Insurance training

Joint and survivor

A couple near retirement is planning for their golden years. They want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose?

Joint life Policy

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. which policy is that?

dividend amounts are guaranteed in the policy

All of the following statements concerning dividends are true except

15 days

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

$50,000

An employee will be taxed on the cost of group life insurance paid by the employer theamount of coverage exceeds

has a contract with one company

An exclusive agent

be fined a sum of $10,000

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

$10,000

Any person who engages in any unfair method of competition or deceptive act is liable to the state for a civil penalty and a fine of $5,000 for each act. In addition, if it is determined that the act is willful the fine will NOT exceed

Guaranteed surrender value

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

Blanket Life

After being hired to deliver newspapers to his neighbors, a man is provided with $10,000 of life insurance by the newspaper. He would be covered under which kind of life insurance?

At distribution, all amounts received by the employee are tax free

All of the following are TRUE of the federal tax advantaged of a qualified plan EXCEPT

The payments will stop when the annuitant dies (Installments for a fixed amount option has no life contingencies. A specified amount of benefits will be paid until funds are exhausted, whether or not the annuitant is living.

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

a company that reinsurers outstanding risks.

All of the following would be considered insolvent insurers EXCEPT

1. FINRA

An agent seeking variable annuities must be registered with

the surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive

An insured has a chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

$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?

$30,000

An insurer has been found guilty of a code violation regarding replacement. The insurer then repeats the violation. What will be the minimum penalty?

ask questions that are not on the application but that are important for underwriting

During a pre selection interview, an agent is allowed to do all of the following except

erase the incorrect answer and record the correct answer

If a change needs to be made to the application for insurance, the agent may do all of the following except

5 days

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

The beneficiary can only be changed with written permission of the beneficiary.

If a life insurance policy has been an irrevocable beneficiary designation,

3 years

In addition to penalties, fines, and possible imprisonment for violating the provision relating to misrepresentation, the Commissioner may suspend the license of such person for a period up to

taxable

The interest earned on policy dividends is

entire contract

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

preferred risks and poor risks are balanced, with average risks in the middle

To achieve the profitable distribution of exposures.

1. Respond to the consumer's complaint

Under the fair credit reporting act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must

Homogenous

Units with the same or similar exposure to loss are referred to as

The current interest rate at the time of surrender

What determines the penalty for surrendering a market value adjusted annuity prematurely?

Discontinuance (Discontinuance specifically is applied when regarding a group of employees, not an individual employee)

What is described as the termination of a plan of insurance between the insurer and the entire group of employees?

Old Age Survivors Disability Insurance

What is the official name for the social security program?

They can convert their coverage to permanent life insurance without evidence of insurability.

When the breadwinner that is insured by a family policy dies, what rights are provided to other family members that are covered under the policy?

The beneficiary must have insurable interest in the insured.

Which is NOT true about beneficiary designations?

Payor Benefit

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?

The medical portion of an application that asks for medical information but does not require a medical exam

Which of the following best describes a non-medical application?

The performance of the policy portfolio

Which of the following determines the cash value of a variable life policy?

Annuity certain

Which of the following is a short term annuity that limits the amounts paid to a certain fixed period or until a certain fixed amount is liquidated?

Life income ( The life-income option, also known as straight life, provides the recipient with an income that he or she cannot outlive. It pays the benefit while the beneficiary is alive; however, the payments stop at the beneficiary's death.)

Which of the following settlement options in life insurance is known as straight life?

They are usually qualified plans

Which of the following statements regarding deferred compensation funds is incorrect?

family contract

Which of the following types of insurance covers the whole family in a single contract?

diagnosis must indicate that death is expected within 3 years

all of the following are features and requirements of the living needs riders except

a separate account

For variable products, underlying assets must be kept in

Upon the last death

In a survivorship life policy, when does the insurer pay the death benefit?

Develop and implement laws to regulate the business of insurance

Of the following, which is NOT considered a general duty or power of State Insurance Commissioners?

unemployment income

Social security was created to provide all of the following benefits except

Universal Life

The Waiver of Cost of Insurance rider is found in what type of insurance?

The death benefit can be increased by providing evidence of insurability.

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

A statement by the applicant that, if discovered, would alter the underwriting decision of the insurance company

What is a material misrepresentation?

It is intended to provide coverage on a data prior to the policy issue.

What is the purpose of a conditional receipt?

1. The insured's contingent beneficiary

When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both, the insured, and the primary beneficiary, died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?

Distributions are taxable

When contributions to an immediate annuity are made with before-tax dollars, which of the following is true of the distributions?

at the time of application

When must insurable interest exists in a life insurance policy?

fixed amount

When the policyowner specifies a dollar amount in which installment are to be paid, he/she has a chosen which settlement option?

it permits the insured to return the policy for a full refund of premiums paid.

Which of the following applies to the 10-day free look privilege?

Reciprocal

Which of the following insurance options would be considered a risk-sharing arrangement?

To minimize the insured's level of liability in the event of loss

Which of the following is NOT a goal of risk retention?

admitted

Which of the following is another term for an authorized insurer?

binders prove that the insured has insurance coverage, even though the policy has not been issued yet.

Which of the following is true regarding written binders

The Fair Credit Reporting Act

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

Consumer report

Which of the following reports will provide the underwriter the information about an insurance applicant's credit?

A solicitor may act as an insurance agent at the same time

Which of the following statements is NOT true regarding an insurance solicitor in California?

1. A sign in an insurer's office

Which of the following would NOT be considered a form of direct response marketing?

Insureds cannot be randomly selected.

Which statement regarding insurable risks is NOT correct?

immediate

a man purchased a $90,00 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is this?

influence this information would have in forming an estate of the advantages or the disadvantages of the contract.

in determining how material a piece of information is to each party of a contract, the value is not determined by the event itself, but solely by which of the following?

california insurance code

in order to become an admitted, authorized insurer, what is the primary body of law about which an applicant company must be concerned?

Discontinuance

what is described as the termination of a plan of insurance between the insurer and the entire group of employees?

They are not included as income for the employee, but are taxable upon distribution

how are contributions to a tax sheltered annuity treated with regards to taxation?

Fixed Period

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

Joint Life annuity

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

generally not taxed as income

life insurance death proceeds are

if the representation is false in a material point.

the key factor of representation that allows the injrued party to rescind the contract is

credit life

the type of insurance sold to a debtor and designed to pay the amount due on a loan if the debtor dies before the loan is repaid is called

convertible term policy

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

installments for a fixed period

under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?

insurance

what do individuals use to transfer their risk of loss to a larger group

one-sided only one party makes an enforceable promise.

what is a definition of a unilateral contract

consideration

when an unsured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Indemnity

which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance

which of the following best describes the MIB?

Only the annuity owner

which of the following can surrender a deferred annuity contract

Cash Values

which of the following elements in an indexed universal life policy is tied to an index?

They have a guaranteed minimum interest rate.

which of the following is TRUE for both equity indexed annuities and fixed annuities?

THe insured is no longer covered under the surrendered policy.

which of the following is true if the policyowner exercise his or her right to surrender his or her life insurance policy for its current cash value? assume that the policyowner and the insured are the same person.

Morale

A person who does not lock the doors or does not repaid leaks shows an indifferent attitude. This person presents what type of hazard?

Independent agent

which of the following persons represents several insurance companies, but owns the records of the policies sold?

1. 30 days

Every policy of individual life insurance must include a notice of right to cancel the policy, stating the specific time frame for the free look period. Once the insured has cancelled the policy, within how many days must the insurer refund all premiums and policy fees?

The uncertainty or chance of loss

For the purpose of insurance, risk is defined as

100% participation of members is required in noncontributory plans.

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?

Jumping Juvenile Policy (While many policies provide a level death benefit, Jumping Juvenile policies provide a ow face amount in the early years and then increase, usually by 5 times the amount, when the insured reaches an age specified in the policy, usually age 21)

If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?

Establish minimum uniform standards for testing all applicants for insurance.

In order to determine whether to test an insurance applicant for HIV or AIDS, the insurer may do which of the following?

Risk-NOT LOSS

Insurance is the transfer of

Adhesion

Insurance policies are not drawn through negotiations, and an insured has little to say about its provisions. What contract characteristic

21 days

The department of insurance contacts an agent about a claim that was settled two months ago. Within what timeframe must the agent issue a complete response?

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

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

Annuity payments

Which concept is associated with "Exclusion ratio"?

Creditor requiring that a debtor buys insurance from a certain insurer

Which of the following is NOT allowed in credit life insurance?

Money borrowed from the cash value is taxable (money borrowed from the cash value is not taxable. Policy loans can be repaid at any time, including surrender and death. An insurer can charge interest on outstanding policy loans. )

Which of the following is NOT true regarding policy loans?

Temporary term

Written binders provide insurance before the policy is actually issues. The time period between the insurance of the binder and the policy's effective date is called

the interest is not taxable since it remains inside the insurance policy.

all of the following are true statements regarding the accumulation at interest option except

the financial rating of the insurer

all of the following must be specified in an insurance policy EXCEPT