Pre-study assessment exam life

A guaranteed insurability rider offers the insured the the option to purchase additional life insurance at

3-year intervals

Which of the following allows employees to elect to reduce their current salaries by deferring amounts into a retirement plan?

401K

Suitability is...

obtaining information from the applicant to determine whether an insurance or annuity product is appropriate

All of the following statements regarding policy dividends are true EXCEPT

they are likely to be larger in nonparticipating policies

FINRA regulates

variable insurance policies

Jeremy has an insurance company logo on his car and hands out bottle of water, shirts, and hats with the insurer's logo at local events. Based on Jeremy's actions, this is an example of

Apparent authority

Insurable interest in a life policy must exist

At the time the policy is written but not at the time of death

When underwriting a life policy, which industry source of medical information about a proposed insured do insurers often use?

Medical Information Bureau

Which of the following is NOT an agent responsibility?

Prepaying the initial premium

Which of the following is NOT true regarding reinstatement of a life insurance policy?

Upon reinstatement, the beneficiary will become irrevocable

Which of the following types of life insurance policies was designed to combine the protection features of traditional life insurance with the cash value growth potential of securities?

Variable life policy

Lee wants to make sure that his life policy stays in force in the event he is permanently and totally disabled and unable to make premium payments. What rider should Lee purchase?

Waiver of premium rider

An additional insured rider provides term insurance for

a spouse or immediate family member

A voluntary relinquishment of a known right is called

a waiver

The penalty for early withdrawals from an IRA or other qualified retirement plan is

10% of the amount withdrawn

Jill is interested in buying annuity, but is not sire how she wants to fund it or when she wants to start receiving annuity payments. Which of the following is NOT available under any circumstances?

A periodic premium immediate annuity

What is the definition of a fiduciary?

A person in a position of trust and confidence who handles the affairs and funds of others.

Transferring total ownership of a life insurance policy may be accomplished in which of the following ways?

Absolute agreement

Which of the following situations describes an instance of unfair discrimination?

An insurer refuses to issue a policy to a male applicant who works in the theater industry because he is assumed to be at higher risk for HIV.

Marco does not indicate a specific settlement option with his life insurance policy. How will the death benefits be distributed to Anita, his beneficiary?

Anita will receive the benefits in a lump sum.

Long Life Insurance Company insures substandard risks. Which of the following approaches will it use to compensate for the high death rates it expects?

Charge increased premiums for substandard risks

which of the following statements about contributions to a qualified plan is CORRECT?

Employers have the option of creating vesting schedules for benefits

Which of the following is not dividend option on a whole life insurance?

Extended term insurance

If an insurer promotes an insurance product it does not or will not sell, this is known as

False advertising

Which of the following is NOT an element used to calculate life insurance premiums?

Financing

Which of the following is the settlement option of a life policy that provides periodic payments of a specified amount as long as the proceeds plus interest last?

Fixed-amount settlement option

Which of the following terms describes an insurance company that has been organized in any state other than the state of its home office?

Foreign

An insured returned policy one week after it was issued and receives a full refund or premium paid. What provision did the insured use?

Free look

Which provision includes the insurance company's promise to pay the claim?

Insuring agreement

If the policyowner must first get permission from the beneficiary before being able to change the beneficiary, what type of beneficiary does this policy have?

Irrevocable

What is the usual federal income tax treatment of individual life insurance?

Mon-deductibility of premiums, non-taxable death benefits

Which standard nonforfeiture option would use a whole life policy's surrender value to purchase a paid-up policy with a smaller face amount of insurance than the original policy?

Reduced paid-up insurance

Who is responsible for examining an insurer's financial books and records?

State departments of insurance

Which of the following individuals does NOT have to sign an application for a life insurance policy?

The beneficiary

A policyowner stops making payments on a 20-pay whole life policy after only 15 years, choosing instead to convert the policy to extended term insurance. Which of the following statements is NOT correct?

The extended term policy will have the same cash value as the original policy.

Concerning a group life insurance policy, the person responsible for applying for the policy, maintaining the policy, and paying the premium is known as which of the following?

The master policyowner

Which of the following is a term life insurance policy?

The policy has a face amount of $100,000, every 5 years the premium increases, and at the end of 20 years the policy terminates with no cash value.

Daniel, the insured under a $100,000 life insurance policy, dies during the grace period. What would happen if the premium on the policy had NOT been paid?

The unpaid premium would be deducted from death benefit paid to beneficiary.

A required minimum distribution (RMD) is required for which of the following products?

Traditional IRA's

Which type of life insurance policy allows the policyowner the ability to increase or decrease the death benefit, enjoy flexible premiums, and take withdrawals and loans against the cash value account?

Universal life policy

Which of the following affects the deductibility of contributions made to a traditional IRA?

Whether or not the IRA owner participates in a qualified employer plan

An insurer's license to transact insurance business in the state is called

a certificate of authority

An employee's coverage under a group term life insurance policy is evidenced through

a certificate of insurance

All of the following statements regarding specialized forms of life insurance are correct EXCEPT

a joint life insurance policy is a form of term life insurance that covers 2 individuals and pays the death benefit when the first insured dies.

The 2 major phases of an annuity are

accumulation and annuitization

All of the following statements are true regarding modified endowment contracts (MECs) EXCEPT

an MEC may be exchanged for another policy that is not an MEC

All of the following are factors used to determine the payout of an annuity EXCEPT

annuitant's state of residence

A licensed insurance producer that transacts business on behalf of an insurer must be

appointed by an insurer

To prevent the lapse of a whole life insurance policy at the end of the grace period, cash value will be used by the insurer to pay the premium. This is called

automatic premium loan

STOLI transactions are

banned in most states

Forcing a person to buy insurance through a particular company or producer is

coercion

An intentional failure to disclose known facts is

concealment

Which of the following riders keep pace with inflation?

cost of living rider

What type of annuity offers a guaranteed interest rate during accumulation and guaranteed payments after authorization?

fixed annuity

After a life insurance policy has been in effect for two years, the insurer is prevented from rescinding the contract. The policy has become

incontestable

Annual renewable term life insurance has which of the following characteristics?

level death benefit, increasing premiums

IRA funds may be invested in all of the following products EXCEPT

life insurance

A principal function of annuities is to

liquidate a principal sum

During the accumulation period, the owner

may make additional premium payments or deposits

With respect to a 10-year level term policy, all of the following statements are correct EXCEPT

premium payments increase gradually over the term

Most states have guaranty associations or guaranty pools. Their purpose is to

protect policy owners of insurers who have become insolvent.

Joe offers a pair of tickets to the sold-out basketball game in exchange for the person to purchase her insurance with him. This is known as

rebating

Misstatement of age in an insurance contract

results in the policy benefit being adjusted according to the correct age of the insured; it does not void the contract

To renew s producer's license, the producer must

satisfy the state's continuing education requirement.

Carol wants her annuity settlement to pay her highest monthly income amount. What payout option should she choose?

straight life option

Accelerated death benefits are

tax-exempt

The federal law requiring insurance companies to adopt and monitor anti-money laundering programs is

the USA PATRIOT Act

Don's whole life policy allows him to take a policy loan up the cash value of the policy. If Don dies before the policy loan has been repaid

the amount he borrowed plus interest chargers will be deducted from the policy's death benefit.

All of the following statements regarding converting from a group life insurance policy to an individual life insurance policy are true EXCEPT

the converted policy must be term insurance

Information about an applicant's character, general reputation, personal habits, and lifestyle would be included in

the investigative consumer report

A distinguishing feature of a stock insurer is that

the issued policies are called non-participating policies

All of the following requirements are necessary in order for a nonresident to be granted a nonresident insurance license EXCEPT

the licensing exam must be taken in both the producer's home state and nonresident state.

Using policy dividends to buy additional life insurance is called

the paid-up additions option

With a life insurance policy, insurable interest must exist between

the policyowner and insured

With conditional life insurance receipt, coverage may become effective as early as the date

the receipt is given to the applicant, if the applicant is approved as a standard risk