Licensing

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

Which of the following methods to designate a beneficiary literally means "by the head?"

per capita

Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?

premiums are not tax deductible as a business expense.

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

purchase a single premium policy for a reduced face amount.

An insured committed suicide one year after his life insurance policy was issued. The insurer wil

refund the premiums paid

Which type of beneficiary is changeable at any point?

revocable

What is the main purpose of the Seven-pay Test?

It determines if the insurance policy is an Modified Endowment Contract

A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called

accelerated benefit provision

Which of the following would be covered by contract law?

an insured suing the insurer for failure to provide promised benefits.

What is the term for a sales campaign conducted through the mail?

direct response

The annuity owner 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.

If a policyholder contacts an insurance company about a claim and expects a response to the inquiry, within what span of time must the agent respond?

15 days

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

be fined a sum of $10,000

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

A key person insurance policy can pay for which of the following?

costs of training a replacement

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

creditor

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

distributions are taxable

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 and survivor

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

life income with period certain

Which of the following is NOT required on an illustration used in the sale of a life insurance policy?

the name of the primary and secondary beneficiaries

Which of the following products requires a securities license?

variable annuity

According to Insurance Code, it is an unfair or deceptive act in the business of insurance for an insurer to advertise insurance that it does not market. Such action is a violation of the code and will result in a fine up to

x

All of the following are true of key person insurance EXCEPT

x

As it pertains to IRA eligibility, which of the following would NOT be considered earned income?

x

Credit Life insurance

x

Which of the following best describes fixed-period settlement option?

both the principal and interest will be liquidated over a selected period of time.

Which of the following is NOT 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

A policy which pays monthly income upon the death of the breadwinner for a predetermined number of years after death, plus a lump sum at death, and combines level term and whole life is known as which policy?

family maintenance

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

if the father is disabled for more than 6 months

A domestic insurer issuing variable contracts must establish one or more

separate accounts

The Commissioner of Insurance supervises and regulates the insurance affairs in the State of California, and is chosen by

the people

In terms of parties to a contract, which of the following does NOT describe a competent party?

the person must have at least completed secondary education.

All of the following are general requirements of a qualified plan EXCEPT

the plan must provide an offset for social security benefits.

All of the following are true about variable products EXCEPT

the premiums are invested in the insurer's general account.

What is the purpose of a fixed-period settlement option?

to provide a guaranteed income for a certain amount of time.

An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?

material misinterpretation

An insurance agent is planning to give out his business cards to prospective clients to solicit some insurance business. On the business card, the agent's name appears in font size 16, the phone number is in font size 14, and the business address is in font size 10. What font size should be used for the agent's license number?

x

When must insurable interest exist in a life insurance policy?

x