stimulate your exam
in addition to any applicable denial, suspension, probation, or revocation of a license, a person who violates the insurance producers licensing act may receive a fine of up to
1,000
an individual purchased a 100,000 joint life policy on himself and his wife. eight years later he died in an automobileaccident how much will his wife get from policy
100,000
to appoint an insurance producer as its agent, the appointing insurer must file a notice of appointment within how many days from the date of the first insurance application submitted to the agent
15 days
if an insurer willfully engages in an unfair trade practice the director may issue a cease and desist order and impose a maximum fine of
15,000 per violation
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
what is the waiting period on a waiver ofpremium rider in life insurance policies
6 months
if a telemarketer wants to make an unsolicited sales call to a potential customer, what is the earliest time the telemarketer can call the prospects residence
8 am
during the accumulation period in a nonqualified annuity, what are the tax consequences of a withdrawal
Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 1/2
according to the entire contract provision a policy must contain
a copy of the original application for insurance
all of the following could own group life insurance except
a group needing low-cost life insurance
the two types of assignment are
absolute and collateral
what documentation grants express authority to an agent
agents contract with the principle
in insurance, an offer is usually made when
an applicant submits an application to the insurer
the current interest rate on an equity indexed annuity is often based on
an index like standard & Poor's 500
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 applicants
ancestry
the death protection component of universal life insurance is always
annually renewable term
in an annuity, the accumulated money is converted into a stream of income during which time period
annuitization period
which of the following is not true of section 1035 policy exchange
any exchange made under section 1035 of the internal revenue code must be completed within 30 days
because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer, what type of agent authority does this describe?
apparent
which of the following types of agent authority is also called percieved authority
apparent
if during the underwriting process an insurer obtains personal information about an applicant from the applicant, when must the insurer provide notice of its information practices
at the time of policy delivery
which of the following is true about a class designation
beneficiaries are not identified by name
all of the following information about a customer must be used in determining annuity suitability except
beneficiary age
which of the following best describes fixed-period settlement option
both the principal and interest will be liquidated over a selected period of time
all of the following are personal uses of life insurance except
buy-sell agreement
which of the following statements concerning buy sell agreements is true
buy-sell agreements are normally funded with a life insurance policy
which provision of a life insurance policy states the insurers duty to pay benefits upon the death of the insured, and to whom the benefits will be paid
insuring clause
what is the benefit of choosing extended term as a nonforfeiture option
it has the highest amount of insurance protection
which of the following is correct regarding credit life insurance
it insures the life of a debtor
if a deferred annuity is surrendered prematurely, a surrender charge is imposed. how is the surrender charge determined
it is a percentage of the cash value and decreases over time
what is the purpose of a conditional reciept
it is intended to provide coverage on a date prior to the policy issue
which of the following is true regarding a single life settlement option?
it provides income the benficiary cannot outlive
which of the following statements about the reinstatement provision is true.
it requires the policyowner to pay all overdue premiums with interest before the policy is reinstated
in the underwritting process, it was determined that the applicant for life insurance is in poor health and has some dangerous habits. which of the following is true concerning the policy premium
it will likely be higher because the applicant is substandard risk.
the premium of a survivorship life policy compared with that of a joint life policy would be
lower
before making a recommendation regarding an annuity transaction , a producer must obtain all of the following information about consumer except
marital status
which of the following information about the applicant is not included in the general information section of the application for insurance
medical background
which part of an insurance application would contain information regarding the cause of death of the applicants deceased relatives
medical information
a rider attached to a life insurance policy that provides coverage on the insureds family members is called the
other-insured rider
when calculating the amount a policyowner may borrow from a variable life policy, what must be subtracted from the policys cash value
outstanding loans and interest
which of the following is true regarding a market value adjusted annuity
owner is guaranteed a fixed interest rate for a specified period of time
who might receive dividends from a mutual insurer
policyholders
all of the following are characteristics of group life insurance except
premiums are determined by the age, sex, and occupation of each individual certificate holder
an insurer wants to obtain information from investigators regarding an applicant for insurance. what must the insurer do in order to legally acquire this information
present the insured with a disclosure authorization notice
which of the following represents an insurance company and must be appointed by the company they represent
producers
if a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept
reasonable expectations
which of the following insurance options would be considered a risk sharing arrangement
reciprocal
which nonforfeiture option provides coverage for the longest period of time
reduced paid up
which nonforfeiture option provides coverage for the longest period of time
reduced-paid up
an insured pays 1,200 anually for her life insurance premium. the insured applies this years 300 worth of accumulated dividends to the next years premium, thus reducint it to 900. what option does this describe
reduction of premium
the policyowner pays for her life insurance anually. until now, she has collected a nontaxable dividend check each year. she has decided that she would rather use the dividends to help pay for her next premium. what option would allow her to do this?
reduction of premium
an insured commited suicide one year after his life insurance policy was issued. the insurer will
refund the premiums paid
the ownership provision entitles the policyowner to do all of the following except
set premium rates
all of the following are considered unfair trade practices in the business of insurance except
sharing commissions
Which type of life insurance policy generates immediate cash value
single premium
an insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insureds age 100 is called
single premium whole life
which of the following policies would be classified as a traditional level premium contract
straight life
which of the following would help prevent a universal life policy from lapsing
target premium
during the accumulation period in a nonqualified annuity, what are the tax consequences of a withdrawal
taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 1/2
all of the following would be different between qualified and nonqualified retirement plans
taxation on accumulation
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 life insurance policy has an irrevocable benficiary designation,
the beneficiary can only be changed with written permission of the beneficiary
the annuitant dies while the annuity is still in the accumulation stage which of the following is true
the beneficiary will recieve the greater of the money paid into the annuity or the cash value
a corporation is the owner and beneficiary of the key person life policy. if the corporation collects the policy benefit, then
the benefit is received tax free
which of the following statements about group life is correct
the cost of coverage is based on the ratio of men and women in the group
what determines the penalty for surrendering a market value adjusted annuity prematurely
the current interest rate at the time of surrender
in comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports
the customers associates, friends, and neighbors provide the reports data
which of the following is true regarding a market value adjusted annuity
the owner is guaranteed a fixed interest rate for a specific period of time
all of the following are true of an annuity owner except
the owner must be the party to recieve benefits
all of the following statements are true regarding installments for a fixed amount except
the payments will stop when the annuitant dies
a group of 15 skydivers met at a seminar and began talking about life insurance during a break. because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why?
the purpose of the group was to purchase life insurance
under an extended term nonforfeiture option, the policy cash value is converted to
the same face amount as in the whole life policy
all of the following are true regarding the guaranteed insurability rider except
this rider is available to all insureds with no additional premium
which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated
those who have been insured under the plan for at least 5 years.
an insured owns a life insurance policy. to be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. there is a limit for a withdrawal and the insurer charges a fee. what type of policy does the insured most likely have
universal life
the waiver of cost of insurance rider is found in what type of insurance
universal life
which of the following would least likely beconsidered a legitimate need that would be paid by insurance proceeds
vacation travel expenses
which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase
withdrawn amounts are taxed on a last in, first out basis
federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce
without receiving written consent from an insurance regulatory authority
which of the following is not an example of a business use of life insurance
workers compensation
which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost
indemnity
which of the following would not be considered an exception to the national do not call list
calls based from outside of the united states
which of the following terms is used to describe the violation when someone impropery withholds, misappropriates or converts money belonging to another for ones personal use?
commingling
an insurer neglects to pay a legitimate claim that is covered under the terms of the policy. which of the following insurance principles has the insurer violated?
consideration
what happens when a policy is surrendered for its cash value
coverage ends and the policy cannot be reinstated
if an insured changes the premium payment mode from mothly to anually what happens to the total premium
decreases
when a producer was reviewing a potential customers coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. the producer could be found guilty of
defamation
which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance
defamation
an insurance company sells an insurance policy over the phone in response to a tv ad. which of the following best describes this act
direct response marketing
which of the following will not be considered unfair discrimination by insurers
discriminating in benefit coverage based on the insureds habits and lifestyle
which of the following is an example of an unfair claims settlement practice?
failure to promptly settle a claim when liability has been clearly established
circulating deceptive sales material to the public is what type of unfair trade practice
false adverstising
which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization
fraternal benefit society
the automatic premium loan provision is activated at the end of the
grace period
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 raider waive the payment of premium
if the father is disabled for more than 6 months
annually renewable term policies provide a level death benefit for a premium that
increases annually
what type of insurance would be used for a return of premium rider
increasing term
which statement regarding insurable risks is not correct
insureds cannot be randomly selected