Practice life insurance test
Max penalty for habitual willful noncompliance with the fair credit reporting act
$2500
The fair credit reporting act says negative info includes what 3 things
1. Delinquencies 2. Late payment 3. Insolvency or other form of default
To seek variable life insurance policies, an agent just receive what 3 things:
1. Life insurance license 2. FINRA registration 3. Securities license
4 essential elements of all legal contracts:
1. Offer and acceptance 2. Consideration 3. Competent parties 4. Legal purpose
The ownership provision entitled the policyowner to do what 3 things?
1. Recurved a policy loan 2. Assign policy 3. Designate a beneficiary
Three types of whole life policies:
1. Straight life 2. Limited payment 3. Single premium
The maximum period of time a temporary license can be in force
15 months
Insurers must keep files of all advertisements used in Georgia for the minimum of how many years
4
What is the waiting period on a waiver of premium
6 months
A paid up non forfeiture option benefit will become effective as specified in the policy, unless the person selects another option how many days after due date of premium is in default
60
Example of a third party owner
A policyowner why isn't the insured
2 types of assignments:
Absolute and collateral
The period of time over which the annuitant makes payments into an annuity
Accumulation Period
Period of time during which the payment earn interest and grow tax deferred
Accumulation period
Who must sign the statements disclosing whether or not replacement is involved along with application
Agent and the applicant
What documentation grants express authority to an agent
Agents contract with the principal
Product that provides income for specified period of years or for life and protects a person against outlining his or her money
Ah
Inserted pays $100 premium per month, yet insurer promises to pay $10,000 for covered loss. What characteristic of a contract is this
Aleatory
When transacting business in this state an insurer formed under the laws of another country is known as....
Alien insurer
What product provides income got a specified period of years or for life, and protects a person against outliving god or her money
An annuity
What will a consumer report not contain info about
Ancestry
The death protection component of universal life insurance is always
Annually renewable term
The least expensive first year premium payment is found in....
Annually renewable term
A universal life insurance policy is best described as an
Annually renewable term policy with a cash value account
Universal life insurance policy is best described as an
Annually renewable term policy with a cash value account
What type of insurance may be used to fund a buy-sell agreement
Any form of life insurance
What is also perceived authority
Apparent
What type of agent authority is called "perceived authority"
Apparent
If the initial premium isn't paid with the application, when will the agent be required to collect the premium and what will the applicant need to fill out
At the time of policy delivery and a strand of good health
When does the 10 day free look period begin
Begins when policy is delivered
If a settlement option isn't selected by the policyowner before the insured dies, who can choose the option
Beneficiary
What is a feature of a variable annuity
Benefit payment amounts are not guaranteed
A contract that establishes what will be done with a business in the event that an owner dies
Buy-sell agreement
How would the policyowner of an adjustable life policy increase the death benefit
Can be increased by providing evidence of insurability
Allows an insurer to send the policyowner an annual, non taxable dividend check
Cash option
What must an insurer obtain in order to transact insurance within a given state
Certificate of authority
A business owner can make a______ ______ of his or her life insurance policy to the bank
Collateral assignment
If there's controversy between the insurance company and insured, the agent is the agent of the:
Company
Contract where the purported insured makes the premium payment on a new insurance policy and if the insured dies, the insurer will part the death benefit to the beneficiary of policy is approved
Conditional
Says that coverage will be effective either on the date of the application or the date of the medical exam
Conditional receipt
The act of trying to discourage a policyholder from dropping their existing policy is called
Conservation effort
An insurer neglected to pay a legit claim that is covered under the terms of the policy. What principle did the insurer violate
Consideration
Something of value that is transferred between the two parties to form a legal contract
Consideration
When an insured makes truthful statements on the application for insurance and pays the required premium it is known as what
Consideration
When an insured pays an annual premium to his insurer and the insurer promises to pay benefits in accordance With the terms of the contract
Consideration
Type of policy that can be changed from one that doesn't accumulate cash value to the one that does is a....
Convertible term policy
What position is responsible for offering advice on insurance policies
Counselor
Permitting individuals of the same class to be charged a different rate for the same insurance is what
Discrimination
Term that's used to name the non taxed return of unused premiums
Dividends
Hope is the commissioner of insurance selected to be the chief officer of the department of insurance
Elected to office
When does a producers license expire
Every 2 years on the last day of the producers birth month
If policyowner repeatedly replaces policies from the same insurer or agent, the pattern is considered to be what?
Evidence that the insurer or agent knew the replacement was intended in connection with the sale and intended to violate the replacement region
Which non forfeiture option has the highest amount of insurance protection
Extended term
(T/F) beneficiary's consent must be included in an insurance contract to be considered legally binding
False
(T/F) in variable products the premiums are invested in the insurers general account
False
(T/F) the President and employee of a family cooperation are eligible for a Keogh retirement plan
False
(T/F) the annuitant can't be the same person as the annuity owner
False
(T/F)Insurers selling variable products invest the customers money in a general account
False
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member
Family term rider
If a company is located in one state but transacts insurance in another, what is the company called
Foreign
The death benefit under universal life option B,
Gradually increases each year by the amount that the cash value increases
What best describes coverage provided by term policies
Greatest
A guy purchases a permanent life insurance policy with a face value of $25.000. While this is all the insurance he can afford at this time, he wants to be sure additional coverage will be available in the future. What option should be included in the policy
Guaranteed insurability option
What forest fixed annuities provide for
Hedge against inflation
When will the insured be able to receive the full face amount from a whole life policy
If the insured loves to age 100
Authority that isn't stated in an agent contract but is required for the agent to conduct business
Implied
Prevents an insurer from denying a claim due to statements in an application after the policy has been in force for two years
Incontestability clause
A return of premium term life policy is written as what type of term coverage
Increasing
What type of insurance would be used for a return of premium rider
Increasing term
What type of report includes the insureds financial status, hobbies and habits
Inspection report
Two components of a universal policy
Insurance and cash account
Insured purchased a 10 yr lvl term life policy that is guaranteed renewable and convertible. What happens at end of the 10 yr term
Insured may renew policy for another 10 yrs but at a higher premium rate
Who makes up the MIB
Insurers
Provision that states the insurer duty to pay benefits upon the death of the insured, and to whom the benefits will be paid
Insuring clause
Purpose of conditional reciept
Intended to provide coverage on a date prior to policy issue
During partial withdrawal from a universal life policy which portion will be taxed
Interest
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. What settlement option is this
Interest only option
Policy that depends on the company's investment and expense factors, the cash value could change from those down in the policy at issue time
Interest sensitive whole life
When does the premium change on children's rider policy
It doesn't change, based on average number of children
Why is an equity indexed annuity considered to be a fixed annuity
It has guaranteed minimum interest rate
What happens if the loan and interest aren't repaid and the insured dies in an automatic loan provision
It will be subtracted from the death benefit
When a reduced paid up non forfeiture option is chosen, what happens to the face amount of the policy
It's reduced to the amount of what the cash value would buy as a single premium
Type of settlement option which posts throughout the lifetimes of two or more beneficiaries is called
Joint and survivor
Straight life policy has what type of premium
Level annual premium for life of insured
What type of policy will pay the death benefit of the insured dies during the 20 year premium paying period, and nothing if death occurs after the 20 year period
Level term
Another name for straight life
Life income
An applicant who recurved a preferred risk classification qualifies for
Lower premiums than a person who receive standard risk
2 typ
Lower rates
Equity indexed abilities earn what type of interest rates rather than fixed annuities
Lower rates
If a settlement option isn't chosen by the beneficiary or policyowner what option will be chosen
Lump sum
What part of insurance application would constrain info regarding the cause of death of applicants deceased relatives
Medical info
Which part of an insurance application would contain info regarding the cause of death of the applicants deceased relatives
Medical information
A nonprofit trade organization which recorded adverse medical info from insurance companies and maintains confidential medical impairment on n individuals
Medical information bureau
Name of clause that is included in a policy that limits or eliminates death benefit of the insured does as a result of war or while serving in the military
Military service or war
If an agent commingled $500 of premiums collected with new applications with his personal funds what can he be found guilty of
Misdemeanor
Are employer contributions tax deductible in tax qualified annuities
No
Can a CEO of a private cooperation use a 403(b) plan for their retirement
No
Can dividends be guaranteed
No
Do employees receive a tax deduction for any contributions made to a non qualified plan
No
Does a $100,000 20 year level term policy's cash value equal $100,000 at the end of 20 years
No
Does a non qualified plan need IRS approval
No
Does the seller have to be terminally ill in a life settlement plan
No
Is a life insurance illustration required to be part of the contract
No
Is a producer responsible for issuing the policy that is requested
No
Is the application given to a prospective insured part of the consideration
No
Would someone who works 400 hours per year qualify for a Keogh Plan
No
Ifyou suggest negotiations in settling the claim, is it an example of unfair claims settlement
No, you can negotiate
What term describes the benefits of a life insurance policy that the policyowner doesn't automatically relinquish even if the policy lapses
Non forfeiture values
What is the official name of the social security program
Old age survivors disability insurance
What is the definition of a unilateral contract
One sided only one party makes an enforceable promise
Where is the policy loan option found
Only in policies that contain cash value
Which option for universal life allows the beneficiary to collect both the death benefit and cash value upon the death of insured
Option B
A rider started to a life insurance policy that provides coverage on the insured family members is called the
Other insured rider
An insured has a life policy from a participating company and recurved quarterly dividends. He instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen Is...
Paid up additions
Which option is getting utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends plus interest and the policy cash bale to pay the policy up early
Paid up option
Another term for the accumulation period of an annuity
Pay in period
A prospective insured receives a conditional receipt but dies before the policy is issued, the insurer will....
Pay the policy proceeds only if it would have issued the policy
What slows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become
Payor benefit
Illustration refers to
Presentation of non guaranteed elements of a policy
When an employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized
Profit sharing plan
Taxation on accumulation is deferred in what two types of plans
Qualified and non qualified retirement plans
Another babe for sub standard rush
Rated
What non forfeiture option provides coverage for longest period of time
Reduced paid up
What option allows someone to use dividends to help pay for their next premium
Reduction of premium
What option would allow someone to use dividends to help pay for their next premium
Reduction of premium
Part 2 of the application contains questions about what
Regarding applicants health history
Part 1 of the application contains questions about what
Regarding current coverage being applied for as well as any other insurance coverage with the same or other insurers
The federal fair credit reporting act:
Regulate consumer reports
The consumer challenges the accuracy of the info contained in their report, the reporting agency must
Respond to the consumer complaint
When an insured dies, the designated beneficiary received the face amount of the policy as well as a refund of all premiums paid. Which rider is attached to the policy
Return of premium
The spouse term rider policy is usually what
Rider is usually level term insurance
Insurance is the transfer of
Risk
A domestic insurer issuing variable contracts must establish one or more....
Separated accounts
Methods used to pay the death benefits to beneficiary upon insurers
Settlement options
Upon policy delivery. What can't the producer obtain
Signed waiver of premium
Two term associated directly with the way an annuity is funded
Single payment or periodic payments
What determines the length of time that benefits will be received under the fixed amount settlement option
Size of each installment
Risky that is representative of the majority of people
Standard risk
Policy that charges a level annual premium throughout the insureds lifetime and provide a level guaranteed death benefit
Straight life
Insurance that helps a married couple determine financial needs of their children in the event one or both should die prematurely
Survivor protection
Funds in a qualified plan accumulate on what
Tax deferred basis
Children's riders attached to whole life policies are usually issued as what type of insurance
Term
Who assumed the risks on investment in variable annuities
The annuitant
If a policy has an automatic premium loan provision, what happens if the insured stores before is paid back
The balance of will be taken out of the death benefit
Who is responsible for determining whether an ad might mislead or deceive a person of average education and intelligence
The commissioner
Who owns the policy of an executive bonus
The employee
Who owns the policy when an executive bonus is included
The employee
Premiums are determined by the age, sex and occupation of whom in group life insurance
The entire group
What protects consumers against the circulation of inaccurate or obsolete personal or financial info
The fair credit reporting act
Who bears all of the investment risk in a fixed annuity
The insurance company
If the insured and primary beneficiary died in the same car accident and we don't know who died first, who would receive the death benefit
The insured contingent beneficiary
When group coverage is covered to an individual policy, who determines the type of coverage
The insurer
Who sets premium rates based upon underwriting considerations
The insurer
In a life settlement contract, whom does the life settlement broker represent
The owner
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
Under an extended term non forfeiture option, the cash value is converted to...
The same face amount as in the whole life policy
Are employer contributions not tax deductible in tax qualified annuities
They are not
What is true for both equity indexed annuities and fixed annuities
They have a guaranteed minimum interest rate
What is the best reason to purchase life insurance rather than annuities
To create an estate
What is the purpose of establishing the target premium for a universal life policy
To keep the policy in force
The paid up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy
The paid up additions option uses the dividend to do what
To purchase a smaller amount of the same type of insurance as the original policy
(T/F) beneficiaries do not have to have insurable interest in the policy holder
True
When only one party is legally bound to anything
Unilateral
Contract where the insured isn't legally bound to do anything but the insurer must post losses covered by the policy
Unilateral contract
Type of insurance policy that shows policyowner to pay more or less than the planned premium
Universal life
What type of policy allows the policyowner to skip premiums provided there is enough cash value in the policy to cover the premium
Universal life
Which type of life insurance policy allowed the policyowner to pay more than the planned premium
Universal life
In a survivorship life policy, when does the insurer pay the death benefit
Upon last death
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called:
Waiver of premium
Statement that is guaranteed to be true but if untrue it may break an insurance contract
Warranty
In forming an insurance contract, when does acceptance occur
When An insurers underwriter approves coverage
When would a 20-pay whole life policy endow
When insured reaches age 100
When does the triple indemnity accidental death rider get 3x the face amount of plocuy
When the insured dies as as result of an accident
What type of insurance policies would perform the function of cash accumulation
Whole life
What type of insurance policy would perform the function of cash accumulation
Whole life
How are buy-sell agreements funded
With a life insurance policy
Does a qualified plan have a tax benefit of both employer and employee?
Yes
If the interest in the accumulation at interest option taxable
Yes
In the cash surrender non forfeiture option, are funds exceeding the premium paid taxable as ordinary income
Yes
Is annually renewable term insurance also level term insurance
Yes
Is the policyowner entitled to policy loans in a whole life pilicy
Yes
Is the policyowner entitled to policy loans in a whole life policy
Yes
Would the face of the term policy be the same as the face amount provided under the whole life policy
Yes