Test
A Universal Life Insurance policy is best described as a/an a)Annually Renewable Term policy with a cash value account .b)Variable Life with a cash value account. c)Whole Life policy with two premiums: target and minimum. d)Flexible Premium Variable Life policy.
A
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an a)Interest-sensitive Whole Life. b)Credit Life. c)Annual Renewable Term. d) Adjustable Life
A
The premium of a survivorship life policy compared with that of a joint life policy would be a)Lower. b)Higher. c)As high d)Half the amount.
A
The two types of assignments are a)Absolute and collateral. b) Absolute and partial c)Complete and partial. d)Complete and proportionate.
A
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die? a)Joint Life b)Decreasing Term c)Whole Life d)Ordinary Life
A
What is another name for interest-sensitive whole life insurance? a)Current assumption life b) Variable Life c)Term life d)Adjustable life
A
When a licensee is accused of any act, omission, or misconduct that would subject the licensee to a license suspension or revocation, with the approval of the Commissioner, the license may be surrendered for a period of a)Time to be set by the Commissioner. b)90 days. c)6 months. d)1 year.
A
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy? a)It is reduced to the amount of what the cash value would buy as a single premium. b)It is increased when extra premiums are paid. c)It decreases over the term of the policy. d)It remains the same as the original policy, regardless of any differences in value.
A
Which is TRUE about the cash surrender nonforfeiture option? a)Funds exceeding the premium paid are taxable as ordinary income. b)After the cash surrender, the insured is covered for a grace period of one month. c)The policy remains active for some time after the policyholder opts for cash surrender. d)The policyholder receives the original cash value of the policy.
A
Which of the following is NOT true regarding Equity Indexed Annuities? a)They earn lower interest rates than fixed annuities. b)The insurance company keeps a percentage of the returns. c)They have guaranteed minimum interest rates. d)They are less risky than variable annuities.
A
Which of the following is TRUE about a class designation? a)Beneficiaries are not identified by name. b)Beneficiaries must be part of the insured's immediate family. c)It is not allowed. d)It determines the succession of beneficiaries.
A
Which of the following is a short-term annuity that limits the amounts paid to a certain fixed period or until a certain fixed amount is liquidated?a)Annuity certain b)Fixed annuity c)Refund life d)Variable annuity
A
Which of the following products requires a securities license? a)Variable annuity b)Fixed annuity c)Equity Indexed annuity d)Deferred annuity
A
Which of the following products requires a securities license?a)Variable annuity b)Fixed annuity c)Equity Indexed annuity d)Deferred annuity
A
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? a)Automatic premium loan b)Extended term c)Reinstatement d)Reduced paid-up option
A
A Universal Life Insurance policy is best described as a/an a)Flexible Premium Variable Life policy .b)Annually Renewable Term policy with a cash value account. c)Variable Life with a cash value account. d)Whole Life policy with two premiums: target and minimum.
B
A legally acceptable attempt by an existing insurer to dissuade a current policyowner from the replacement of existing life insurance is called a)Retention. b)Conservation. c)Solicitation. d)Rebating.
B
A private investigator has been hired by an insurance company to obtain a character report on an insurance applicant. The investigator contacts the applicant and requests an interview stating that he is conducting a research for a publication. The applicant permits the interview and unknowingly gives information that will be used in the underwriting decision. Which of the following does this scenario describe? a)Misrepresentation b)Pretext interview c)Investigative consumer report d)Insurance information investigation
B
All of the following statements concerning dividends are true EXCEPT a)Favorable investment results generate higher dividends. b)Dividend amounts are guaranteed in the policy. c)Lower insurance company costs generate higher dividends. d)They stem from favorable underwriting experience.
B
An agent is completing an application of insurance for a client. The agent is required to provide the client e a "notice of information practices" at all of the following times EXCEPT a)When personal information is collected from another source other than the applicants. b)No notice is ever required at the initial completion of the application. c)At the policy renewal date. d)At the time of policy delivery.
B
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? a)One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies. b)The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. c)The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time. d)The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies.
B
If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this? a)Single premium policy b)Jumping juvenile policy c)Limited pay whole life policy d) Modified life insurance policy
B
The death protection component of Universal Life Insurance is always a)Decreasing Term b)Annually Renewable Term c)Whole Life d)Adjustable Life
B
Which nonforfeiture option provides coverage for the longest period of time? a)Accumulated at interest b)Reduced paid-up c)Extended term d)Paid-up option
B
Which of the following is used to determine interest rates on variable products? a)Cash value b)Interest rate index c)Consumer price index d)Annual average rate
B
Which two terms are associated directly with the way an annuity is funded? a)Renewable or convertible b)Single payment or periodic payments c)Increasing or decreasing d)Immediate or deferred
B
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy? a)$0 b)$200 c)$9,800 d)$10,000
C
B just bought a new car, which he anticipates will be paid for 4 years from now. He also wants to buy a life insurance policy, but is financially limited until the car is paid off. Which of the following types of policies would be best for B? a)Limited Pay b)Interest-sensitive Whole Life c)Modified Life d)Limited Term
C
If an insured continually uses the automatic premium loan option to pay the policy premium, a)The cash value will continue to increase. b)The insurer will increase the premium amount. c)The policy will terminate when the cash value is reduced to nothing. d)The face amount of the policy will be reduced by the automatic premium loan amount.
C
Under the L&H Guaranty Association, the maximum benefit one contract holder may receive in benefits, regardless of the number of contracts held, is a) $300,000 b)$1,000,000 c)$5,000,000 d)$100,000
C
What is another name for interest-sensitive whole life insurance? a)Term life b)Adjustable life c)Current assumption life d)Variable life
C
When would a 20-pay whole life policy endow? a)After 20 payments b)In 20 years c)When the insured reaches age 100 d)At the insured's age 65
C
Which of the following is NOT one of the required qualifications for licensing as an insurance agent in this state? a)Prelicensing education requirement b)Minimum competency c)Experience in the insurance industry d)Minimum age
C
Which of the following is NOT true regarding policy loans? a)An insurer can charge interest on outstanding policy loans. b)A policy loan may be repaid after the policy is surrendered. c)Money borrowed from the cash value is taxable. d)Policy loans can be repaid at death.
C
Which of the following is an eligibility requirement for all Social Security Disability Income benefits? a)Have permanent kidney failure b)Be at least age 50 c)Have attained fully insured status d)Be disabled for at least 1 year
C
Which of the following must an insurer obtain in order to transact insurance within a given state? a)Business entity license b)Insurer's license c)Certificate of authority d)Producer's certificate
C
Which of the following riders would NOT cause the Death Benefit to increase? a)Cost of Living Rider b)Accidental Death Rider c)Payor Benefit Rider d)Guaranteed Insurability Rider
C
Which of the following terms is used to describe a person, other than a viator, that enters into or effectuates a viatical settlement contract? a)Viatical settlement broker b)Viatical settlement effectuator c)Viatical settlement provider d)Viatical settlement purchaser
C
An agent selling variable annuities must be registered with a)FINRA. b)Department of Insurance. c)The Guaranty Association. d)SEC.
D
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?a)401(k) plan b)Tax-sheltered account plan c)HR 10 plan d)Profit sharing plan
D
During replacement of life insurance, a replacing insurer must do which of the following? a)Guarantee a replacement for each existing policy b)Designate a new producer for a replaced policy c)Send a copy of the Notice Regarding Replacement to the Department of Insurance d)Obtain a list of all life insurance policies that will be replaced
D
What does the Guaranty Association guard against? a) Insurance fraud b) Double indemnity c) Rebating d) Insurer insolvency
D
When must insurable interest exist in a life insurance policy? a)At the time of policy delivery b)When there is a change of the beneficiary c)At the time of loss d)At the time of application
D
