LIFE INSURANCE

Which of the following is NOT true about a joint and survivor annuity benefit option?

1. Payments stop after the first death among the annuitants.

Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?

4. Buy-sell agreement

Which of the following types of insurance policies is most commonly used in credit life insurance?

4. Decreasing term

In a survivorship life policy, when does the insurer pay the death benefit?

2. Upon the last death

Which of the following types of insurance policies would perform the function of cash accumulation?

2. Whole life

In insurance, an offer is usually made when

3. An applicant submits an application to the insurer.

An agent selling variable annuities must be registered with

FINRA?????

In insurance transactions, fiduciary responsibility means

1. Handling insurer funds in a trust capacity

Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information

1. Held or transmitted in any form.

Life income joint and survivor settlement option guarantees

1. Income for 2 or more recipients until they die.

Which of the following is NOT a type of whole life insurance

1. Increasing term

All of the following are beneficiary designations EXCEPT

1. Specified

All of the following statements are true regarding group insurance EXCEPT

The policy is issued for one year and may be renewed annually with evidence of insurability.

Are insurance company underwriters allowed to discriminate?

1. Yes, but not unfairly

Weiss and Fetch?

3. Guides describing company financial integrity

An independent adjuster may include which of the following?

1. A firm who acts on behalf of the insurer

All of the following statements are correct regarding credit life insurance EXCEPT

1. Benefits are paid to the borrower's beneficiary.

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.

What is the waiting period on a Waiver of Premium rider in life insurance policies?

1. 3-6 months

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

1. Costs of training a replacement

The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the

1. Entire contract.

Which of the following terms best describe the coverage provided by term policies, as compared to any other form of protection?

1. Greatest

Which of the following is NOT true regarding a nonqualified retirement plan?

1. It needs IRS approval.

Which of the following is NOT true regarding the accumulation period of an annuity?

1. It would not occur in a deferred annuity

How are state Insurance Guaranty Associations funded?

3. By their members - authorized insurers

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

3. Universal Life - Option A

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?

4. Reduction of premium

A domestic insurer issuing variable contracts must establish one or more

4. Separate accounts.

Which of the following would help prevent a universal life policy from lapsing?

4. Target premium

Jason wants to advertise his life insurance practice. Which of the following must he include in his advertisements?

4. The name of the city in which he has his principal office

Insurance producers must ensure that contracts they recommend are in the best interest of the insured. This is called

Suitability

Which of the following best describes fixed-period settlement option?

1. Both the principal and interest will be liquidated over a selected period of time.

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?

1. The date of medical exam

Which of the following statements is correct regarding a whole life policy?

1. The policyowner is entitled to policy loans.

All of the following statements are true regarding installments for a fixed amount EXCEPT

3. The payments will stop when the annuitant dies

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

3. Those who have been insured under the plan for at least 5 years

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

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

Life expectancy is used in the calculation of which of the following?

4. Life settlements

All agents, brokers, and reinsurance intermediaries have a/an

2. Fiduciary responsibility to their clients.

Which of the following premium modes would result in the highest annual cost for an insurance policy?

1. Monthly

Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive

1. Nothing; the payments will cease.

What describes the specific information about a policy?

2. Policy summary

Joe, Larry, and Curly own a small business. They have made a legal arrangement which states that if one of them dies or becomes disabled, the other two will be able to buy the partner's shares. Which term best describes this arrangement?

3. Business Continuation

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

3. Depreciation period

Which of the following is true regarding taxation of dividends in participating policies?

3. Dividends are not taxable.

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

3. Implied

How long must insurers keep records of claims?

6 years

Which of the following would NOT fall into the category of costs associated with death?

1. The expense of a vacation for surviving family members

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

1. It is reduced to the amount of what the cash value would buy as a single premium.

Employer contributions made to a qualified plan

3. Are subject to vesting requirements

After issuing a policy, an insurance company discovers that the policyholder concealed information on the application. The insurance company wants to cancel the policy and give back the money the policyholder has paid. This is an example of

Recission?

Traditional IRA contributions are

TAX DEDUCTIBLE

Children's riders attached to whole life policies are usually issued as what type of insurance?

Term

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

1. Option B

Why should the producer personally deliver the policy when the first premium has already been paid?

2. To help the insured understand all aspects of the contract

A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?

Immediate

Who may contribute to a Keogh (HR-10) plan?

2. Self-employed plumber

Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources?

2. Term

If a beneficiary is NOT named for annuity benefits, to which entity will the benefit be paid?

2. The annuitant's estate

A Straight Life policy has what type of premium?

4. A level annual premium for the life of the insured

Events in which a person has both the chance of winning or losing are classified as

1. Speculative risk.

Which of the following best details the underwriting process for life insurance?

1. Selection, classification, and rating of risks

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

2 years

Which of the following individuals must pass a written examination to be licensed as a life insurance agent?

2. A resident of NY wishing to transact business in NY

Which of the following would be required to be licensed as an insurance producer?

2. A salaried employee who advertises and solicits insurance

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

2. Guaranteed insurability rider.

Which of the following statements is TRUE concerning the Accidental Death Rider?

2. It will pay double or triple the face amount.

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?

2. Joint and survivor

Variable Whole Life insurance is based on what type of premium?

2. Level fixed

Which of the following is NOT true regarding the needs approach method of determining the value of an individual's life?

2. Need is predicted using the number of years until the insured's retirement.

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

3. Automatic premium loan

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

3. Incontestability clause.

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?

3. Inspection Report

What is the benefit of choosing extended term as a nonforfeiture option?

3. It has the highest amount of insurance protection.

If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?

3. It is a percentage of the cash value and decreases over time.

Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?

3. Predicted needs of the family after the insured's death.

What is a definition of a unilateral contract?

4. One-sided: only one party makes an enforceable promise

Which of the following statements is an accurate comparison between private and government insurers?

4. Private insurers may be authorized to transact insurance by state insurance departments.

An agent in another state wants to become an agent in New York. The other state gives the same privileges to New York agents wanting to be licensed in that state as it does its own agents. New York, therefore, extends the privileges of its agents to the prospective agent of the other state. What is this called?

4. Reciprocity

Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?

4. Reduction

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?

4. The death benefit will be smaller.

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?

4. The policy will terminate when the loan amount with interest equals or exceeds the cash value.

Which of the following is NOT a justifiable reason for the Superintendent to revoke, suspend, or refuse to renew a license?

A licensee does not sell enough policies to reach his financial goals.

If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?

3. It is only taxable if the cash value exceeds the amount paid for premiums.

The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to

3. The insured's estate.

What is the purpose of a free-look period in insurance policies?

4. It allows the insured to reject the policy with a full refund.

Which statement is NOT true regarding a Straight Life policy?

4. Its premium steadily decreases over time, in response to its growing cash value.

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

4. Fair Credit Reporting Act

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?

4. Joint Life Policy

Attempting to determine how much insurance an individual would require based upon their financial objectives is known as

4. Needs approach.

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called

2. Paid-up additions.

An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)

403B Plan TSA

an insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?

False advertising

The type of policy that can be changed from one that does not accumulate cash value to the one that does is a

2. Convertible Term Policy.

In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?

5 years

In term policies, what happens to the premium throughout the term of the policy?

4. Premium always remains level.

Which statement regarding insurable risks is NOT correct?

4. Insureds cannot be randomly selected.