Life Insurance Exam Study Questions
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?
$100,000
A policy form is deemed to be approved by the Commissioner if it has been on file for at least how many days?
30
What is the penalty for IRA distributions that are below that required minimum for the year
50%
If the insurer does not pay the death benefit to the beneficiary within the required time period, what interest rate will be assessed on the proceeds?
6%
A tornado that destroys property would be an example of which of the following?
A peril
If a company has a Simplified Employee Pension Plan, what type of plan is this?
A qualified plan for a small business
When an annuity is written, whose life expectancy is taken into account?
Annuitant
Which of the following is a feature of a variable annuity?
Benefit payment amounts are not guaranteed
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
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
Type of insurance sold to a debtor and designed to pay the amount due on a loan if the debtor dies before the loan is repaid is called
Credit life
For a retirement plan to be qualified, It must be designed for the benefit of
Employees
During partial withdrawal from a universal life policy, which portion will be taxed?
Interest
The mode of premium payment
Is defined as the frequency and the amount of the premium payment
SIMPLE Plans don't require
Less than 100 employees
Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives?
Medical Information
What describes the MIB?
Non profit organization that maintains underwriting information on applicants for life and health insurance
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply policy dividends to increase the death benefit. This is called
Paid-up additions
Which of the following riders would NOT cause the Death Benefit to increase?
Payor Benefit Rider
An applicant wants to buy a policy that has a cash value element. Which type should she buy?
Permanent
Who does a life settlement broker represent?
Policyowner
What is NOT used to calculate an individuals life value in HLVA
Predicted needs of family after the insured's death
Which of the following will be included in a policy summary?
Premium amounts and surrender values
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid-up
The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?
Reduction of premium
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
Replacement rule
Which settlement option provides a single beneficiary with income for the rest of his/her life?
Single Life
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection
A 60-year-old participant in a 401 (k) plan takes a distribution and rolls it over to IRA within 60 days. Which of the following is true
The amount of the distribution is reduced by the amount of a 20% withholding tax
In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?
The annuitant will receive the higher of either the guaranteed minimum rate or current rate
Life settlement brokers or providers are required to give the owner a separate disclosures document no later than what date?
The date of application
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
The policy is owned by the company
What must happen when an individual policy or annuity has been personally delivered to the policyowner?
The policyowner must sign a delivery receipt
True/False: In a spouse term rider the rider is usually level term insurance
True
Which of the following requires a securities license?
Variable annuity
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage