Insurance quizzes

Which of the following is true regarding Continuing Education required for those holding a Pennsylvania producer license?

24 hours each licensing period

A licensed producer moving to Pennsylvania may become licensed as a resident if the producer submits a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?

90 days

Life insurance death proceeds are

A Generally not taxed as income. Life insurance death benefits are generally not taxed as income.

When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy, as well as a refund of all of the premiums paid. Which rider is attached to the policy?

A Return of premium The Return of Premium Rider pays the beneficiary not only the face amount of the policy but also the amount that had been paid in premiums. The rider stipulates that death must occur prior to a certain age in order for the premium amount to be returned. The Return of Premium Rider is funded by using increasing term insurance.

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured Straight Life policies charge a level annual premium for the lifetime of the insured and provide a level, guaranteed death benefit.

Which of the following is an example of a producer's fiduciary responsibilities?

A producer promptly forwarding premiums to the insurance company

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

A salaried employee who advertises and solicits insurance

An individual was just caught acting as an exclusive general agent - even though he is not properly licensed. Assuming that this occurred in a single day, what is the maximum penalty he faces?

A third-degree misdemeanor and a $1,000 fine

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 would most likely fit his needs?

Adjustable Life Adjustable life policies allow for increases or decreases in the face amount or premium, so long as the premium is sufficient to pay for the mortality. Any increase in face amount requires proof of insurability.

An insured misstates her age at the time the life insurance application is taken. This misstatement may result in

Adjustment in the amount of death benefit. If the applicant has misstated his or her age or gender on the application, the insurer, in the event of a claim, is allowed under this provision to adjust the benefits to an amount that the premium at the correct age or gender would have otherwise purchased.

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?

Any form of life insurance

The accelerated benefits provision will provide for an early payment of the death benefit when the insured

Becomes terminally ill. The accelerated benefits provisions allow the owner to be advanced a significant portion of the death benefit when the insured is terminally ill.

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?

Collateral assignment

producer who fails to separate premium monies from his own personal funds is guilty of

Commingling

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

Common disaster clause

An Adjustable Life polsyowner can change which of the following policy features?

Coverage period

Which of the following is NOT typically excluded from life policies?

Death due to plane crash for a fare-paying passenger

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

Debtor in the life of the creditor

The death benefit in a variable universal life policy

Depends on the performance of a separate account. The death benefit is not fixed, and may increase or decrease over the life of the policy depending on the investment performance of the underlying sub-account. It cannot, however, decrease below the initial face amount of the policy.

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount

an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount

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 Annuity. The interest rates of Equity Indexed Annuities are tied to the Standard and Poor's Index.

Violation of unfair discrimination law may result in all of the following penalties EXCEPT

Fines up to $1000 each

Which of the following criminal activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance producer's license?

Forgery Upon conviction of a felony, a producer's license will be revoked by the Commissioner.

According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to Annualization, the owner is entitled to which of the following?

Guaranteed surrender value

All of the following are licensing requirements for a business entity, EXCEPT

Having all employees complete continuing education courses once every 2 years.

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

The Medical Information Bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons.

The mode of premium payment

Is defined as the frequency and the amount of the premium payment.

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

When a reduced paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium

Which of the following is usually true of a participating life insurance policy?

It pays dividends to policyowners

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 increase because the insured will be 5 years older than when the policy was originally purchased.

In the underwriting process, it was determined that the applicant for life insurance is in poor health and has some dangerous habits. Which of the following is true concerning the policy premium?

It will likely be higher because the applicant is a substandard risk.

Which statement is NOT true regarding a Straight Life policy?

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

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 A Joint Life policy covering two lives would be the least expensive because the premiums are based on an average age, and it would pay a death benefit only at the first death.

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?

Joint Life Joint life annuity settlement option pays benefits to two or more annuitants, but stops upon the death of the first.

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a

Joint life annuity

Concerning Juvenile Life insurance, which of the following statements is INCORRECT?

Juvenile Life is classified as any life insurance purchased by a minor.

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?

Military service or war

After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?

Monthly premium waiver and monthly income

ABC Insurance Company wishes to begin transacting business in Pennsylvania. Before it can do so, it must do which of the following?

Obtain a certificate of authority

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

A producer has become disabled. In order to keep his business going, what may the producer's designee do?

Obtain a temporary license

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 additions

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

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.

All of the following are characteristics of group life insurance EXCEPT

Premiums are determined by the age, sex and occupation of each individual certificate holder.

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

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

SEC registration

An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called

Single premium whole life

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Size of each installment

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

Which of the following is TRUE regarding variable annuities?

The annuitant assumes the risks on investment

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

The annuitant must be a natural person.

If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur?

The change must be reported to the Commissioner.

Which of the following is true regarding a waiver of a surrender charge on an annuity contract?

The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days.

Which of the following statements about group life is correct?

The cost of coverage is based on the ratio of men and women in the group.

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.

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 happens if a deferred annuity is surrendered before the annuitization period?

The owner will receive the surrender value of the annuity.

All of the following statements are true regarding installments for a fixed amount EXCEPT

The payments will stop when the annuitant dies.

Which of the following best defines target premium in a universal life policy?

The recommended amount to keep the policy in force throughout its lifetime

The termination of marital property rights may be reversed for all of the following reasons EXCEPT

The spouse named as beneficiary has obtained or consented to a final decree or judgment of an annulment, divorce or separation.

All of the following are characteristics of a group life insurance plan EXCEPT

There is a requirement to prove insurability on the part of the participants.

All of the following are requirements for life insurance illustrations

They must identify nonguaranteed values. They must differentiate between guaranteed and projected amounts. They may only be used as approved.

What is the purpose of the buyer's guide?

To allow the consumer to compare the costs of different policies

Which of the following is the best reason to purchase life insurance rather than an annuity?

To create an estate

Should an insurance company deny a claim submitted by an insured without providing to that insured a prompt and reasonable explanation of the claim denial, the insurer would be in violation of

Unfair claims methods and practices regulations.

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

Insurers are required to keep records. When may the Department examine these records?

at any time

Which of the following entities must approve all continuing education courses in this state?

commissioner

The type of policy that can be changed from one that does not accumulate cash value to the one that does is a

convertible term policy

Which of the following statements is NOT true concerning insurable interest as it applies to life insurance?

d) A debtor has an insurable interest in the life of a lender.

If an insured changes the premium payment mode from monthly to annually, what happens to the total premium?

decreases

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

fixed period

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.

Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level?

to bail out

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

variable