Life insurance

an insured has a continuous premium whole life policy, she would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. what dividend option could she use

paid up option

an insured has a continuous premium whole life policy, she would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. what dividend option could she use?

paid-up option

Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility?

promptly forwarding the premiums to the insurance company

which type of insurance is based on mutual agreements among subscribers?

reciprocal insurance

Under an extended term nonforfeiture option, the policy cash value is converted to

the same face amount as in the whole life policy

which of the following is not true regarding equity indexed annuities?

they earn lower interest rates than fixed annuities.

in insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

unilateral

What is the name for the owner of a life insurance policy who enters into a viatical settlement contract?

viator

If a cyber security event has occurred, licensees must obtain records of the incident for no less than?

5 years

An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay?

50% tax on the amount not distributed as required

A straight Life policy has what type of premium?

A level annual premium for the life of the insured

what is a material misrepresentation?

A statement by the applicant, upon discovery, would affect the underwriting decision of the insurance company

an underwriter is reviewing the medical question in the applicant and needs further information due to medical situation the applicant had in the past. what will the underwriter require?

Attending physician statement

which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy

The authority granted to an agent through the agents contract is referred to as

Express authority

In a direct transfer, how is money transferred from one retirement plan to a traditional IRA?

From trustee to trustee

what insurance concept is associated with the names Weiss and Fitch?

Guides describing company financial integrity

which authority is NOT stated in an agents contract but is required for the agent to conduct business?

Implied

In ohio, all life insurance policy illustrations must include all of the following EXCEPT

Name, age, and sex of the insurance producer

What describes the specific information about a policy?

Policy summary

who might receive dividends from a mutual insurer

Policyholders

Which of the following is NOT a goal of risk retention?

To minimize the inured's level of liability in the event of loss

Agent/Producer

a legal representative of of an insurance company; the classification of producer usually includes agents and brokers;agents are the agents of the insurer.

Applicant or proposed insured

a person applying for insurance

an insurance producer who by contract is bound to write insurance for only one company is classified as a/an?

captive agent

A producer who fails to desperate premium monies from his own personal funds is guilty of

commingling

what term best describes the act of withholding material information that would be crucial to an underwriting decision?

concealment

the requirement that the agents not commingle insurance monies with their own funds is known as

fiduciary responsibility

which of the following methods of calculating the amount of life insurance needed takes into account the insured wages, years until retirement, and inflation?

human life value approach(HLVA)

what do individuals use to transfer the risk of loss to a larger group?

insurance

which statement regarding insurable risks is NOT correct?

insureds cannot be randomly selected

which of the following statements about the reinstatement provision is true?

it requires the policy owner to pay all the overdue premiums with interest before the policy is reinstated

which of the following best describes gross annual premium

net premium plus

a person filed a report about an insurance fraud practice. The person could be sued for civil damages by who?

no one!

all of the following would be considered an insurance transaction except

obtaining an insurance license.

a participating insurance policy may do which of the following?

pay dividends to the policy owner

what method do insurers use to protect themselves against catastrophic losses?

reinsurance

Insurance is the transfer of

risk

hazard is best defined as

something that increases the risk of loss

which of the following types of insurers is owned by stockholders?

stock

When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is this money placed?

the insurance company's general account

what is the purpose of establishing the target premium for a universal life policy?

to keep the policy in force

in forming an insurance contract, when does acceptance usually occur?

when an insurer's underwriter approves coverage

if an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about?

whether an insurable interest exist between the individuals

which of the following produces evaluations of insurers' financial a status often used by state departments of insurance?

AM best

Which of the following best describes an insurance company that has been formed under the laws of this state?

Domestic

Twin brothers are starting a business. They know it will take several years to build the business to the point they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?

Joint Life

for the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become?

Larger

The interest earned on policy dividends is

Taxable

beneficiary

a person who receives the benefits of an insurance policy

which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company.

aleatory

which of the following types of agent authority is also called "perceived authority?

apparent

an individual was involved in a head on collision while driving home on day. His injuries were not serious and he recovered. However, he decided that in order to never be involved in another accident he would not drive or ride in a car ever again. Which method of risk management does this describe?

avoidance

Under which non forfeiture option does the company pay the surrender value and have no further obligations to the policy owner?

cash surrender

to legally transact insurance in this state, an insurer must obtain which of the following?

certificate of authority

a producer who fails to separate premium monies from his own personal funds is guilty of?

commingling

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

common disaster clause

When both parties to a contract must preform certain duties and follow rules of conduct to make the contract enforceable, the contract is?

conditional

which of the following best describes the aleatory nature of an insurance contract?

exchange of unequal values

which of the following is NOT true regarding a Certificate of Attorney

it is issued to group insurance participants

what is true a of a children's rider added to an insured permanent life insurance policy?

it is term coverage that is convertible to permanent insurance at or prior to the child reaching maximum coverage age.

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a

joint life annuity

for the reported losses of an insured group to become more likely to equal the statistical probability of loss for the particular class, the insured group must become

larger

insurance is a contract by which one seeks to protect another from

loss

indemnity

main principle of insurance, meaning that the inured cannot recover more than their loss; the purpose of insurance is to restore the insured to the same position as before the loss

After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?

monthly premium waiver and monthly income

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?

reduction

annuities can be used to fund which of the following?

retirement plans

adverse selection is a concept best described as

risk with higher probability of loss seeking insurance more often than other risk

adverse selection is a concept best described as

risks with higher probability of loss seeking insurance more often than other risk

which of the following is a characteristic of a reciprocal insurance exchange?

the chief administrator of the insurer is called an attorney-in-fact

which of the following statements about group life is correct?

the cost of coverage is based on the ratio of men and women in the group

excluding life insurance, under what condition may a policy owner transfer their personal insurance policy to another person?

the insured will need the written consent of the insurer.

An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur?

the interest will continue to accumulate tax deffered

the risk of loss may be classified as

pure risk and speculative risk

risk

the uncertainty or chance of loss occurring.

the authority granted to an agent through the agent's contract is referred to as

express authority

the authority granted to an agent through the agents contract is referred to as

express authority

which of the following is NOT a characteristic of an insurable risk?

the loss must be catastrophic

An insurance producer who by contracts is bound to write insurance for only one company is classified as a/an

Captive agent

when an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

consideration

which of the followings has the authority to issue a cease and desist order?

director

which of the following best describes an insurance company that has been formed under the laws of this state?

domestic

under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid.

for 20 years or until death whichever occurs first

in a direct transfer, how is money transferred from one retirement plan to a tradition IRA?

from trustee to trustee

Which is TRUE about the cash surrender non forfeiture option?

funds exceeding the premium paid are taxable as ordinary income