Life insurance exam

53. After the initial privacy policies and practices notice has been provided to a customer, the licensee must provide ongoing notices every

12 months

33. A licensee who is required to take continuing education must complete a minimum of how many hours in ethics coursework?'

3

3. 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?

401k

21. What is protected by the Gramm-Leach-Bliley Act and Chapter 5 of the Michigan Insurance Code?

A. Consumer's financial information.

11. Which of the following is an example of an unfair claim settlement practice?

A. Delaying the settlement of claims submitted in which liability has become clear.

26. Each of the following are characteristics of a fixed annuity contract EXCEPT

A. Funds are invested in a separate account.

39. Term life insurance is more appropriate than whole life insurance when the

A. Maximum protection is needed at lowest cost.

38. At the time of an insurer's death, a per capita distribution of policy proceeds are paid to

A. The estate of the deceased beneficiary.

29. How often must a report of the value of a universal life policy be sent?

Anually

35. If a policyowner chooses to pay premium for a specified number of years, this permanent life insurance policy is referred to as

B. A limited payment policy.

34. Which of the following allows for a multiple of the face amount to be paid if the insured dies because of an accident?

B. Accelerated death benefit

65. What insurance concept is characterized by the tendency for more poor risk applicants to apply for insurance than good risk applicants?

B. Adverse selection

66. Which of the following is NOT an example of a producer's duties?

B. Delivering policies

36. Term life insurance offers pure protection

B. For a specified period of time.

48. 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 owner's interest?

B. Key employee life insurance

17. If an insured dies after receiving partial benefits of the face amount from an accelerated death benefits rider on a life insurance policy, what will happen to the death benefit proceeds?

B. The insurer will pay the balance of the face amount to the beneficiary

15. Generally, what is tax consequence of a withdrawal prior to age 59 ½ from an IRA?

C. 10% penalty.

9. The Group Life Underwriting risk selection process helps protect insurers from

C. Adverse selection.

8. An insurance producer shall NOT act as an agent of an insurer until that producer has become

C. An appointed agent of that insurer.

30. Without written consent, a policyowner cannot change the beneficiary if the policyowner has named

C. An irrevocable beneficiary.

6. A life insurance producer may assist as a field underwriter for an insurer by

C. Arranging for an applicant's medical examination required for insurance purposes.

56. In group life insurance, what document does the individual receive as proof of coverage?

C. Certificate of insurance

63. Under the One-Year Term dividend option, the dividend is used to buy term coverage for a year, with the amount of term coverage usually limited to the

C. Current cash value of the policy

58. What is the term used to describe the taxable portion of non-qualified annuitization payments?

C. Exclusion ratio

40. An insurance policy is a unilateral contract because ONLY the

C. Insurer is legally bound.

54. Which of the following is a characteristic of level premium term life insurance?

C. It matches the level amount of protection on the insured's life expectancy

41. Which approach considers the insured's future stream of income?

C. Living Benefits Approach.

62. Purchasing adequate life insurance to fill all gaps is part of a

C. Needs analysis approach

61. The difference between the face value of a life insurance policy and its cash value is the

C. Net amount

57. An accelerated death benefit

C. Pays a portion of the face amount when a policyowner is determined to be terminally ill

45. A reinstatement clause outlines conditions that include

C. Proof of insurability.

22. As the insured's needs change in order to increase the death benefit on an adjustable life policy, the policyowner must

C. Provide evidence of insurability

67. According to the Michigan Insurance Code, which of the following MUST a producer do when replacing a Life Insurance policy?

C. Submit to the replacing insurer a list of all Life Insurance policies or annuity contracts proposed to be replaced

20. Which of the following elements of a contract would be absent for an applicant under the influence of alcohol at the time of application?

Competent parties

59. Withholding a material fact by the applicant is called

Concealment

23. A whole life policy is replaced with an annuity without incurring a tax penalty. This is referred to as

D. A 1035 exchange? 03:25

31. In a life insurance contract, warranties are considered to be

D. Absolute true statements.

55. The grace period is a period of time

D. After the premium is due but while the policy remains in force.

32. Which of the following Is REQUIRED to be licensed as an insurance producer?

D. An individual selling a policy for commission.

4. When would an attending physician's statement be appropriate for life insurance purposes?

D. At the request of the insurer when it could affect the underwriting decision but with the consent of the applicant.

46. When advertising identity of the insurer shall be

D. Clearly identified

24. When an insurer appointment with a producer is terminated, the party that MUST notify the producer of the termination is the

D. National Association of Insurance Commissioners (NAIC)

37. Which of the following elements of insurable risks allow the insurance company to exclude nuclear events or war from coverage?

D. Not catastrophic

25. Which of the following is NOT a right of the insurance policyowner?

D. Revoke an absolute assignment.

14. Contributions made to a Roth IRA are

D. Taxable if withdrawn in less than 5 years.

27. What is it called when an officer of a company gives an agent authority either orally or in writing?

Direct

52. What would NOT be covered under an additional insured rider attached to a life insurance policy?

Employees

10. Which of the following are policy proceeds that can be obtained in a lump sum and invested to create an estate for the beneficiary?

Estate creation

1. In a whole life insurance policy, all of the following are nonforfeiture options EXCEPT

Extended term

18. A producer that presents a claim for payment which contains false information is guilty of

Fraud

43. A producer who knowingly submits a false statement in support of a claim may be found guilty of

Fraud

47. An individual who knowingly submits a false statement in support of a claim may be found guilty of

Fraud

49. A producer who knowingly solicits new insurance risks by an insolvent insurer is guilty of

Fraud

50. The health portion of the life application asks for

Height and weight

19. Universal life products are flexible premium policies that are

Interest sensitive

42. An insurer can generally refuse to issue a life policy solely because of the proposed insured's

Job

16. A life insurance rider which reimburses expenses incurred in a convalescent or nursing home facility is

Long term care

28. To avoid a 50% excise tax, your first distributions must be made by

March 1st

12. A participating life insurance policy distributing dividends is called.

Mutual

44. An insurer owned by its policyowners and pays dividends is considered a

Mutual company

51. Which rider includes coverage for the insured's spouse and children?

Payer benefit

5. When an individual schedules regular physical examinations, which of the following risk management techniques is being used?

Risk transfer

13. Which form of insurer has shareholders?

Stock company

7. Who can surrender an annuity during the accumulation period?

The owner

2. When an insured desired to give specific directions on how the policy proceeds are to be distributed including to minors, it is most appropriate to name what type of beneficiary?

Trust