State License

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years.

Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level?

Bail-out

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

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

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT

Disputes regarding consumer report information.

Your client's employer does not offer a company-wide annuity contract. What type of annuity contract could your client obtain?

Individual

An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?

She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.

Which type of life insurance policy generates immediate cash value?

Single Premium

If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?

$3,000

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

Automatic premium loan

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children are added to the policy.

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report

When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments?

Spendthrift provision

When an individual purchases insurance, what risk management technique is he or she practicing?

Transfer

The mode of premium payment

Is defined as the frequency and the amount of the premium payment.

the National Do Not call Registry was created to regulate...

telemarketers

When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount

Equal to the original policy for as long a period of time that the cash values will purchase.

When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n)

Executive bonus

Which statement regarding insurable risks is NOT correct?

Insureds cannot be randomly selected.

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?

Joint life

All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?

Lower

Which of the following statements does NOT accurately describe an insurance broker?

None of the above. All are true. A broker is not a direct representative of an insurer. A broker cannot bind coverage. Brokers must have a written agreement with an insured when they receive any fees or compensation for services.

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

SEC registration

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association

J transferred his life insurance policy to his son two years before his death. Which of the following is true?

The entire face value of the policy will be included in J's taxable estate.

Which of the following are generally NOT considered when underwriting group insurance?

The insureds' medical history

An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?

When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health

A producer's license may be renewed every

2 years

How many hours of continuing education per licensing period must all licensees complete in order to renew their licenses?

24 hours

According to the telemarketing sales rules, what are the permissible calling hours for telemarketing calls?

8am until 9pm

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

Incontestability clause

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

Modified endowment contract.

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

Which of the following would NOT be a violation of state insurance regulations?

Producer C uses her license to write uncontrolled business only.

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

Settlement option

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination

All of the following statements are true regarding installments for a fixed amount EXCEPT

The payments will stop when the annuitant dies.

Which of the following statements is TRUE concerning irrevocable beneficiaries?

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

What was created to keep telemarketers from calling consumers who do not wish contacted?

National Do Not Call Registry

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A

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

Payor Benefit Rider

What does "liquidity" refer to in a life insurance policy?

Cash values can be borrowed at any time.

When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. This is an example of

Concealment

A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?

Cost of Living Rider

At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?

Adjustable Life

All admitted insurance companies in this state are subject to fiscal examinations by the Commissioner

At least every 5 years

The accelerated benefits provision will provide for an early payment of the death benefit when the insured...

Becomes terminally ill.

Which of the following would NOT be considered rebating or illegal inducement?

Giving an applicant a $100 gift certificate during the insurance application process

What is the advantage of having a qualified annuity?

Favorable tax treatment

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's

Ancestry.

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination

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

Which of the following statements about a suicide clause in a life insurance policy is TRUE?

Suicide is excluded for a specific period of years and covered thereafter