Xoa's Life Insurance Practice exam

what is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2500

an annuity contract is issued to a senior consumer over age 65. what is the maximum surrender charge for a withdrawal of money allowed in this annuity?

10%

which of the following best describes the MIB?

it is a nonprofit organization that maintains underwriting info on applications for life and health insurance

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

The Office of Insurance Regulations is responsible for all of the following insurer activities except:

Issue of securities - the office of financial regulation: responsbile of all activities of the financial servicies commission relating to the regulation of banks, credit unions, financial companies and securites industry, the office of insurance regulation is responsible for: policy forms, premium financing, viatical settlements

which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up - provides protection until the insured reaches 100, but the face amount is reduced to what the cash would buy

The Federal Fair Credit Reporting Act

Regulates consumer reports - the federal fair credit reporting act is also known as consumer investigative reports, or credit reports

what is reinsurance?

an agreement between a ceding insurer and assuming insuruer - the originating company that procures insurance on itself in another insurer is called ceding insurer. the other insurer is called the assuming insurer.

which of the following will NOT be considered unfair discrimination by insurers?

discrimination in benefits and coverage based on the insured's habits and lifestyles

all of the following could be considered rebated if offered to an insured in the sale of insurance EXCEPT

dividend from a mutual insurer - dividend paid to a policy of a mutual insurer are not considered to be. rebate because the policy specifies that they might be paid

an insured purchased a life policy in 2021 and died in 2020. The insurance company discovers at that time the insured had misstated info about her insurance history on app. What will the insurer do?

pay the death benefit - the incontestability clause prevent an insurer from denying a claim due to statemtns in an app after the policy has been in force for 2 years, even on the basis of material misstatement of facts or concealment of a material fact

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

purchase a single premium policy for a reduced face amount

An insured committed suicide 6 months after the life insurance policy was issued. The insurer will:

refund the premiums paid

the clause that protects the proceeds of a life insurance policy from creditors after death of the insured is known as the

spendthrift clause

The premiums paid by the employer in a business life insurance are

tax deductible by the employer as a business expense

an employer offers group life insurance to its employees for the amount of $10,000. which of the following is true?

the cost of coverage is a deductive expense by the employer - the cost of coverage paid by the employer in excess of $50,000 is taxed to the employee

what is the purpose of a disclosure statement in life insurance policy?

to explain feature and benefits of a proposed policy to the consumer - help the applicants to make more informed and educated decisions about their choice of insurance

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

beneficiary's age - to ensure suitability of annuity products, producers must obtain relevant information about the consumer's age, income, financial status, tax status, financial experiences and objective. beneficiary's age is not a suitability factor

All of the following are dividend options EXCEPT:

Fixed period installments dividend options are: accumulated at interest, reduction of premium, paid-up additions ** fixed period installments is a settlement option

how often must domestic insurance companies be examined by the CFO in Florida

at least every 5 years - or as frequently as determined by the CFO

An insurance contract must contain all of the following to be considered legally binding EXCEPT

beneficiary's consent - four essential elements of all legal contracts are: offer & acceptance, consideration, competent parties, legal purpose,

two individuals are in the same risk and age class, yet, they are charged different rates for their insurance policies due to an insignificant factor . what is this called?

discrimination

twin brothers, similar lifestyle, but one in stronger financial position, the company charges him a higher rate for his insurance. this practice is considered?

discrimination -

in which of the following situations is it legal to limit coverage based on marital status?

it is never legal to limit coverage based on marital status - insurance benefits or coverage may not be denied based on sex or marital status. marital status may be considered for the purpose of defining persons eligible for dependent benefits

which statement is NOT true regarding a policy summary?

it must be combined with a sales illustration - the policy summary must be a separate document. it cannot be combined with a sales illustration

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

it would not occur in a deferred annuity - the accumulation period is the period of time over which the annuity owner makes payemnts into an annuity. this is the period of time during which payments earn interest and grow tax deffered.

when replacing life insurance, the duties of the replacing insurance company include all of the following EXCEPT:

maintaining a copy of the notice regarding replacement and all sales proposed used for at least 5 years - it is 3 years or until the conclusion of the nest regular audit by the insurance department, whichever is later

all of the following are true of the federal tax advantages of a qualified plan EXCEPT:

At distribution, all amounts received by the employee are tax free - fudns in a qualified plan accumulate on a tax-deferred basis; however, at distribution any amount received by the employee will be treated as ordinary income for tax purposes.

Which of the following authorities grants and revokes licenses?

Department of Financial service - issues, reissues and terminates licenses

examples of rebates are

offer of employment stocks, securities or bonds an offer to share in the commissions generated by the sale

A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. she also wished to retain all of the rights of the owners policyowner should have had her husband named as the

revocable beneficiary

Which of the following determines the length of time the benefits will be received under the Fixed-Amount settlement options

size of each installment - larger installments translate into shorter benefits periods

In comparison to consumers reports, which of the the following describes a unique chracteristic of investigative consumer reports?

the customer's associates, friedns, and neighbors provide the report's data

An employee in insured under the employer's group life plan. if she terminates her group coverage, which of the following statements in INCORRECT

the insured may choose to convert to term or permanent coverage. - the insurer will determine the type of coverage which is usually PERMANENT COVERAGE

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant

with the policy - if it doesn't, the buyer's guide must be delivered prior to accepting the initial premium