Guarantee examm

All of the following statements about mutual insurance companies are correct except

Policy dividends issued by mutual companies are guaranteed and not taxable

In a group life policy with a death benefit of more than $50,000

Premium cost above $50,000 is taxable as income to the employee

If a life insurance company uses HIV testing as a part of its underwriting, when must an applicant be notified of the procedure?

Prior to performance of the test

What effect will the long-term care (LTC) rider have on the death benefit of life insurance policy if LTC benefits were paid to the insured?

Reduce the death benefit

When an agent delivered an insurance policy to the insured, he collected the initial premium, as well as the document, verifying that the insured had not had any inquiries or illness since the application date. What is this document called?

Statement of good health

Which of the following actions does not constitute false advertising

Stating that dividends are not guaranteed

Life insurance can provide which of the following?

Survivor protection

What Florida insurance regulation established an outline of appropriate and inappropriate business behavior for life insurance agents?

The Code of Ethics of the Florida Association of Insurance and Financial Advisors

Which of the following statements concerning the medical information bureau is correct?

The Medical Information Bureau assists underwriters in evaluating and classifying risks.

Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application?

The application contains material misstatements

As it relates to life settlements, the term "owner" means

The owner of the original life policy

Who is the annuity owner?

The person who purchases the annuity

All of the following statements about indexed whole life insurance are correct except

The policy face amount remains level throughout the life of the policy

Which of the following is true regarding premium in a 10-year level premium policy?

The premium will remain level for 10 years

What is the purpose of key-person insurance?

To minimize the risk of financial loss caused by the death of a key employee

Variable life insurance is regulated by all of the following entities except

U.S. Department of the Treasury

Failing to acknowledge and act reasonably promptly upon communications with respect to an insurance claim is in violation of what insurance regulation?

Unfair claims settlment

Two individuals of the same age, health status, and life expectancy apply for individual insurance coverage. When policies are issued by the same insurer, the premium rates are different based on the insurer's race. What practice does this describe?

Unfair discrimination

If the policy summary for a life insurance policy is not given when the application is taken, when must the policy summary be given to the policyowner?

When the policy is delivered

The policy owner has an option to pledge the life insurance policy as collateral for a bank loan this is called

collateral assignment

Which of the following elements of an insurance contract requires payment of premium?

consideration

A whole life policy is surrendered for a reduced paid up policy. The cash value in the new policy will

continue to increase

Among the applicants in the same class and life expectancy, which of the following factors can be used to influence premium rates?

occupation

The guaranteed insurability rider allows the owner to purchase additional amounts of life insurance, without proof of insurability at all of the following, except

purchase of a new home

If an applicants health is poorer than that, of an average applicant, the policy may be issued

substandard

An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premiums will be slightly lower. The policy, however, would not offer either one of these things. What type of misrepresentation is being committed?

twisting

An insured is issued a life insurance policy in Florida and wishes to return it for a refund. How many days does the insured have for such an action?

14 days

How many hours of continuing education must a newly licensed agent complete every 2 years?

24

An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?

3 days

How long is the required grace period in life insurance policies issued in this state?

30 days

An applicant for an agent's Life only license must complete a minimum of how many hours of pre licensing education?

40

Individual members covered by group life insurance receive

A certificate of insurance

Which of the following is NOT considered eligible for group life insurance?

A credit union that needs coverage only for its top 10 employees

Which of the following would be required to become licensed as an insurance producer?

A customer service representative who solicits no more than one policy a year

According to the life insurance replacement regulations, which of the following would be an example of policy replacement?

A policy is reissued with a reduction in cash value

Which of the following statements is incorrect concerning modified endowment contracts (MECs)?

An MEC must always pass the 7-pay test

Which of the following would be an example of an unfair trade practice of sliding?

An agent is falsely leading an applicant to believe that additional coverage is required by law

All of the following could qualify as a group for the purpose of purchasing group life insurance except

An association formed 1 year ago.

Which provision may be added to a permanent life policy at no cost that insures that the policy will not last so long as there is cash value?

Automatic premium loan option

Which of the following would be true of both the fixed-period and fixed-amount settlement options?

Both guarantee that the principal and interest will be fully paid out

Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination?

Charging the insured higher premiums based on her race

Which of the following sources would explain the state policies regarding appropriate agent conduct?

Code of ethics of the Florida Association of Insurance and Financial Advisers

Agent mcbutch uses his big size and implication of his connections to intimidate applicants into purchasing life insurance from him. Which unfair trade practice is this an example of?

Coercion

An individual has a $200,000 convertible term life insurance policy. If he chooses, he can

Convert to a whole life policy for the same face amount without proof of insurability

Decreasing term insurance is often used to

Cover a mortgage

An employee guys having 6 quarters of coverage during the previous 13-quarter period. What status of coverage does the employee have under Social Security?

Currently insured

A married couple wants to include the entire family and their whole life policy under one rider . Which of the following riders will help them achieve that goal?

Family term

Premiums collected on behalf of the insurance company by an agent will be held in what capacity?

Fiduciary

Which of the following is a correct statement about annuities?

Fixed annuities do not provide protection against inflation

The owner of a deferred annuity pays $100 in premium one month, and $130 the next month. Which of the following terms best describes this premium payment arrangement?

Flexible premium

At what point would an automatic premium loan be generated?

Following the grace period

In making an annuity recommendation to a consumer, that producer must have responsible grounds to believe that the annuity

Is suitable

Which of the following is true of level term insurance?

It is temporary protection

All of the following statements regarding the Life insurance Policy Summary is correct EXCEPT

It must illustrate all guaranteed policy dividend values

Which of the following is true regarding pure life annuity settlement option?

It provides the highest monthly benefit

Which of the following best describes pure life annuity?

It provides the highest monthly benefits. The pure life annuity, also known as Life Only or Straight Life, pays the most since it only guarantees to pay for the rest of one's life without a minimum guarantee.

What guarantees that the information explained in the insurance contract is true?

warranty

Which of the following is NOT an example of the company's location of incorporation?

Authorized

An insurance company that is owned by the policyholders is called a

Mutual insurer

The reduction of premium option uses the dividend to reduce

Next year's premium

What is a specific requirements regarding the number of employees in a simple plan?

No more than 100 employees

cash value guarantees in a whole life policy are called

Nonforfeiture values

Which statement best describes agreement as it relates to insurance contracts?

One party accepts the exact terms of the other party's offer

A married couple purchase a life insurance policy on their newborn baby. They are concerned about what would happen to the policy. If either one of them were unable to continue making the premium payments due to death or disability, which policy writer should their agent recommend?

Payor benefit

An annuity has accumulated the cash value of 70,000, of which $30,000 it's from premium payments, annuitant dies during the accumulation phase the beneficiary will receive

$70,000

What is the maximum amount of individual life insurance coverage that a person can convert to if the existing group policy has been terminated?

$10,000

If an individual willfully violates provisions of the Fair Credit Reporting Act, what is the maximum civil penalty?

$2,500

What is the maximum level of item an insurer may gift a prospective insured as an advertisement?

$50

Group life policies are usually issued as what type of coverage?

Annually renewable term

Which of the following indicates the person upon his life the annuity income amount is determined?

Annuitant

When agents, brokers, or solicitors handle premiums for an insurer, they are acting in which capacity?

As a fiduciary

In whole life insurance when is the policy cash value scheduled to equal the face amount?

At the insured's age 100

Which of the following statements is true regarding an agent's report during the policy application process?

Aunt provides the agents personal observation is concerning the proposed insured

Under which of the following conditions would life insurance proceeds to be taxable by the federal government?

If there is a transfer for value

What does the Guaranty Association guard against?

Insurer insolvency

The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon insureds death is called the

Insuring clause

Your client wants to provide a retirement income for his early parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select?

Joint and survivor

Which of the following is not eligible for Group Life Insurance?

Labor groups

What does an annuity protect the annuitant against?

Living longer than expected

An example of an alien insurer doing business in this state is one formed under the laws of

Mexico

Guaranteeing future dividends is considered to be an unfair or deceptive act known as

Misrepresentation

An individual receives a lump-sum inheritance. He'd like to use the money to create a lifetime income since he'll be retiring soon. He purchased an annuity and wishes to receive payments beginning in 2 months. What did he buy?

Single, premium deferred annuity

As an insurer's field underwriter, a producer has all of the following responsibilities except

Soliciting insurance contracts

Which of the following will not be included in the buyers guide?

Specific information about the policy

The family term rider incorporates

Spouse term and children's term

Which of the following types of insurance policies would performed the function of cash accumulation?

Whole life

When an insured terminated membership in the insured group, the insured can convert to

Whole life without proof of insurability

During what period is a new life insurance policyholder entitled to review a policy and return it for a full refund?

Within 14 days after delivery of the policy

An insured has a life insurance policy in the amount of $250,000 naming his wife as beneficiary. Upon his death, his beneficiary decides not to receive the death benefit for sometime. When she finally receives the death benefit check, it's in the amount of $250,530. Is any portion of the proceeds that the beneficiary receives taxable?

Yes, proceeds in excess of face amount are taxable as interest.

Who does the spendthrift clause in a life insurance policy protect?

beneficiary

During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of

defamation

Which of the following is not a standard exclusion in life insurance policies?

disability

An insurer incorporated under the laws of another state but doing business in this state is considered

foreign