STUDY GUIDE FOR NYS LIFE INSURANCE AGENT EXAM 17-51 (ADD ONTO)

all of the following information about a customer must be used in determining annuity suitability EXCEPT

Beneficiarys age

What is the purpose of a free-look period in insurance policies?

It allows the insured to reject the policy with a full refund.

When a reduced paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium.

Statements made by an applicant for a life insurance policy which are true to the best of one's knowledge are referred to as

Representations

Which of the following is true about warranties?

They are guaranteed to be true.

Which of the following is NOT true regarding Equity Indexed Annuities?

They earn lower interest rates than fixed annuities.

when would a 20 pay whole life policy endow

When the insured reaches age 100

solvency

ability to meet financial obligations (an insurance company maintain enough assets to pay claims)

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

cash option

life insurance

coverage on human lives

any form of life insurance may be used to...

fund a buy sell agreement

illustrations

presentation or depiction of nonguaranteed elements of a life insurance policy

Items stipulated in the contract that the insurer will not provide coverage for are found in the

exclusions clause

two componenets of universal policy

insurance and cash account

which of the following statements regarding hiv testing for life insurance purposes is NOT true?

insurers are barred from requesting HIV testing

during partial withdrawal from a universal life policy which portion will be taxed?

interest

the mode of premium payment

is defined as the frequency and the amount of the premium payment

what is the purpose of a conditional receipt?

is it intended to provide coverage on a date prior to the policy issue

Which of the following is true regarding the spendthrift clause in life insurance policies?

it can protect the policy proceeds from the creditors of the beneficiary

which of the following is not a type of whole life insurance

level term

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?

policy will terminate when loan amt with interest = or exceeds cash value

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

policyowner

death benefit

the amount paid upon the death of the insured in a life insurance policy

if a life insurance policy has an irrevocable beneficiary designation

The beneficiary can only be changed with written permission of the beneficiary.

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen

The policy will terminate when the loan amount with interest equals or exceeds the cash value.

when j applied for a life insurance policy, the agent informed him that a medical exam would be required, exam may be completed by

a paramedic or examining physician at the insurer's expense

minor

a person under legal age

cash value

equitity amount accumulated in permanent life insurance

which of the following is not required on an illustration used in the sale of a life insurance policy?

the name of the primary and secondary beneficiaries

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

the og age is used for premium determination

insurable interest must exist at..

the time of application

which of the following is the basic source of information used by the company in the risk selection process?

application

what is the time period called during which the surviving spouse of the insured does not receive social security income benefits?

blackout period

which statement is not true regarding a straight life policy?

its premium steadily decreases over time in response to its growing cash value

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

which of the following best describes annually renweable term insurance

level term insurance

your client wants both protection and savings from the insurance and is willing to pay premiums until retirement at. age 65 what would be the right policy for this client

limited pay whole life

What is the other term for the cash payment settlement option?

lump sum

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

medical information

part 2 of the application for life insurance provides questions regarding all of the following EXCEPT

other insurance coverages

pt 2 of the application for life insurance provides questions regarding all of the following except

other insurance coverages

A rider attached to a life insurance policy that provides coverage on the insured's 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 policy's cash value?

outstanding loans and interest

Which of the following explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy?

owners rights

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

lump sum

payment of the entire benefit in one sum

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT

payments will stop when the annuitant dies

an applicant wants to buy a policy that has a cash value element, which type should she buy

permanent (provides lifetime death protection)

What describes the specific information about a policy

policy summary

another name for a substandard risk classification is

rated

An insured committed suicide one year after his life insurance policy was issued. The insurer will

refund premiums paid

A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the

revocable beneficiary

liquidation

selling assets in order to raise capital

The Ownership provision entitles the policyowner to do all of the following EXCEPT

set premium rates

all of the following are beneficary designations except

specified

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

The interest earned on policy dividends is

taxable

adverse selection

tendency of individuals with higher probability of loss to purchase insurance more often than those who present a lower risk

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 entity determines the amount of accelerated death benefits that will be paid to an insured?

the insurer

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

how must a replacing producer respond to an applicant wishing to replace existing life insurance?

the producer must provide the applicant with a notice regarding replacement

Which of the following is NOT true regarding Equity Indexed Annuities?

they earn lower interest rates than fixed annutities

which of the following is the best reason to purchase life insurance rather than an annuity

to create an estate

The Waiver of Cost of Insurance rider is found in what type of insurance?

universal life

in a suvivorship life policy when does the insurer pay the death benifit

upon the last death

which is not part of consent form to HIV related test given in NY

applicants sexual history

all of the following could own group life insurance except

a group needing low cost life insurance

straight life policy has what type of premium?

a level annual premium for the life of the insured

estate

a person's net worth

The initial amount of credit life insurance may NOT exceed

amount to be repaid under the contract

which of the following applicants could the insurer charge a higher rate of premium and not violate regulations regarding unfair discrimination?

an applicant who is a smoker

the least expensive first year premium is found in which of the following policies

annually renewable term

When an annuity is written, whose life expectancy is taken into account?

annuitant

Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?

annuity certain

what does liquidity refer to in a life insurance policy?

cash values can be borrowed at any time

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

common disaster clause

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

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

a key person insurance policy can pay for which of the following

costs a training a replacement

which of the following is not allowed in credit life insurance

creditor requiring that a debtor buys insurance from a certain insurer

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?

death benefit will be smaller

which of the following is not typically excluded from life policies

death due to plane crash for a fare paying passenger

if an insured changes the premium payment mode from monthly to annually, what happens to total premium?

decreases

An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it?

deferred

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

equal to the original policy for as long as the cash values will purchase

Which is TRUE about the cash surrender nonforfeiture option?

funds exceeding premium paid are taxable as ordinary income

What provision in an insurance policy extends coverage beyond the premium due date?

grace period

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

guaranteed insurability rider

According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following

guaranteed surrender value

anually renweable term policies provide a level desth beenfit for a premium that

increases anually

what type of insurance would be used for a return of premium rider

increasing term

Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?

installments for a fixed period

policyowner must have..

insurable interest in the life of the insured