Insurance Licensing Test
Which of the following is an example of liquidity in a life insurance contract?
The cash value available to the policyowner
What is the maximum allowed value of promotional gifts that an agent may give to a prospective insured?
$100
What does "level" refer to in term insurance?
Face amount
The inclusion of the Life and Health Guaranty Association in an advertisement by an insurer is
Forbidden
In life policies issued in this state, insurers are permitted to charge interest during the policy grace period for the number of days elapsing before the premium is paid. What is the maximum annual interest rate?
8%
For variable products, underlying assets must be kept in
A separate account
Which of the following insurance products will be subject to the regulation on life insurance solicitation?
A term life policy
Which of the following is another term for an authorized insurer?
Admitted
Which of the following would NOT be a violation of state insurance regulations?
Agent C uses her license to write only business other than controlled.
Which of the following authorities grants and revokes licenses?
Department of Financial Services
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
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 is the appropriate action by the insurer if a prospective insured submitted an incomplete application?
Return the application to the applicant for completion
Which of the following would help prevent a universal life policy from lapsing?
Target premium
The premiums paid by the employer in a business life insurance policy are
Tax deductible by the employer
A customer with an existing life insurance contract is considering exchanging it for a newer contract. What Florida insurance regulation should the customer's insurance agent consult?
The Florida Replacement Rule
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
Which of the following is TRUE about nonforfeiture values?
They are required by state law to be included in the policy.
Which of the following statements is TRUE concerning irrevocable beneficiaries?
They can be changed only with the written consent of that beneficiary
What is the purpose of a fixed-period settlement option?
To provide a guaranteed income for a certain amount of time
An absolute agreement is
Transfer of all ownership rights in a policy
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent.
An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds
$50,000
Under special circumstances, continuing education requirements may be extended beyond the 2-year period for a maximum period of
12 months
An applicant for a life agent's license may obtain a temporary license for a maximum period of
6 months
In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse turns age 60 called?
Blackout period
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
Have attained fully insured status
A return of Premium term life policy is written as what type of term coverage?
Increasing
All advertisements are the responsibility of the
Insurer
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expensive factors, the cash values could change from those shown in the policy at issue time. The policy is a/an
Interest-sensitive Whole Life
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.
What is the official name for the Social Security Program?
Old Age Survivors Disability Insurance
Which of the following determines the Cash value of a variable life policy?
The performance of the policy portfolio
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
Which of the following best describes MIB?
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
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.
What are the 2 offices of the Financial Services Commission?
The Office of Financial Regulation and the Office of Insurance Regulation
The insured under a $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 indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?
$100,000
When would a 20-pay whole life policy endow?
When the insured reaches age 100
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%
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 the cash value fell to $10,000. If the insured dies, how much will be paid out?
50,000
For how long is an insurance company allowed to defer policy loan requests?
6 months
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
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
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%
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
What is reinsurance?
An agreement between a ceding insurer and assuming insurer
Which of the following products provides income for a specified period of years or for life, and protects against outliving their money?
An annuity
What is a foreign insurer?
An insurer with a home office in another state
The LEAST expensive first-year premium is found in which of the following policies?
Annually Renewable term
All of the following are personal uses of life insurance EXCEPT
Buy-sell agreement
How are state Insurance Guaranty Associations funded?
By their members - authorized insurers
A producer who fails to separate premium monies from his own personal funds is guilty of
Commingling
What term best describes the act of withholding material information that would be crucial to an underwriting decision?
Concealment
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
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engages in the business of insurance?
Defamation
Which of the following is NOT a responsibility of the Office of Insurance Regulation
Enacting new insurance laws
Which of the following best describes the aleatory nature of an insurance contract?
Exchange of unequal values
All of the following actions can be described as twisting EXCEPT
Explaining to the client the advantages of permanent insurance over term and suggesting changing policies
When an employee terminates coverage under a group insurance policy, coverage continues in force
For 31 days
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
Which of the following is an example of a limited-pay life policy?
Life paid-up at age 65
What is the other term for the cash payment settlement option?
Lump Sum
Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?
Paid-up option
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
Which of the following riders would NOT cause the Death Benefit to increase?
Payor Benefit Rider
Which of the following individuals must have insurable interest in the insured?
Policyowner
Another name for a substandard risk classification is
Rated
All of the following are true regarding rebates EXCEPT
Rebates are allowed if its in the best interest of the client
The Federal Fair Credit Reporting Act
Regulates consumer reports
A policyowner who is also the insured wanted 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
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
An insurance agent B likes to add additional coverages to applicants' policies and charger them for such coverages without their knowledge. The agents is guilty of
Sliding
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
The annuitant dies while the annuity is still in the accumulation stage. Which of the following is TRUE?
The beneficiary will receive the greater of the money paid into the annuity or the cash value?
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 deductible expense by the employer
Which of the following dates must be contained in a policy summary?
The date the summary was prepared
Which of the following is INCORRECT concerning a noncontributory group plan?
The employees receive individual policies
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
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.