missed questions

Any authorized insurer within a state

Who must be a member of insurance guaranty associations ?

It does not have a guaranteed death benefit

All of the following statements are true regarding an Ordinary ( Straight ) Life policy EXCEPT

Ordinary Life or Continuous Premium Whole Life

Straight Life also called

c ) Continue to increase

A whole life policy is surrendered for a reduced - paid up policy . The cash value in the new policy will a ) Decrease over time . b ) Reduce to the pre - surrender value . c ) Continue to increase d ) Remain the same .

Immediately

If a loan request is for payment of due premiums on the policy , how soon must the insurer issue a loan ? a ) Immediately b ) Within 10 days c ) Within 30 days d ) Within 90 days

A : When the commissions from controlled business do not exceed the aggregate commissions on all the other business ( specific limits may vary from state to state )

Q : When is controlled business legal

the policy , ( 2 ) a copy of the application and ( 3 ) any riders or amendments .

The entire contract includes

not subject to federal taxation

to the policyowner If life insurance proceeds are collected in a lump - sum payment , they are generally

c ) Prior to performance of the test

If a life insurance company uses HIV testing as a part of its underwriting , when must an applicant be notified of the procedure ? a ) Prior to solicitation of the policy b) Prior notice is not required c ) Prior to performance of the test d ) Prior to ordering a physical examination

Insurance company officers , directors , or any other employees who do not transact insurance and who do not receive commissions for their services usually , their responsibilities include administrative , executive or clerical ) .

In general , who can be excluded from producer licensing and examination requirements ?

Fiduciary

The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility ?

Cash , reduced premium , accumulation at interest , paid - up additions , paid - up option , one - year term , and acceleration of endowment

What are the dividend options in life insurance policies ?

Cash surrender reduced paid up and extended term (REC)

What are the three nonforfeiture options in life insurance policies ?

c ) A general account

Where are premiums from fixed annuities invested ? a ) A hedge fund b ) A separate account c ) A general account d ) A variable annuity

A buyer's guide

The entire contract includes all of the following EXCEPT a ) Any riders or amendments . b ) A buyer's guide c ) The life insurance policy . d ) A copy of the application .

fixed premium and guaranteed minimum death benefit

Variable whole life insurance contains

Broker

What type of licensee represents the insured ?

a ) Whole life without proof of insurability

When an insured terminates membership in the insured group , the insured can convert to a ) Whole life without proof of insurability b ) Whole life with proof of insurability . c ) Term without proof of Insurability d ) Term with proof of insurability .

Straight Life

charge a level annual premium for the lifetime of the insured and provides a level , guaranteed death benefit . If the insured lives to age 100 , the policy endows matures ) and the face amount is paid to the insured at that time

7 years

a life insurance policy qualifies as a Modified Endowment Contract ( MEC ) if the amount of premium paid exceeds the amount that would have provided paid - up insurance in how many years ?

30 days

How many days ' notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans ?

c ) Prior to performance of the test )

If a life insurance company uses HIV testing as a part of its underwriting , when must an applicant be notified of the procedure ? a ) Prior to solicitation of the policy b ) Prior notice is not required c ) Prior to performance of the test d ) Prior to ordering a physical examination

immédiately

Loan requests for payment of due premiums must be fulfilled Requests for any other reason may be deferred up to 6 months

Misrepresentation

On its advertisement , a company claims that it has funds in its possession that are , in fact , not available for the payment of losses or claims . What is the company guilty of ?

Purchase of a new home

The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT a ) Marriage . b ) Purchase of a new home c ) Approximately every 3 years between the ages of 25 and 40 . d ) Birth of a child .

The agent

What type of licensee represents the insurance company ?

a ) The principal portion is generally income tax - free while the interest portion is taxed as ordinary income .

When a settlement option is chosen at death , how are the monthly income payments taxed ? a ) The principal portion is generally income tax - free while the interest portion is taxed as ordinary income b ) The portion of the payment that represents the terminal reserve is income taxable . c ) The total monthly amount is tax - free since it derived from death benefits . d ) The entire amount is taxable since the benefit was not taken in a lump sum .

Whenever deemed necessary , but at least once every few years

When can the Commissioner or Director examine insurers ?

Reduced paid - up

Which nonforfeiture option provides coverage for the longest period of time ?

c ) Test results must be sent to the Department of Insurance

Which of the following statements regarding HIV testing is NOT true ? a ) The insurer is responsible for the cost of HIV testing . b ) Written consent from the applicant is required prior to the examination . c ) Test results must be sent to the Department of Insurance d ) Testing may be waived at the discretion of the insurer .

Variable whole life insurance

. The policy's cash value fluctuates and therefore is not guaranteed .

collaterally assigned to a lender

Transfer for value rules do not apply when a policy is

a ) If there is a transfer for value

Under which of the following conditions would life insurance proceeds be taxable by the federal government ? a ) If there is a transfer for value b ) If collaterally assigned to a lender c ) If taken as a lump sum d ) If paid to the policyowner

Primary beneficiary

What beneficiary designation has first claim to the death proceeds of a life insurance policy ?

Collateral assignment

What type of assignment is used to secure the payment of a debt with an existing life insurance policy ?

straight life

policy builds cash value . The insurer guarantees the cash value and death benefit

For continuation of business in case the licensed producer dies or becomes disabled

For what reason can a temporary license be issued ?

Authorized or admitted

If an insurer holds a Certificate of Authority , it is known as what type of insurer ?

when the policy is delivered .

The free - look period begins when

Producer's spouse or designee in case the licensed producer dies or becomes disabled

Who can usually be granted a temporary license ?

The cash value is converted to the same face amount as in the whole life policy

What happens to a policy's cash value under an extended term nonforfeiture option ?

To protect policyowners , insureds and beneficiaries from financial losses caused by insolvent insurers

What is the purpose of insurance guaranty associations ?

a ) Extended term

When a whole life policy is surrendered for its nonforfeiture value , what is the automatic option ? a ) Extended term b ) Paid up additions c ) Cash surrender value d ) Reduced paid up

Guaranteed Insurability Rider

allows the owner to purchase additional amounts of insurance without proof of insurability at marriage , birth of a child , and / or every 3 years or so between the ages of 25 and 40

d ) Reports may be sent to anyone who requests one

All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT a ) Insurers are not required to give customers a copy of the report . b ) It applies to credit reports ordered in connection with insurance , banking and employment . c ) The customer must be notified if adverse action is taken as a result of a report . d ) Reports may be sent to anyone who requests one

d ) Delivery of the policy .

In this state the owner gets a " free look " of a specified number of days from a ) Acceptance of the risk by the insurer . b ) The date of application . c ) Acceptance of the application . d ) Delivery of the policy .

Authorized or admitted

If an insurer meets the state's financial requirements and is approved to transact business in the state , it is considered what type of insurer ?

The longer the period selected , the smaller each installment will be

In the fixed - period settlement option , how will the number of installments for the death benefit proceeds determine the amount of the installments ?

The insurer will pay a benefit of twice the face amount

What does the term ' double indemnity ' mean ?

convert to whole life without proof of Insurability

When a member terminates membership in a group , he or she can

a ) Minimum death benefit

Which of the following is guaranteed under a variable whole life insurance policy ? a ) Minimum death benefit b ) Interest rates c ) Cash value d ) Stock performance