Florida Life Insurance
Under special circumstances, continuing education requirements may be extended beyond the 2-year period for a maximum period of
12 months
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?
2 years
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
An agent has been convicted of a crime punishable by a 1-year imprisonment. Within how many days must the agent notify the department of insurance?
30 days
Licensed life insurance agents are expected to be familiar with which of the following laws?
All of the insurance laws and regulations
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees.
What characteristic makes whole life permanent protection?
Coverage until death or age 100
Who does the secondary notice provision protect?
Elderly Insureds
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die.
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
Incontestability clause.
A Return of Premium term life policy is written as what type of term coverage?
Increasing
Who makes up the Medical Information Bureau?
Insurers
The Office of Insurance Regulation is responsible for all of the following insurer activities EXCEPT
Issue of securities.
What is the purpose of a conditional receipt?
It is intended to provide coverage on a date prior to the policy issue.
Which of the following is NOT true regarding a Certificate of Authority?
It is issued to group insurance participants.
What is the term for how frequently a policyowner is required to pay the policy premium?
Mode
Which of the following is NOT true regarding policy loans?
Money borrowed from the cash value is taxable.
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?
Withdrawals are not taxable.
What is the timeframe for filing relevant Suspicious Activity Reports?
Within 30 days of initial discovery
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
authorized insurer
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT
being age 65
The term "fixed" in a fixed annuity refers to all of the following EXCEPT
death benefit
which of the following authorities grants and revokes licenses
department of financial services
The inclusion of the Life and Health Guaranty Association in an advertisement by an insurer is
forbidden
The automatic premium loan provision is activated at the end of the
grace period
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 proposals used for at least 5 years
A domestic insurer issuing variable contracts must establish one or more
separate accounts
Which of the following insurers are owned by stockholders?
stock
The interest earned on policy dividends is
taxable
Under a group plan, Certificates of Insurance must include all of the following EXCEPT
the name of the writing agent
Which of the following determines the cash value of a variable life policy?
the performance of the policy portfolio
The minimum number of credits required for partially insured status of Social Security disability benefit is
6 credits
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6 credits
How often must domestic insurance companies be examined by the Chief Financial Officer in Florida?
At least every 5 years
Which of the following is INCORRECT regarding a $100,000 20-year level term policy?
At the end of 20 years, the policy's cash value will equal $100,000.
An agent transacts business for Insurer A and Insurer B, both selling life insurance, and for Insurer C, selling health insurance. How many appointments must the agent hold?
three - one for each insurer
What is the purpose of a disclosure statement in life insurance policies?
to explain features and benefits of a proposed policy to a consumer
Which of the following is true regarding the agent's appointments?
a person may hold several appointments at one time
Which of the following is another term for an authorized insurer?
admitted
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
interest-sensitive whole life
Which of the following riders added to a life insurance policy can pay part of the death benefit to the insured to cover expenses incurred in a nursing or convalescent home?
long-term care
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
twisting
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?
twisting
Social Security was created to provide all of the following benefits EXCEPT
unemployment income
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?
unilateral
What kind of policy allows withdrawals or partial surrenders?
universal life
What is the maximum allowed value of promotional gifts that an agent may give to a prospective insured?
$100
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
Regulations for annuity recommendations would apply when a consumer is at least what age?
65 years old
All of the following statements concerning dividends are true EXCEPT
Dividend amounts are guaranteed in the policy.
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?
Fair Credit Reporting Act
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report.
Which term describes the benefits of a life insurance policy that the policyowner does not automatically relinquish even if the policy lapses?
Nonforfeiture values
An agent's appointment has been denied. Which of the following is true?
State taxes may be refunded upon a written request.
What are the 2 offices of the Financial Services Commission?
The Office of Financial Regulation and the Office of Insurance Regulation
Which of the following is an agreement between an insured and an insurer, where the insurer agrees to indemnify the insured for specific losses in exchange for a premium?
The insurance contract
The two types of assignments are
absolute and collateral
Applications to an insurer must include all of the following information, EXCEPT
credit history report
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
dividends from a mutual insurer
Which of the following best describes annually renewable term insurance?
it is level term insurance
Variable Whole Life insurance is based on what type of premium?
level fixed
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
level term
Traditional IRA contributions are tax deductible based on which of the following?
owners income
Which of the following riders would NOT cause the Death Benefit to increase?
payor benefit rider
The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount?
100
The minimum age for purchasing life insurance policy in Florida is
15
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
An applicant for a life agent's license may obtain a temporary license for a maximum period of
6 months.
An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.
Which of the following is a key distinction between variable whole life and variable universal life products?
Variable whole life has a guaranteed death benefit.
Which of the following is the basic source of information used by the company in the risk selection process?
application
An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds
$50,000
An insured owns a $50,000 whole 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?
$50,000
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?
$9,800
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
decreasing term
An agent delivers a life insurance policy to the proposed insured. The insured makes a decision not to accept the policy. The insured may return the policy for a full refund of premium within how many days?
14
A paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within how many days after the due date of the premium in default?
60
An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of
A STOLI policy.
Which of the following statements is NOT true concerning insurable interest as it applies to life insurance?
A debtor has an insurable interest in the life of a lender.
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?
A minor son of the insured
Which of the following would be required to be licensed as an insurance producer?
A salaried employee who advertises and solicits insurance
What is a material misrepresentation?
A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?
Adhesion
In insurance, an offer is usually made when
An applicant submits an application to the insurer
Who can make a fully deductible contribution to a traditional IRA
An individual not covered by an employer-sponsored plan who has an earned income.
A Universal Life Insurance policy is best described as a/an
Annually Renewable Term policy with a cash value account.
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?
Automatic premium loan
All of the following are Nonforfeiture options EXCEPT
interest only
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
pay the policy proceeds only if it would have issued the policy
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
universal life
In a survivorship life policy, when does the insurer pay the death benefit?
upon the last death
All of the following information about a customer must be used in determining annuity suitability EXCEPT
Beneficiary's age
Which of the following is a feature of a variable annuity?
Benefit payment amounts are not guaranteed.
What license or licenses are required to sell variable annuities?
Both a life insurance license and a securities license
All of the following are duties and responsibilities of producers at the time of application EXCEPT
Change any incorrect statement on the application by personally initialing next to the corrected statement.
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is
Conditional
Which of the following includes information regarding a person's credit, character, reputation, and habits?
Consumer report
What is another name for interest-sensitive whole life insurance?
Current assumption life
Which of the following is true regarding taxation of dividends in participating policies?
Dividends are not taxable
All of the following statements are true regarding tax-qualified annuities EXCEPT
Employer contributions are not tax deductible.
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
False advertising
An insured has a Modified Endowment Contract. He wants to withdraw some money in order to pay medical bills. Which of the following is true?
He will have to pay a penalty if he is younger than 59½.
Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?
Insuring clause
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.
Which statement is NOT true regarding a policy summary?
It must be combined with a sales illustration.
Which of the following is NOT true regarding a nonqualified retirement plan?
It needs IRS approval.
Which of the following statements is TRUE about a policy assignment?
It transfers rights of ownership from the owner to another person.
An employee is joining a group insurance plan. In order to avoid having to prove insurability, what must the employee do?
Join during the open enrollment period
All of the following would be considered an insurance transaction EXCEPT
Obtaining an insurance license.
What is a definition of a unilateral contract?
One-sided: only one party makes an enforceable promise
All of the following are true regarding insurance policy loans EXCEPT
Policy loans can be made on policies that do not accumulate cash value.
Who might receive dividends from a mutual insurer?
Policyholders
When an insurer terminates an agent's appointment, the insurer must do all of the following EXCEPT
Provide a 30-day advance notice to the Commissioner.
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.
Methods used to pay the death benefits to a beneficiary upon the insured's death are called
Settlement options.
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
Who examines the books and records of insurance companies in Florida?
The Cheif financial officer
All of the following statements about equity index annuities are correct EXCEPT
The annuitant receives a fixed amount of return.
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The customer's associates, friends, and neighbors provide the report's data.
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
The date of medical exam
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability.
Which of the following describes the tax advantage of a qualified retirement plan?
The earnings in the plan accumulate tax deferred.
Which of the following is INCORRECT concerning a noncontributory group plan?
The employees receive individual policies.
Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?
The employer is the owner and beneficiary
All of the following entities regulate variable life policies EXCEPT
The guaranty association
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?
The insured may choose to convert to term or permanent individual coverage
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
The insured's premiums will be waived until she is 21.
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
The interest is not taxable since it remains inside the insurance policy.
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination.
Which of the following best describes what the annuity period is?
The period of time during which accumulated money is converted into income payments
All of the following are true of key person insurance EXCEPT
The plan is funded by permanent insurance only.
Which of the following best defines the "owner" as it pertains to life settlement contracts?
The policy owner of the life insurance policy
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.
All of the following are true about variable products EXCEPT
The premiums are invested in the insurer's general account.
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.
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contract
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
An insured submits a proof of loss form within 10 days of a loss. The insurer, however, does not acknowledge the form for 3 months. Which of the following violations has the insurer committed?
Unfair claims settlement
What is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military?
War or military service
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
The term "illustration" in a life insurance policy refers to
a presentation of non-guaranteed elements of a policy
Which of the following insurance products will be subject to the regulation on life insurance solicitation?
a term life policy
The minimum interest rate on an equity indexed annuity is often based on
an index like standard & poor's 500
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
authorized
An insurance contract must contain all of the following to be considered legally binding EXCEPT
beneficiary's consent
Which of the following best describes fixed-period settlement option?
both the principal and interest will be liquidated over a selected period of time
Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?
buy-sell agreement
If an agent advises a policyholder to replace an insurance policy but only does so for the purpose of making commissions, the agent has committed an act of
churning
An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of
concealment
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
conditional
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
conditions
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
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as
contracts of adhesion
applications to an insurer must include all of the following information EXCEPT
credit history report.
Which of the following is NOT a responsibility of the office of insurance regulation
enacting new insurance laws
The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the
entire contract
How long must insurers maintain records of the information collected from senior consumers and other information used in making recommendations that were the basis for insurance transactions?
for 5 years after the insurance transaction is completed by the insurer
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?
foreign
An insured received a new life insurance policy 5 days ago, but after a closer inspection of the policy provisions, decided to return it to the insurer. What provision would allow the insured to return the policy for a full premium refund?
free look
an insured received a new life insurance policy 5 days ago, but after a closer inspection of the policy provisions, decided to return it to the insurer. what provision would allow the insured to return the policy for a full premium refund?
free look
What required provision protects against unintentional lapse of the policy?
grace period
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
immediate annuity
What type of insurance would be used for a Return of Premium rider
increasing term
The Medical Information Bureau (MIB) was created to protect
insurance companies from adverse selection by high risk persons
All advertisements are the responsibility of the
insurer
What is the benefit of choosing extended term as a nonforfeiture option?
it has the highest amount of insurance protection
Which of the following settlement options in life insurance is known as straight life?
life income
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
life income with period certain
The premium of a survivorship life policy compared with that of a joint life policy would be
lower
When an insurer terminates an agent's appointment, the insurer must do all of the following EXCEPT
provide a 30-day advance notice to the commissioner
Which of the following is among the regulations set forth by the Florida Replacement Rule?
providing a written comparison and summary statement
All of the following are true regarding rebates EXCEPT
rebates are allowed if it is in the best interest of the client
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
rebating
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as
rebating
Which nonforfeiture option provides coverage for the longest period of time?
reduced paid-up
If an employer decides to change its life insurance policy to a similar one with a different insurer, which of the following describes the extent that replacement regulations will be exercised?
replacement regulations will not apply in this situation
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
replacement rule
Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must
respond to the consumer's complaint
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
settlement option
Methods used to pay the death benefits to a beneficiary upon the insured's death are called
settlement options
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?
size of each installment
The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the
spendthrift clause
When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments?
spendthrift provision
All of the following would be different between qualified and nonqualified retirement plans EXCEPT
taxation on accumulation
Children's riders attached to whole life policies are usually issued as what type of insurance?
term
A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?
the amount of the distribution is reduced by the amount of a 20% withholding tax
The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option in this case?
the beneficiary
How will a life insurance beneficiary designation naming a spouse be changed by divorce?
the beneficiary designation will be voided
which of the following dates must be contained in a policy summary
the date the summary was prepared
An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?
the policy will not be affected
A person insured under a group life insurance policy can make an assignment of all or any part of the incidents of ownership conferred on the insured by the policy or by law, to any of the following EXCEPT
the policyholder
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 is the best reason to purchase life insurance rather than annuities?
to create an estate
An applicant for an insurance agent's license must
Complete a prelicensing education course
Which nonforfeiture option has the highest amount of insurance protection?
Extended Term
In a life settlement contract, whom does the life settlement broker represent?
The owner
Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?
Third-party ownership
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract.
The death protection component of Universal Life Insurance is always
annually renewable term
In classifying a risk, the Home Office underwriting department will look at all of the following EXCEPT
applicant's past income
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)
403(b) Plan (TSA).
If a claim is made on a policy during the grace period, an insurer is allowed to deduct the overdue premium and to charge interest. What is the maximum allowed interest rate?
8%
An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?
A portion of the benefit up to a limit is tax free; the rest is taxable income.
An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed insurability option
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
One-year term option.
Which of the following is an example of a producer's fiduciary duty?
The trust that a client places in the producer in regard to handling premiums.
All of the following are requirements for life insurance illustrations EXCEPT
They must be part of the contract.
Under what circumstances can an agent's appointment be transferred to another person?
Under no circumstances
Who is a third-party owner?
a policyowner who is not the insured
When transacting business in this state an insurer formed under the laws of another country is known as a/an
alien insurer
When an annuity is written, whose life expectancy is taken into account?
annuitant
Which of the following products will protect an individual from outliving their money?
annuity
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
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered
discrimination
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
payor benefit
When a group policy terminates, every individual insured under the policy will be entitled to have an individual policy if the insured has been insured by the group policy for at least how many years prior to policy termination?
5 years
In the state of Florida, it is illegal for a licensee's commissions from controlled business to exceed what percentage of the total in a given year?
50%
Which of the following is the required number of participants in a contributory group plan?
75%
An insurance producer just sold an insurance policy to his sister. What kind of business is this?
Controlled
An agent's client needs additional insurance which the agent's own insurer cannot provide. The agent has to solicit additional coverage from another authorized insurer. This coverage is known as
Excess.
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner.
What level of authority is given to the Office of Insurance Regulation with respect to examination of insurer's activities to determine compliance Unfair Trade Practice laws?
absolute
As a field underwriter, a producer is responsible for all of the following tasks EXCEPT
issue the policy that is requested
Which of the following entities is responsible for agent licensing and administrative supervision?
The Office of Insurance Regulation
Which of the following products requires a securities license?
variable annunity
In an annuity, the accumulated money is converted into a stream of income during which time period?
Annuitization period
An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?
Common Disaster
Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?
Premiums are not tax deductible as a business expense.
Which of the following is TRUE about nonforfeiture values?
They are required by state law to be included in the policy.
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated
Which of the following authorities grants and revokes licenses?
Department of Financial Services
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)
Equity Indexed Annunity
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?
Joint life
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
Which of the following will be included in a policy summary?
Premium amounts and surrender values
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?
Reinstatement provision
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Required a premium increase each renewal.
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 of the following is TRUE regarding variable annuities?
The annuitant assumes the risks on investment.
Under an extended term nonforfeiture option, the policy cash value is converted to
The same face amount as in the whole life policy.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
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
When does the free look period begin?
When the policy is delivered to the insured
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
mutual
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
What is the name of the insured who enters into a viatical settlement?
viator
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT
the insured's age at death
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
If a person accumulates more continuing education hours than is necessary to fulfill the requirements of the 2 year period which of the following will occur?
the extra hours may be continued into the next period
Who does the secondary addressee provision protect?
the insured over the age of 64
In order for a debtor group to qualify for group life insurance, what should be the minimum number of participants joining the plan every year?
100
Which of the following is true about the premium on the children's rider in a life insurance policy?
It remains the same no matter how many children are added to the policy
Which of the following statements is INCORRECT
Replacing insurance policies for the purpose of making commissions is legal
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
All of the following would be considered rebating EXCEPT
an agent misrepresents policy benefits to convince a policyowner to replace policies
If a life insurance policy develops cash value faster than a seven-pay whole life contract, it becomes a/an
modified endowment contract
During replacement of life insurance, a replacing insurer must do which of the following?
obtain a list of all life insurance policies that will be replaced
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?
Interest only option
For how long is an insurance company allowed to defer policy loan requests?
6 months
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
paid-up options
