Insurance exam practice

A policy owner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

Automatic premium loan

Any insurance agent who engages in the insurance business and violates the Code with respect to insurance replacement shall on the first violation

Be fine sum of $1,000

Social security benefits are available for surviving spouse until the youngest child reaches 16. Benefits are again available for the spouse after reaching 60. What is the time period call during which the surviving spouse does not receive benefits?

Black out period

The violation of a material warranty or other material provision of a policy allows

Both the insurer and the insured to rescind

When an insured make truthful statement on the application for insurance and pays the required premium, it is known as which of the following?

Condersation

Which of the following would be the beneficiary in credit life insurance?

Creditor

Which of the following is BNOT a type of information that needs to be gathered in order to determine the value of someone's life when using the needs approach

Estimated longevity

An exclusive agent

Has a contract with one company

What type of insurance would be used for Return of Premium rider?

Increasing term

A contact which one party undertakes to indemnify another against a loss called

Insurance

Variable whole life insurance is based on what type of premium.

Level fixed

According to the California Insurance Code, what the term "shall" describes what actions?

Mandatory

Which of the following is another term for the accumulation period of an annuity

Pay in period

The causes of loss insured against in an insurance policy are known as

Perlis

Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?

Predicted needs of the family after the insured's death

Which of the following is the most common way to transfer risk?

Purchase insurance

Which two terms are associated with the way an annuity is funded?

Single payment or periodic payments

Events in which a person has both the chance of winning or losing are classified as

Speculative risk

A fee charged to the insured when a policy or annuity is exchanged for its cash value is

Surrender charge

In general terms, IRA contributions are

Tax deductible

Which of the following is TRUE regarding variable annuities

The annuitant assume the risk on investment

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

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

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

The employer is the owner and the beneficiary

Which of the following would NOT fall into this category of cost associated with death?

The expenses of a vacation for surviving family members

Who is responsible for notifying the Commissioner of a licensee's change of address?

The licensee

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

Which of the following statements regarding the taxation of Modified Endowment Contract is FALSE

Withdraws are not taxable

What limits the amount that a policyowner may borrow from a whole life insurance policy?

cash value

Which of the following annuity riders ensures investors will receive a set amount of income annually

guaranteed minimum income benefit

Which of the following persons represents several insurance companies but owns the records of the policies sold

independent agent

All of the following actions by a person could be described as risk avoidance EXCEPT

investing in the stock market

If a business owner becomes totally disabled, a Business Overhead Expense policy will pay all of the following EXCEPT

loss of the owner's income

What describes the specific information about a policy

policy summary

Which nonforfeiture option provides overage for the longest period time?

reduced paid-up

Insurance is the transfer of

risk

The insurance under $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple identity rider in the policy specifies that the death must not have be contributed by the insured in ant manner. In this case, what will the policy beneficiary receive?

$100,000

An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and then cash value fell $10,000. If the insured dies, how much will be paid of?

$50,000

Notice the senior consumers regarding their rights to cancel a policy must be printed on the cover or policy jacket in at least what type of print?

12-point standard print

For variable products, underlying assets must be kept in

A separate account

Insurance Policy is

A written statement in which a contract of insurance is set fourth

All of the following are example of third party ownership of a life insurance policy EXCEPT

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan

Which of the following would be covered by contract law?

An insured suing the insurer for failure to provide promised benefits

An applicant for insurance is requesting more information from her agent about a claim that is currently being settled. Within what time period must the agent respond?

1.15 days

At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies most likely fit needs?

Adjustable Life

When annuity is written, whose life expectancy is taken into account?

Annuitant

Employer contributions made to a qualified plan

Are subject to vesting requirements

Which of the following is NOT an example of a valid insurable interest

Debtor in the life of the creditor

The types of policies that are covered under the items of the association include

Direct, nongroup life, health, annuity and supplemental policies

Which of the following best describes the policy nonrenewal?

Discontinuance of an insurance policy by the insured on the policy's anniversary date

Which of the following is true regarding taxation of dividedness in participating policies?

Dividends are not taxable

Which of the following best describes an insurance company that has been formed under the laws of this state

Domestic

Which of the following is considered to be moral hazard?

Driving recklessly

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase

Which of the following insureds have a right to cancel an individual life policy for a full refund within 30 days of policy delivery?

Insureds who are 60 years of age or older

When agents are acting within the scope of their contact, their actions will be assumed to be the acts of the

Insurer

The mode of premium payment

Is defined as the frequency and the amount of the premium payments

What would be an advantage to naming a contingent (or secondary) beneficiary in a life insurance policy?

It determines who receives policy benefits if the beneficiary is decreased

Which of the following is NOT true regarding a Certificate of Authority

It is issued to group insurance participants

An insured buys a 5-year level premium term policy with a face amount of 10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium

It will increased because the insured will be 5 years older when the policy was originally purchased

Which statement is NOT true regarding a Straight Life policy?

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

Every long term care insurer in California must submit to the commissioner a list of all agents or other insurer representatives authorized to solicit individual customers for the sale of long term care insurance. These submitted agents list must be updated at least

Semiannually

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

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 disable, what will happen to the life insurance premiums?

The insured's premiums will be waived until she is 21

Which of the following cannot be included along with the illustrations used to sell life insurance

Vanishing premium information

Which of the following types of policies allows for a flexible premium and a variable investment component?

Variable universal life insurance

Which nonforfeiture option has the highest amount of insurance protection?

Extended team

An insured has the right to return the new insurance policy for a full refund during the

Free-look period

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 allows this?

Reinstatement provision

Adverse selection is a concept best describes as

Risks with higher probability of loss seeking insurance more often than other risks

When a fixed annuity owner pays a monthly premium to the insurance company, where is the money placed

The insurance company's general account

When an insured receives a written binder

The insured's coverage will be effective immediately

Which of the following statements regarding deferred compensation funds is INCORRECT

They are usually qualified plans

The waiver of cost of insurance rider is found in what type of insurance

Universal life