Life Insurance Practice
The hearing for a cease and desist order must occur within how many days of the order date?
15
How many days does the viator have to rescind a contract after receiving the viatical settlement proceeds?
15 calendar days
How many hours of continuing education must be completed in ethics?
3
An insolvent insurer is one who is unable to pay its obligations when they are due or has fewer assets than liabilities for a period of
3 years.
What is the waiting period for rate filing before each rate may become effective?
30 days
When replacing a policy, a producer must provide the policyowner with a notice explaining the right to return the policy within
30 days
An individual insurance agent may operate as a viatical settlement broker without obtaining a separate license if the viatical settlement broker activities are incidental to the agent's business transactions, and if the agent has been licensed for life insurance for at least what time period?
5 years
All of the following could own group life insurance EXCEPT
A group needing low-cost life insurance.
In insurance, an offer is usually made when
An applicant submits an application to the insurer.
The current interest rate on an equity indexed annuity is often based on
An index like Standard & Poor's 500.
Which of the following is a true comparison between annuities and life insurance?
Both annuities and life insurance use mortality tables.
Which of the following best describes fixed-period settlement option?
Both the principal and interest will be liquidated over a selected period of time.
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is
Conditional.
All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT
Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
Which of the following riders would NOT cause the Death Benefit to increase?
Payor Benefit Rider
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
Proof of insurability is not required.
Statements made by an applicant for a life insurance policy which are true to the best of one's knowledge are referred to as
Representations.
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
The insured's premiums will be waived until she is 21.
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 is NOT a characteristic of an insurable risk?
The loss must be catastrophic.
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract.
All of the following statements are true regarding installments for a fixed amount EXCEPT
The payments will stop when the annuitant dies.
If an insured continually uses the automatic premium loan option to pay the policy premium,
The policy will terminate when the cash value is reduced to nothing.
Which of the following best defines target premium in a universal life policy?
The recommended amount to keep the policy in force throughout its lifetime
Which of the following is NOT true regarding Equity Indexed Annuities?
They earn lower interest rates than fixed annuities.
Which nonforfeiture option has the highest amount of insurance protection?
Those who have been insured under the plan for at least 5 years
Under what circumstances may a life insurance agent deliver a policy that is dated up to 6 months before the application was taken?
To avoid an increase in premium rate for the insured
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
How often must the Director examine financial affairs of domestic insurers?
Every 3 years
When an employee terminates coverage under a group insurance policy, coverage continues in force
For 31 days.
An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed insurability option
According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following?
Guaranteed surrender value
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
What type of insurance would be used for a Return of Premium rider?
Increasing Term
Which statement regarding insurable risks is NOT correct?
Insureds cannot be randomly selected.
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
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 usually true of a participating life insurance policy?
It pays dividends to policyowners.
Which of the following statements about the reinstatement provision is true?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
Which of the following statements is TRUE concerning the Accidental Death Rider?
It will pay double or triple the face amount.
During replacement of life insurance, a replacing insurer must do which of the following?
Obtain a list of all life insurance policies that will be replaced