life guaranteed exam
The premium is based on the age of each insured.
All of the following are true of the Survivorship Life policy EXCEPT
Grace period
An insured bought an insurance policy that requires him to pay $150 in premiums on the 15th of each month. He then takes an extended vacation and forgets to pay the premium. Ten days later, his policy is still in effect and has not lapsed. Which policy provision allowed for this?
Waived of premium rider
Because of an injury, an insured has been unable to work for 9 months. He paid the policy premium for his life insurance for the first 6 months of disability, but didn't have to pay anything for the remaining 3 months, yet the policy remained in force. The policy includes
Higher.
During the accumulation phase of a fixed annuity, the annuitant's interest rate is based on a minimum rate as specified in the contract, or the current interest rate, whichever is
20 hrs
How many hours of prelicensing education are required for an insurance agent license?
Surrender charge
In a deferred annuity, the difference between the accumulation value and the surrender value is the
Mikes estate
Mike named his wife Lisa as primary beneficiary of his life insurance policy. No contingent beneficiary was named on the policy. Mike and Lisa then divorced. Mike died 5 years later, but never changed the primary beneficiary on his policy. Who will receive the benefits from Mike's policy?
6 months
Policy loan requests, except for a loan requests for payment of due premiums, may be deferred for a period of up to
The average age and the ratio of men to women
What is the cost of coverage based on for group life insurance?
Number of beneficiaries
Which of the following is NOT a component of an insurance policy premium?
6 months
A life insurance policy can be backdated to affect a lower premium for up to a maximum of
Continue to increase.
A whole life policy is surrendered for a reduced paid-up policy. The cash value in the new policy will
dividends
An insured purchases a nonparticipating whole life policy. This policy includes all of the following EXCEPT
The Director
An insurer establishes a new rate for its group insurance policies. Which of the following authorities is in charge of approving the change?
24
How many hours of continuing education must licensees complete during each licensing period?
Free of federal income taxation
How will life insurance proceeds that are paid as a lump sum received by the beneficiary?
It satisfies IRS requirements for favorable tax treatment.
If a retirement plan or annuity is qualified, this means
Express aûthority.
If an agent follows the rules and terms of his agent contract, he is exercising his
The interest is taxable.
If the annuitant dies before the annuity start date, which of the following is true?
Only one party makes a promise.
Insurance contracts are unilateral in nature. What does that mean?
Certificate of Authority.
Insurers CANNOT transact insurance in this state without a
Pay the death benefit to the estate of the insured.
Key person insurance can provide protection for all of the following economic losses to a business EXCEPT
The face value of the policy is payable to the beneficiary upon the death of the insured.
Life insurance creates an immediate estate. Which of the following best explains this statement?
Fiduciary
Premiums collected on behalf of the insurance company by an agent will be held in what capacity?
Larger
Statistical probabilities of loss for a particular class of insureds is best predicted when the insured group is
180 days
The Director may issue a temporary producer's license that lasts for a maximum period of
Purchase of a new home.
The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT
The interest is taxable.
The annuitant dies before the annuity start date, which of the following is true?
buyers guide
The entire contract includes all of the following EXCEPT
Taxed as ordinary income.
Upon the surrender of a life insurance policy, any cash value accumulated in excess of the premium payments is
As a fiduciary
When agents, brokers, or solicitors handle premiums for an insurer, they are acting in which capacity?
Whole life without proof of insurability.
When an insured terminates membership in the insured group, the insured can convert to
In joint life option, the benefits stop after the first death.
Which of the following best describes the difference between joint life and joint and survivor annuity payment options?
Attending Physician's Statement (APS)
Which of the following documents used in the underwriting process contains specific medical details about an applicant?
Annuitant
Which of the following indicates the person upon whose life the annuity income amount is determined?
Community service
Which of the following is NOT a penalty for violations of state insurance laws?
Accidentally misstating the date of birth on an insurance application
Which of the following is NOT considered a fraudulent insurance act?
it is temporary protection.
Which of the following is TRUE of level term insurance?
The application contains material misstatements.
Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application?
Minimum death benefit
Which of the following is guaranteed under a variable whole life insurance policy?
Insurance application
Which of the following is the primary source of information that an insurer uses to evaluate an insured's risk for life insurance?
The payments stop at the first death.
Which of the following is true regarding a joint life annuity?
Death caused by a head-on collision.
Which of the following losses would likely be covered under the Accidental Death rider?
The Medical Information Bureau assists underwriters in evaluating and classifying risks.
Which of the following statements concerning the Medical Information Bureau is correct?
An MEC must always pass the 7-pay test.
Which of the following statements is INCORRECT concerning Modified Endowment Contracts (MECs)?
It provides the agent's personal observations concerning the proposed insured.
Which of the following statements is TRUE regarding an Agent's Report during the policy application process?
Both guarantee that the principal and interest will be fully paid out.
Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options?
Interest earned on principal
Which portion of a nonqualified annuity payment is taxable?
standard
Which risk classification is representative of the majority of people in a certain age group and with similar lifestyles?
Joint and Survivor
Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select?
60 days
distribution from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvested in an IRA within
The interest rate will never drop below the guaranteed minimum.
if an annuity has a guaranteed minimum interest rate, this means
Cash surrénder values.
in a variable life insurance policy, all of the following assets are held in the insurance company's general account EXCEPT
The beneficiary
in life insurance, which of the following is NOT required to have an insurable interest in the
Single premium policy.
whole life policy that will generate immedlate cash value is a
Use it for emergency expenses
Considering the principles of liquidity, how would the policyowner use today's cash values in a life insurance policy?
$300,000
What is the maximum amount the Insurance Guaranty Association will pay in benefits to any one individual (unless the benefits are for basic hospital, medical, and surgical insurance and major medical insurance)?
Joint Life
What is the most common name for a single policy that is designed to insure two or more lives with a standard premium, and that pays the death benefit upon the first death?
To compensate the company for loss of investment value
What is the purpose of the surrender charge in a deferred annuity?
10%
What is the tax penalty for withdrawing money from an annuity prior to age 59 ½/?
Reciprocal insurers
What type of insurer uses a formal sharing agreement?
Extended term
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?
It is an unfair trade practice to mention the Association in advertisements.
Which of the following statements is TRUE regarding advertising that the Insurance Guaranty Association would ensure payment of benefits in the event of insurer insolvency?
Cost Base
Which of the following terms refers to the nontaxable portion of each annuity benefit payment?
Being permanently disabled
Which of the following would NOT trigger the payment of Accelerated Death Benefits?
The license will be changed to nonresident without any fees or additional applications.
A licensed agent moves to another state on March Ist. He notifies the Director of the change of address on March 15 and requests a nonresident license. Considering that all other requirements are met, which of the following is true?
if licensed for more than 5 years and if viatical settlement activities are incidental to the agent's insurance transactions
A life insurance agent may transact viatical settlement contract under what circumstances?
An automobile accident
A loss resulting from which of the following would qualify for the accidental death rider (coverage?
Payor benefit
A married couple purchase a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either one of them were unable to continue making the premium payments due to death or disability. Which policy rider should their agent recommend?
The primary beneficiary died before the insured.
According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?
The insureds each own their own contract.
All of the following are true of group life insurance EXCEPT
Occupation
Among the applicants in the same class and life expectancy, which of the following factors can be used to determine premium rates?
Cash
An IRA contribution can be made from which of the following?
10%
An IRA owner who is 57 ears old wants to make a withdrawal from her traditional IRA. What penalty will be imposed?
Either term insurance or permanent insurance.
An adjustable life policy can assume the form of
Provide income for retirement.
An annuity would normally be purchased by an individual who wants to
Convert to a whole life policy for the same face amount without proof of insurability.
An individual has a $200,000 convertible term life insurance policy. If he chooses, he can
Revocable
An individual purchases a life insurance policy and lists his parents as the beneficiaries. He is able to change beneficiaries at any time. What type of beneficiary designation does the policy have?
Independent Agency System
An insurance agent who represents multiple companies on a nonexclusive basis and earns commissions on personal sales is working in what kind of marketing system?
Children's term rider
An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount?
The difference between the premiums paid and the cash value
An insured decides to surrender his Whole Life insurance policy. The cash value at surrender is higher than the premiums paid into the policy, due to interest. What part of the surrender value would be income taxable?
Waiver of premium rider
Because of an injury, an insured has been unable to work for 9 months. He paid the policy premium for his life insurance for the first 6 months of disability, but didn't have to pay anything for the remaining 3 months, yet the policy remained in force. The policy includes
Defamation
During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of
Rescinded.
If a viator dies within the 15-day rescission period, the viatical settlement agreement is deemed to be
Retention
If an insured purchases an insurance policy with a large deductible, what risk management technique is the insured exercising?
The home office underwriter.
In a life insurance application, all of the following signatures will be required EXCEPT
Unfair discrimination
Two individuals of the same age, health status, and life expectancy apply for individual insurance coverage. When policies are issued by the same insurer, the premium rates are different based on the insured's race. What practice does this describe?
If there is a transfer for value
Under which of the following conditions would life insurance proceeds be taxable by the federal government?
A warranty
What guarantees that the information explained in the insurance contract is true?
The annuity benefit to be excluded from taxes.
What is the exclusion ratio used to determine?
To cover funeral expenses
What is the main reason for purchasing an industrial life policy?
