primerica

When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

. Fixed amount

Which of the following riders would NOT cause the Death Benefit to increase?

Payor Benefit Rider

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants.

Which nonforfeiture option has the highest amount of insurance protection?

extended term

A producer agent must do all of the following when delivering a new policy to the insured EXCEPT

Disclose commissions earned from the sale of the policy.

What is reinsurance?

An agreement between a ceding insurer an assuming insurer

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

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

A tax-sheltered annuity is a special tax-favored retirement plan available to

Certain groups of employees only.

.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?

The date of medical exam

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account.

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

misleading advertising

If a life insurance policy develops cash value faster than a seven-pay whole life contract, it becomes a/an

Modified endowment contract.

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?

The insured may renew the policy for another 10 years, but at a higher premium rate.

the company owes premium money to the insured. The insurer gave the funds to the producer to return to the insured. Within how many days must the producer pay the insured?

5 days

.An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Authorized insurer

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

Convertible Term Policy.

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

It would not occur in a deferred annuity.

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are

Not taxable since the IRS treats them as a return of a portion of the premium paid

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must

Respond to the consumer's complaint.

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will not be lost

Which of the following would be the beneficiary in credit life insurance?

creditor

What is the major difference between a stock company and a mutual company?

ownership

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

. Illegal under any circumstances

An insurer must keep all sales materials for at least how long?

5 years

What is a branch office?

An office in this state where the licensee conducts insurance business, other than a principal office

In which of the following instances would the premium be tax deductible?

Premiums paid by an employer on a $30,000 group term life insurance plan for employees

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

What type of insurance would be used for a Return of Premium rider?

increasing term

What do individuals use to transfer their risk of loss to a larger group?

insurance

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. Which settlement option should the policyowner choose?

interest only option

Your customer doesn't mind paying a higher premium as long as he gets a life insurance product that would allow for a faster growth of the cash value. What kind of policy would you recommend?

An endowment policy (Because the cash value in an endowment has to build up faster since the funds are intended to be used while the insured is alive, the premium for an endowment is considerably more expensive than an ordinary straight life policy.)

Which of the following would NOT be considered rebating?

Giving a client a $25 pen with the insurer's logo during the insurance application process

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

The insurer will pay the full death benefit from the group policy to the beneficiary.

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

decreasing term

A producer received a group master policy and certificates for delivery to the insured. Within how many days must the policy and certificates be delivered?

10 calendar days

An insurer is closing a branch office in this state. Within how many days of the office closing must the insurer notify the Department?

30 days

If an insured requires an application in order to reinstate a policy, and if the insured requests reinstatement in writing, an application must be delivered to the insured within

30 days

All of the following are duties and responsibilities of producers at the time of application EXCEPT

Change any incorrect statement on the application by personally initialing next to the corrected statement.

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.

.Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?

Return the application to the applicant for completion

Which type of beneficiary is changeable at any point?

Revocable

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

if the father is disabled for more than 6 months

The McCarran Act stated that the federal government would not regulate insurance as long as an adequate job of regulating the industry was done by the

states

An insurance producer refused to comply with a subpoena. What would be the producer's penalty for this violation?

$5,000 fine

The Commissioner believes that a licensee has violated an insurance regulation and decides to conduct a hearing. How long of a notice must the Commissioner provide the licensee?

10 days

If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to

Charge a higher premium.

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to

The contingent beneficiary.

What is the purpose of settlement options?

They determine how death proceeds will be paid.

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?

Third-party ownership

What is the purpose of the buyer's guide?

To allow the consumer to compare the costs of different policies

To be issued a business entity producer license by the Commissioner, the business entity must have how many partners or officers licensed as producers?

at least 1

Which of the following would NOT be considered an exception to the National Do Not Call List?

calls based outside the US

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

foreign

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 statements is TRUE about a policy assignment?

It transfers the ownership rights under the policy to the extent expressed in the assignment form

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of

twisting

Which is the primary source of information used for insurance underwriting?

application

Which of the following documents must be provided to the policyowner or applicant during policy replacement?

notice regarding replacement

Which of the following statements is TRUE concerning irrevocable beneficiaries?

They can be changed only with the written consent of that beneficiary.

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies.

If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?

The balance of the loan will be taken out of the death benefit.

If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT

Erase the incorrect answer and record the correct answer.

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

It will pay double or triple the face amount.

If the policyowner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights?

policy owner

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?

Any form of life insurance. Any form of Life insurance may be used to fund a buy-sell agreement.

Which of the following is NOT allowed in credit life insurance?

2. Creditor requiring that a debtor buys insurance from a certain insurer

How is an insurance consultant different from an insurance producer?

A consultant does not sell policies, but only offers advice.

Which of the following is true regarding license cancellation and reinstatement?

The license needs to be returned to the Insurance Department. It can be reinstated by filling out an application and paying a fee.

The Department can run a report on a specific producer that lists his or her license information, current license status, and the types of insurance that he or she can transact. What is the name of this report?

Certification of license status report

Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives?

medical information

What percentage of a company's employees must take part in a noncontributory group life plan?

100%

In choosing an insurance business name, which of the following would be allowed?

A proper name which does not belong to any officers, stockholders, or executives

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount

Which is TRUE about the cash surrender nonforfeiture option?

Funds exceeding the premium paid are taxable as ordinary income.

Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?

Standard risk is representative of the majority of people.

Which of the following types of insurance would be written by a limited lines agent?

credit insurance

The automatic premium loan provision is activated at the end of the

grace period

Which of the following policies would be classified as a traditional level premium contract?

straight life

Solicitation rules would apply to which of the following types of coverage?

whole Life