Exam 1

Credit Life Insurance

Insures the life of a debtor

which of the following is NOT true regrading the annuitant

The annuitant cannot be the same person a the annuity owner.

Implied

Which authority is NOT stated in an agents contract but is required for the agent to conduct business?

decreases

if an insured changes his payment plan from monthly to annually, what happens to the total premium

premium always remains level

in term policies, what happens to the premium throughout the term of the policy?

A domestic insurer issuing variable contracts must establish one or more

separate accounts

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. this is a personal use of life insurance known as

survivor protection

WHICH ENTITY DETERMINES THE AMOUNT OF ACCELERATED DEATH BENEFITS THAT WILL BE PAID TO AN INSURED

the insurer

To purchase a smaller amount of the same type of insurance as the original policy.

the paid up addition option uses the dividend

Revocable Beneficiary

the policyholder reserves the right to change the beneficiary designation without the beneficiary's consent

tax deductible

traditional IRA contributions are

the insurance company's general account

when a fixed annuity owner pays his/her insurance company a monthly annuity premium, where is this money placed?

the name of the primary and secondary beneficiary

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

It needs IRS approval

which of the following is NOT true regarding a non qualified retirement plan?

Business Continuation

Joe, Larry, and Curly on a own a small business. they have made a legal arrangement which states that if one of them dies or become disabled, the other two will be able to buy the partners shares. which term best describes this arrangement?

Level Term

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

issue the policy anyway and pay the face value to the beneficiary

When Y applied for insurance and paid the initial premium on August 14th, he was issued a conditional receipt. during the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22nd, before the policy was issued. in this case, the insurance company will

the premiums are lower

Which is generally true regarding insureds who have been classified as Preferred risks?

Reduced Paid-Up

Which non forfeiture option provides coverage for the longest period of time?

A minor son of the insured

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds death?

universal life

Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

The employer is the owner and beneficiary

Who is the owner and who is the beneficiary on a key person life insurance policy?

Pay the policy proceeds only if it would have issued the policy.

a prospective insured receives a conditional receipt but dies before the policy is issued. the insurer will

Avoidance

an individual was involved in a head on collision while driving home one day. his injuries were not serious, and he recovered. however, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. which method of risk management does this describe?

is from another state

the superintendent may refuse to issue a license in all of the following situations EXCEPT if the proposed licensee

someone who works more than 400 hours per year

which of the following applicants would NOT qualify for a Keogh Plan ?

the policy owner is entitled to the policy loans

which of the following statements is correct regarding a whole life policy?

Costs of training a replacement

A key person insurance policy can pay for which of the following?

lower

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

Refund the premiums paid

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

$50,000

An insured owns a $50,000 life policy. At age 47,the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

Cash option

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

It is used to lower premiums

An insurer invests the money it receives from premiums paid by its insureds. Which of the following is TRUE regarding the interest earned on these investments?

$8,000, 60 days

And employee quits her job where she has a balance of $10,000 in her qualified plan. The balance is paid out directly to the employee in order for her to move the funds to a new account. If she decides to roll over her plan to a traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax free-roll over?

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

Cash values can be borrowed at any time

which of the following best describes the aletory nature of insurance contract?

Exchange of unequal values

The rider is usually level term insurance

What is true about a spouse term rider?

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

which statement is not true regarding a Straight Life Policy?

Policyholder

who might receive dividends from a mutual insurer?

Annually Renewable Term

What type of life insurance is most commonly used for group plans?

5 days

If a consumer requests additional information concerning an Investigative Consumer Report, how long does the insurer or reporting agency have to comply?

the completed application is submitted

In insurance, an offer is usually made when

the insureds medical history

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

120 days

if a person has been found liable for a civil penalty in a hearing, the ruling can be entered as a judgment and enforced after

premanent

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