Life & Annuity

It remains the same no matter how many children are added to the policy

Which of the following is true about the premium on the children's rider in a life insurance policy?

The owner is guaranteed a fixed interest rate for a specific period of time.

Which of the following is true regarding a market value adjusted annuity?

Dividends are not taxable.

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

The CEO of a private corportation

All of the following employees may use a 403(b) plan for their retirement EXCEPT:

An individual not covered by an employer-sponsored plan who has earned income.

Who can make a fully deductible contribution to a traditonal IRA?

5 years.

Life insurance policies may not include a provision that limits the time within which any legal action begin to less that what period of time after the claim for relief accrues?

false advertising

Misrepresenting an insurance policy as a share of stock is an example of which of the following?

insurance consultant

Which of the following licensees are not compensated directly related to the amount of insurance sold?

Straight life

Which of the following policies would be classified as a traditional level premium contract?

Incontestability Clause

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a speciffied period of time is known as the?

A group needing low-cost life insurance.

All of the following could own a group life insurance EXCEPT?

Annually Renewable Term policy with a cash value account.

A Universal Life Insurance policy is best described as a/an?

Joint and survior

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to recieve $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?

A copy of the original application for insurance.

According to the Entire Contract provision, a policy must contain?

Guaranteed surrender value

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

A 15-day notice of the conversion right

After a group policy terminated, the insured was not notified about his right to convert the coverage. What must the insurer offer?

4039(b) Plan (TSA)

An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a?

The interest will continue to accumulate tax deffered.

An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur?

$10,000, no tax consequence

An employee quits her job where she has a a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?

Adjustable life

At the 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?

Coercion

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as?

Not subject to income taxation by the Federal Government.

Death benefits payable to a beneficiary under a life insurance policy are generally?

Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59.5.

During the accumlation period in a nonqualified annuity, what are the tax consequnces of a withdrawal?

Are subject to vesting requirements

Employer contributions made to a qualified plan?

Employees.

For a retirement plan to be qualified, it must be designed for the benefit of?

1 year.

How many years after a policy is issued are restrictions of liability effective in the case of suicide?

A qualified plan for a small business.

If a company has a Simplified Employee Pension plan, what type of plan is it?

Guarenteed Insurability Rider (GIR)

If a life policy allows the policyowner to make periodic additons to the face amount at standard rates, without proving insurability, the policy includes?

With the policy

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delievered to the applicant?

An unfair trade practice

If an insurance company makes a statment that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered?

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

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

Misrepresentation

On its advertisment, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of?

Insurers

The North Dakota Life & Health Guaranty Assoication is designed to provided protection to all of the following EXCEPT?

Tax-deductible contributions

The advantage of qualified plans to employers is?

Lower

The premium of a surviorship life policy compared with that of a joint life policy would be?

Taxable

The interest earned on a policy dividends is?

The overdue premium with interest will be deducted from the death benefit.

The premium on B's individual life policy was due Sept. 1st. Unfortunately, B died as a result of a car accident on Sept. 30th. He had failed to pay the premium. Which of the following is true?

Wavier of Premium

The ride in a whole life policy that allpws the company to forgo collecting the premium if the insured is disabled is called?

SEC registrations

To sell variable life insurance policies an agent must recieve all of the following EXCEPT?

Joint life

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?

False Financial Statement

When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptacy. Which of the following terms best describes the advertisment?

3%.

When determining minimum nonfortfeirture amounts, what is the maximum annual percentage rate that may be applied?

It has a guaranteed minimum interest rate

Why is an equity indexed annuity considered to be a fixed annuity?

Single premium whole life

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

$3,000

An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At a policu surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?

Paid-Up Additions

An insured has a life insurance policy from a participating compnay and recieves 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?

The policy will terminate when the loan amount with interest equals or exceeds the cash value.

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?

The insurer

An underwriter questions whether a proposed policyowner has an insurable interest in a proposed insured. Who must verify the relationship?

Retirement plans

Annuities can be used to fund which of the following?

Flexible premium

Both Universal Life and Variable Universal Life have a?

Cease and desist order

If the state Insurance Dept. believes that a producer may be in violation of an insurance law or regualation, what may be issued?

The entire face value of the policy will be included in Jay's taxable estate.

Jay transferred his life insurance policy to his son two years before his death. Which of the following is true?

An undetermined percentage for each dollar contributed by the employee.

Under the 401(k) bonus or thrift plan, the employer will contribute?

Common Disaster Clause

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

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?

Funds exceeding the premium paid are taxable as ordinary income.

Which is TRUE about the cash surrender nonforfeiture option?

An applicant who is a smoker

Which of the following applicants could the insurer charge a higher rate of premium and not violate regulations regarding unfair discrimintion?

Net premium plus expenses

Which of the following best describes gross annaul premium?

Taxes are deferred.

Which of the following best describes taxation during the accumlation period of an annuity?

The period of time during which accumlated money is converted into income payments.

Which of the following best describes what the annuity period is?

The earnings in the plan accumlate tax deferred.

Which of the following describes the tax advanatge of a qualified retirement plan?

Policyowner

Which of the following individuals must have a insurable interest in the insured?

Distributions are made on a policy before age 59.5.

Which of the following scenarios will incur a 10% tax penalty on distributions?

Roth IRA

Which type of retirement account does not require the owner to start taking distributions at age 72?

Monthly premium waiver and monthly income

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

The contingent beneficiary

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to?

From trustee to trustee

In a direct rollover, how is the money transferred from one plan to the new one?

10 days.

Insurers usually must provide a buyer's guide and policy summary to prospective insured prior to accepting the initial premium. This rule does not apply if the policy contains an unconditional refund provision of at least?

Buy-Sell Agreement

All of the following are personal uses of life insurance EXCEPT?

Increased face amount at conversion to indivdual policy.

All of the following are required provisions in group life policies issued in this state EXCEPT?

The plan is funded by permanent insurance only

All of the following are true of a key person insurance EXCEPT?

Suggesting negotiations in settling the claim

All of the following are unfair claims settlement practices EXCEPT?

Dividends from a mutal insurer.

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT?

Illegal

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

Illegal under any circumstances

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

Until 2016. (4yrs)

An insurer used advertising materials in 2012. How long do these materials need to be maintained on file?

Decreases

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

The beneficiary

If the annuitant dies during the accumulation period, who will recieve the annuity benefits?

The beneficiary

In a group life insurance policy, the employer may select all of the following EXCEPT?

It determines if the insurance policy is a MEC. Figures out if its "over-funded".

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

6 months.

What is the maximum time period for backdating life insurance policies?

It is a level term insurance

Which of the following best describes annaully renewable term insurance?

A surplus lines insurance company

Which of the following insurers are NOT required to maintain membership in North Dakota Life and Health Guaranty Assoication?

Illustration regulations apply to all policies without exceptions.

Which of the following is NOT true regarding illustrations for life insurance policies?

The Deputy Commissioner

Who else is authorized to sign the Comissioner's name when the Comissioner is temporarily absent from the office?

Insurers

Who makes up the medical information bureau?

Section 1035 Policy Exchange

What part of the Internal Revenue Code (IRS) allows an ownder of a life insurance policy or annuity to exchange or replace their current contract without creating adverse tax consequences?

To lessen the risk of financial loss because of the death of a key employee

What is the purpose of key person insurance?

Surrendering the annuity for cash

What type of annuity activity will cause immediate taxation of the interest earned?

Disclose commissions earned from the sale of the policy

A producer agent must do all of the do all of the following when delievering a new policy to the insured EXCEPT?

Reciprocity

A producer in Kansas wants to become a producer in North Dakota. The Department will waive certain examination requirements, provided that Kansas would waive these same requirements if a North Dakota producer sought licensure in Kansas. What term is used to describe this phenomenon?

The payments will stop when the annuitant dies.

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

Employer contributions are not tax deductible.

All of the following statements are true regarding tax-qualified annuities EXCEPT?

$2,500

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

It is a life contingency option

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT?

It is approved by the IRS

If a retirement plan or annuity is "qualified," this means?

30 days

If an applicant is refused a license and wants a hearing to be held, within how many days must he or she request one?

Annuitization period

In an annuity, the accumlated money is converted into a stream of income during which time period?

Grow tax deffered

In life insurance policies, cash value increases?

Joint and Survivor

The type of settlement option which pays throughout the lifetimes of two or more beneficiares is called?

They are tax deferred until withdrawn.

Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?

Return of Premium

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 the premiums paid. Which rider is attached to the policy?

It has a tax benefit for both employer and employee

Which of the following is TRUE of a qualifed plan?

The annuitant assumes the risks on investment.

Which of the following is TRUE regarding a variable annuities?

It is a period during which payments into the annuity grow tax deffered

Which of the following is TRUE regarding the accumlation period of an annuity?

Keogh

Which of the following is an IRS qualified retirment program for the self-employed?

Survivorship life

Which of the following is called a "second-to-die" policy?

It insures the life of a debtor

Which of the following is correct regarding credit life insurance?

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 is true regarding a wavier of a surrender charge on an annuity contract?

Cost comparison methods

Which of the following is used to compare the cost of one life insurance policy against another in order to guide prosepective purchasers to policies that are competitively priced?

Pays dividends to policyowners

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

Graded Premium Whole Life

Which of the following policies is characterized by a provision where the premiums are lower in the early years of the policy and increase over time to a point where they become level for the remainder of policy?

Bail-out

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

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

Which of the following statements about group life is correct?

Standard risk is representative of the majority of people.

Which of the following statements is correct about a standard risk classifcation in the same age group and with similar lifestyles?

Withdrawls are not taxable

Which of the following statements regarding the taxation of a Modified Endowment Contracts is FALSE?

Life expectancy

Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortaility factors?

Creating an estate

Which of the following will NOT be appropriate use of deferred annuity?

Discriminating in benefits and coverages based on the insured's habits and lifestyle.

Which of the following will NOT be considered unfair discrimination by insurers?

Twisting

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?