a notice to the customers de.. notice need to be provided?
Annually
In reference to life insurance in contract law, a person most likely will have an insurable interest in insuring a person's life if?
Any type of business relationship exists between the insured party and the beneficiary.
Nonforfeiture values are associated with which of the following?
Cash Values
The dividend option where the insurer issues the policyowner a check for the dividend amount is called a
Cash dividend option
Under the One-Year Term dividend option, the dividend is used to buy term coverage for a year, w...
Current cash value of the policy
The basic reason for purchasing life insurance is to provide
Death benefits
A producer who knowingly solicits new insurance risks by an insolvent insurer is guilty of?
Defamation
All of the following would trigger an accelerated death benefit EXCEPT
Diagnosed with a terminal illness
Which rider pays a monthly amount to the policyowner in the event of total and permanent disabilities?
Disability income rider
Who is the beneficiary of a key person insurance policy?
Employee
This type of policy where 80% to 90% of the premium is invested in traditional fixed income securities stock index is
Equity index whole life
Annuity products linked to a market-related index are called
Equity-indexed annuity
A producer who knowingly submits a false statement in support a claim may be found guilty of?
Fraud
A producer who knowingly submits a false statement in support of a claim may be found guilty of
Fraud
An individual who knowingly submits a false statement in support of claim may be found guilty of
Fraud
A fixed annuity has a rate
Guarantee
Which of the following retirement plans will allow for a nonworking spouse to set up a separate account and make contributions based on the working spouse's income?
IRA
Bettie has a $200,000 whole life policy with a $50,000 cash value. She wishes to borrow $30,000 for the purchase of a new...
If the loan is not repaid, the net death benefit will be reduced
Once a life policy has been in effect for 2 year, what clause protects a policyowner from misrepresentation caused by an unintentional mistake.
Incontestable Clause
Which is the simplest type of life insurance plan that provides protection for a specified time period?
Level term life insurance
All of the following are considered a risk except the insured's
Local competition
A life insurance rider which reimburses incurred in a convalescent or nursing home facility is?
Long term care rider
Term life insurance is more appropriate than whole life insurance when the
Maximum protection is needed at lowest cost
To receive proceeds from a death benefits, a minor
Must have an appointed guardian
An insurer owned by its policyholders and pays dividends is considered a
Mutual Company
Which of the following elements of Insurable risks allow the Insurance Company to exclude nuc..?
Not catastrophic
What best describes pure risk?
Only chance of loss
Generally, if an application is NOT prepaid, the effective date of coverage begins on the date the
Producer delivers the policy and collects a premium
Which of the following is not true about converting a group policy to an individual policy?
Proof of insurability will be required.
Which of the following is true regarding the annuitant?
The annuitant is the person who is paying the premiums
Who is allowed to make changes to a life insurance contract?
The commissioner of the insurance
At the time of an insured's death, a per capita distribution of a policy proceeds are paid to
The named living primary beneficiaries
Roger's life insurance representative advised he buy a whole life policy for all of the following except
The policy premiums will diminish overtime
If a policyowner surrenders a policy for the cash value, when is a tax liability incurred?
The surrender value exceeds all premiums paid
What effect will benefit payments from a long-term care rider on a life insurance policy have on the face amount of the death benefit?
They will be reduced
For what purpose is a life insurance application backdated?
To Reduce The Premium
The Medical Information Bureau (MIB) is an organization which
is sponsored by physicians that maintain a database available to insurance companies
An insurance producer shall not act as an agent of an insurer until that producer has become?
An appointed agent of that insurer.
All of the following are subject to false advertising regulations except
Circulars
Which of the following is NOT an example of a producer's duties?
Collecting premiums
Which type of annuity guarantees a level benefit payment?
Fixed
A beneficiary has chosen to receive income from a life insurance policy for the next 10 years. After 10 years, the entire proceeds will have been paid out. The beneficiary has selected which type of
Fixed Period
An unlicensed individual, who is employed by an agency, may perform all the following activities EXCEPT:
Give advice regarding a specified product offered by an insurer
The interest accumulated on life insurance proceeds are paid out to the
Insurance company
Which of the following statements BEST describes a single premium cash value policy?
It requires only one payment to make the policy paid up
What must exist in order for an insurance policy to be binding contract?
Legal Purpose
An employer may purchase life insurance on a key employee because of
Reinsurance
The settlement option that pays the beneficiary the deal benefit proceeds in single installment in--
A lump sum payment
Which of the following individuals is required to be licensed as an insurance counselor in the state of Michigan?
A person providing insurance advice to a person or business for a fee
Upon the death of an insured individual, what does life insurance guarantee to deliver to be beneficiary?
A specified sum of money
If the beneficiary has the insurer retain to the benefits to gain interest, how is the interest calculated --?
Annual paid in premiums
What is a producer's apparent authority?
Authority required to execute express authority
Which term describes naming a contingent beneficiary as "all my children"?
Class designation
Which of the following elements would be absent for an applicant under the influence of drugs and alcohol?
Competent parties
What is protected by the Graham Leach Billy act chapter 5 of the Michigan insurance code?
Customer's financial information
Which of the following constitutes unfair discrimination in life insurance?
Discrimination between individuals of the same class and equal life expectancy
When recommending a life insurance policy, one would concede all of the following EXCEPT
Existing Insurance Program
Which of the following is NOT a settlement option for life policies?
Extended term
Which rider includes coverage for the insured's spouse and children?
Family
When using the needs approach to determine the amount of life and health insurance needed, it is
Family's financial objective in the event of death or disability of the income earner
Term life insurance offers pure protection
For a specified period of time
A deliberate lie by an insured to the insured to the insurer to obtain a lower premium is an example of
Fraud
A producer that presents a claim for payment which contains false information is guilty of
Fraud
Which type of authority is given by an insurer to a producer but NOT formally communicated?
Implied
The unfair trade practice of using threat or force to restrict fair trade in the transaction of insurance is called
Intimidation
Which of the following elements of a contract would be absent for an applicant under the influence of alcohol at the time of application
Legal purpose
Which type of life insurance policy is characterized by premiums that are fully paid up within a stated period, after which no further premiums are REQUIRED:
Limited payment insurance
Which action must be taken by a producer when premiums are calculated?
Maintain premium funds in interest-bearing accounts
At the time of an insured's death, a per capita distribution of policy proceeds is/are paid to
Named living primary beneficiaries.
Under the Michigan Insurance Code, what must a licensee do prior to operating under an assumed -
Notify the Commissioner prior to use
What is an action the director may take when a consumer complains they suffered financial harm as a result of an insurance licensee's action?
Order the licensee to make restitution within 30 days or be subject to an administrative hearing.
What is an action the Director may take when a consumer complains they suffered financial harm a—
Order the licensee to make restitution within 30 days or be subjected to an administrative -
Liquidity in a cash value life insurance policy is demonstrated by
Permitting the policy owner to request a loan against the cash value of the policy
Which nonforfeiture option allows the policyowner to purchase less coverage for life?
Reduced Paid-Up Insurance
Term life insurance differs from permanent life insurance in that most often, term life insurance.
Remains in force for a specific period of time.
A producer has a responsibility to do which of the following?
Represent the insured
Purchasing insurance is an example of which of the following methods of handling risk?
Retention
Which of the following is the form of risk if an entity chooses to set aside funds to be self-insuring?
Retention
The principal use of an annuity is to provide income for.
Retirement
If the insured dies within a specific field time of a policy issuance which of the following refunds the purchase payments?
Return of premium rider
Which of the following methods could eliminate the risk of having a sky diving accident?
Risk avoidance
Which of the following is a solicitation by a producer?
Sales presentation
Which of the following characteristics applies to a modified life policy?
The face amount of the policy will automatically increase after the policy is in force for 5 years
Premiums from a fixed annuity are invested in
The general account
If an annuitant dies during the accumulation period, his or her beneficiary will receive
The greater of the accumulated cash value or the total premiums paid.
Each life insurance policy offers a 30-day grace period. This prevents the policy being can of the following is TRUE, if an insured dies during the 30-day grace period, assuming the policy is in place
The late premium will be subtracted from the benefit amount
Each life insurance policy offers a 30-day grace period. This prevents the policy from being cancelled if payment is received, but within 30- days of the premium due date. Which of the following is true, if an insured dies during the 30-day grace period, assuming the policy is otherwise in good standing?
The late premium will be subtracted from the benefit amount
If an annuitant died during the accumulation period, his or her beneficiary will receive
The lesser of the accumulated cash value of the total premiums paid
Which of the following represents a reduced paid-up nonforfeiture option?
The new policy will have a decreasing face amount
What is prohibited by the Graham Leach Billy act and chapter 5 of the Michigan insurance code?
Third-party claimants right
Purchasing insurance is an example of which of the following methods of handling risk?
Transference
For advertising to be legal in the insurance business it must be
Truthful and accurate
Which activity does NOT require an insurance producer's licenses?
Underwriting
When individuals purchase life insurance to enable heirs to pay estate taxes, this is called
Estate Conservation
When individuals purchase life insurance to enable heirs to pay estate taxes this is called
Estate conservation
The standard provision of group life insurance policies includes all of the following except
Evidence of insurability is never required for enrollment
The taxable portion of a monthly income benefit paid during the annuity phase from a nonqualified annuity is calculated using the
Exclusion ratio
What is the term used to describe the taxable portion of non-qualified annuitization payments?
Exclusion ratio
The premium mode defines the
Frequency of the premium payment
Which rider would allow additional insurance to be purchased at specific dates or events, without additional underwriting?
Guaranteed insurability
What is it called when an officer of a company gives an agent authority either orally or in writing?
Implied
Which approach considers the future needs of the survivors in determining amounts of life insurance
Needs approach
Which of the following is considered an unfair practice for a life insurance application?
Refusing to insure a person based solely on national origin
Indemnify is often referred to as
Reimbursement
Which rider allows the husband or wife of the insured to be added to the primary insured's policy?
Spouse term rider.
Insurance applicants with an average life expectancy who represents the same risk classification as -
Standard
Which form of Insurer has shareholders?
Stock company
In addition to the actual policy, an entire contract includes which of the following?
The application
Specific statements made on an application that the insured guarantees to be TRUE are
Warranties
A policy may contain provisions excluding or restricting coverage as specified in the event of death under all of the following except.
Suicide
What type of insurance is an additional rider?
Term life
Which type of insurer is sometimes referred to as a non-participating company?
Stock Insurer
In which of the following policies is the insured covered to age 100 and the owner pays a level premium throughout the duration of the policy:
Straight whole life policy
Which kind of retirement plan can a 1500 employee for a corporation establish?
401k
In the Michigan Insurance Code, Chapter 45, Insurance Fraud defines financial loss as all these EXCEPT?
Additional premiums
Interest earned on a Traditional IRA is taxed
At distribution
Which of the following is a whole life policy option that allows for a delinquent premium to be paid automatically by a new policy loan?
Automatic premium loan option
Two business partners own life insurance on each other. If one partner dies, which of the following contracts allows the surviving partner to use the death benefit to purchase the deceased
Buy-sell Agreement
Two business partners own life insurance on each other. If one partner dies, which of the following...deceases owner's interest?
Buy-sell agreement
All of the following are subject to false advertising regulations EXCEPT
Circulars
Which type of insurer is sometimes referred to as a participating company?
Mutual Insurer
When an insurer appointment with a producer is terminated, the party that MUST notify the producer of the termination to the:
National Association of Insurance Commissioners (NAIC)
Which universal life policy has investment choices?
Variable
A deliberate lie by insured to the insurer to obtain a lower premium is an example of.
Aleatory
Prior to annuitization, what is the nonforfeiture value of annuity?
All premiums paid minus any withdrawals and surrender changes
All of the following riders can increase the death benefit amount EXCEPT?
Waiver of premium
Specific statements made on an application that the insured guarantees to be true are.
Warranties
Human life value approach measure which of the following?
Total lifetime earnings.