Life EXAM

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

$30,000

An insurance agent is planning to give out his business cards to prospective clients to solicit some insurance. What font size?

10

An agent has how many days in which to receive an appointment after the issuance of an insurance contract?

14 days

how many hrs of continuing education must agents complete each licensing term

24

According to the code, how many separate requirements should an insurance policy have

6

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

What is the penalty for excessive contributions to an IRA?

6%

The term "illustration" in a life insurance policy refers to

A depiction of policy benefits and guarantees

In insurance, an offer is usually made when

An applicant submits an application to the insurer

The LEAST expensive first year premium is found in which of the following policies?

Annually renewable term

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

Employer contributions made to a qualified plan

Are subject to vesting requirements

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

Be fined a sum of $1,000

All of the following statements are correct regarding credit life insurance except

Benefits are paid to the borrowers beneficiary

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner

Cash surrender

The proposed insured makes the premium payment on a new insurance policy. if the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?

Conditional

All of the following statements are true of a non qualified retirement plan EXCEPT

Contributions are tax exempt

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called

Cost of living rider

Which of the following is not a legitimate use of annuities by businesses

Creating a tax shelter

How often must every insurer doing business in California report it's financial condition to the Commissioner?

Each year, on or before March 1

Selection of coverage in employee benefits plans refers to

Employee choosing benefits

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

Erase the incorrect answer and record the correct answer

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

Family policy

in life insurance policies, cash value increases

Grow tax deferred.

Which of the following life insurance policies does not build cash value?

Guaranteed universal life

Which of the following is true regarding a policy with a face value less than $10,000

If its returned during the free look period, the agreement will be void

An individual purchased life insurance policy on his life naming his wife as his primary beneficiary, and their daughter as contingent beneficiary. Under what circumstance could the daughter collect the death benefit?

If the primary beneficiary predeceases the insured

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

If the representation is false in a material point

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

It is a life contingency option

Which of the following is true regarding a single life settlement option

It provides income the beneficiary cannot outlive

?What happens to a corporation license if the corporation is dissolved

It terminates.

Which of the following statements best describes the effect the Accelerated Benefit provision would have on the benefits paid to the beneficiary

It will decrease the benefits paid to the beneficiary

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

Life income

An applicant who receives a preferred risk classification qualifies for

Lower premiums than a person who receives standard risk

Which of the following premium modes would result in the highest annual cost for an insurance policy

Monthly

When calculating the amount a policy owner may borrow from a variable life policy, what must be subtracted from the policy cash value?

Outstanding loans and interest

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

Policyowner

To achieve the profitable distribution of exposures

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

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up

The policy owner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividend to help pay for her next premium. What option would allow her to do this?

Reduction of premium

insurance is the transfer of

Risk of loss

Which two terms are associated directly with the way an annuity is funded?

Single payment or periodic payments

All of the following are reasons an insurer or an insured would have the right to rescind a policy except

The amount of paid claims exceeds the premiums paid

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction

If any individual submits a written request to an insurance company requesting access to their recorded personal info, all of the following requirements are true EXCEPT

The company will forward all necessary correspondence within 60 days from the date a request is received

In an Adjustable Life policy can change which of the following policy features

The coverage 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 insureds premiums will be waived until she is 21

Which of the following does NOT need to be identified in an insurance policy

The insurers financial rating

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract

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

The performance of the policy portfolio

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

They are usually qualified plans

Why should the producer personally deliver the policy when the first premium has already been paid

To help the insured understand all aspects of the contract

Which of the following is NOT a goal of risk retention

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

the paid up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy

During the free-look period, the premium for a variable annuity may be invested in all of the following EXCEPT

Value funds

Which of the following types of policies allows for a flexible premium and a variable investment component?

Variable universal life insurance

In forming an insurance contract, when does acceptance usually occur?

When an insurers underwriter approves coverage

The violation of a material warranty or other material provision of a policy allows

both the insurer and the insured to rescind

The act of revoking or terminating an insurance policy is called

cancellation

what does liquidity refer to in life insurance policy

cash values can be borrowed at any time

a tax sheltered annuity is a special tax favored retirement plan available to

certain group of employees only

an insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable

conditional

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

consideration

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called

cost of living rider

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

creditor

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

decreases

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

direct response

In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?

executive is the owner and the executive pays the premium

What type of premium do both Universal Life and Variable Universal Life policies have?

flexible

what is true about the cash surrender and nonforfeiture option?

funds exceeding the premium paid are taxable as ordinary income

the automatic premium loan provision is activated at the end of the

grace period

What kind of policy issues certificates of insurance to insureds?

group insurance

which of the following is true regarding a policy with a face value less than $10,000

if it is returned during the free look period it can be void

Stranger - oriented life insurance policies are in direct opposition to the principal of

insurable interest

which of the following is correct regarding credit life insurance

it insures the life of a debtor

which of the following best describes annually renewable term insurance

it is level term insurance

which of the following is true regarding the annuity period

it may last for a lifetime of the annuitant

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?

jumping juvenile policy

the growing tendency of individuals to file lawsuits and to claim tremendous amounts of alleged damages is known as

legal hazard

the premium of a survivorship life policy compared with that of a joint life policy would be

lower

one of the advantages of family life insurance policy that provides coverage for children is that

may be converted to permanent insurance for the children without requiring evidence of insurability

which of the following is not true regarding policy loans

money borrowed from the cash value is taxable

the dividend option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the

one year term option

Which of the following allows the insurer to relieve a minor insured from premium payments if the minors parents have died or become disabled

payor benefit

Regarding the taxation of Business Overhead policies,

premiums are deductible and benefits are taxed

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 intentional or unintentional concealment entitles the affected party to which of the following

rescission of a contract

If an agent wishes to sell variable life policies, what license must the agent obtain?

securities

The premiums paid by the employer in a business life insurance policy are

tax deductible by the employer

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

the beneficiary

If a life insurance policy has an irrevocable beneficiary designation,

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

the policy owner of an adjustable life policy wants to increase the death benefit

the death benefit can be increased by providing evidence of insurability

When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is this money placed?

the insurance company general account

All of the following are true of key person insurance except

the plan is funded by permanent insurance only

Under an extended term nonforfeiture option, the policy cash value is converted to

the same face value amount as in the whole life policy

what type of account will most likely be established for a minor

trust

which of the following types of policies allows for a flexible premium and a variable investment component

variable universal life insurance