Life insurance all sections
A life insurance policyowner has _______ days to return the policy and receive a full premium refund.
10
Which of the following types of Term Life polices most likely contains a renewability feature?
10 Year Convertible Term
A non-contributory plan requires _____________ participation of all eligible employees.
100%
A producer must complete _______ hours of continuation education biennially.
12
How many days is a temporary producers license valid?
180 days
Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated?
1970 - Fair Credit Reporting Act
What is the contestability period for life insurance policies in Kansas?
2 years
A producer must notify the Commissioner of a change of address within ________ days.
30 days
What's the MINIMUM grace period for an individual life insurance policy issued in KANSAS?
30 days
One becomes eligible for Social Security disability benefits after having been disabled for:
5 MONTHS
Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?
5 Months
What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?
50%
According to the Nonforfeiture Law, what's the MAXIMIM number of months a cash surrender value payment may be deferred by an insurance company?
6
An insurer may normally delay the payment of a cash value loan or surrender value for up to
6 months
How long does an individual have to "rollover" funds from an IRA or qualified plan?
60 Days
A life policy loan in KANSAS cannot charge a fixed rate of interest higher than
8%
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its own members is known as:
A Fraternal Benefit Society
Which of these is NOT a reason for a business to buy key person life insurance?
A pension deficiency if the key employee dies
Before a life policy is issued, which of these contract elements is necessary?
A signed application by the prospect
What does the ownership clause in a life insurance policy state?
Who the policyowner is and what rights the policyowner is entitled to
If a 10-Year Term Life policy contains a Renewability provision, the policy will renew:
Without evidence of insurability
A Nonforfeiture clause gives the policyowner
guaranteed values even if the policy has lapsed
Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary?
All proceeds are income tax free in the year they are received
Which type of contract liquidates an estate through recurrent payments?
Annuity
When can a policyowner change a revocable beneficiary
Anytime
Traditional individual retirement annuity (IRA) distributions must start by:
April 1st of the year following the year the participant attains age 70 1/2
What action can a policyowner take if an application for a bank loan requires collateral?
Assign policy ownership to the bank
At what time must a policyowner have have insurable interest on the the insured in order for the life policy to be valid?
At the time of application
S has a Whole life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?
Automatic Policy Loan
Which of the following id a requirement to attain a nonresident producer license?
Be licensed as a producer in the producer's state of domicile
A life insurance application must be signed by all these EXCEPT:
Beneficiary
T is the policyowner for a Life Insurance Policy with an Irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the:
Beneficiary
All of the following are considered to be typical characteristics describing the nature of insurance contact, EXCEPT:
Bilateral
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
Contributory
What group term life feature permit an individual to depart from the group and continue to be covered without providing any evidence of insurability?
Conversion
Which of the following features of a group Term Life policy enables an individual to leave the group and continues his or hers insurance without providing evidence of insurability
Conversion Privilege
What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of coverage?
Convertible Term
A Universal Life Policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, expense charges and the
Cost of insurance
KANSAS' 10-day Free-Look period for life insurance policies begins at the
Date of Delivery
K has a life insurance policy where her husband is the beneficiary and her daughter is contingent beneficiary. Under the Common Disaster Clause, if K and her husband are both killed in an automobile accident, where would the death benefit proceeds be directed?
Daughter
The combination of Whole Life and _____________ Term insurance is referred to as a Family Income Policy.
Decreasing
Additional coverage can be added to a Whole Life policy by adding a:
Decreasing Term
Additional coverage can be added to a Whole Life Policy by adding a(n):
Decreasing Term Rider
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. which type of annuity did P purchase?
Deferred
A ____________ ______________ is the signed document that starts the free-look period.
Delivery Receipt
An employees requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?
Distribution is subject to federal tax withholding
A variable insurance policy:
Does not guarantee a return on its investment accounts
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. if the agreement is funded with individual life insurance, what would it require?
Each partner must own a policy on the other partners
Two partners own equal shares in a business worth a total of $1,000,000. I f they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE?
Each partner owns a $500,000 policy on their partners life
The Commissioner of Insurance attains office by:
Election a 4 year term
Under a trustee group life policy, who would be eligible for a certificate of coverage
Employee
What provision in a life insurance policy states that the application is considered part of the contract?
Entire Contract provision
S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product will S be advised to purchase?
Equity Index Insurance
Life Insurance Replacement can be defined as:
Exchanging an existing policy into a new policy
D owns a Whole Life Policy that was purchased 10 years ago. If the premium payment suddenly stop and D takes no additional action, which Nonforfeiture Option will the insurer likely proceed with?
Extended Term
Which of the following Nonforfeiture options offers the highest death benefit?
Extended Term
Which of the following is NOT a required provision in an individual life policy?
Extended Term
An underwriter determines that a life insurance applicant's risk should be reclassified due to a health issue. this policy may be issued with a:
Extra Premium
What does the Face Amount Plus Cash Value Policy supposed to pay at the insured's death?
Face amount plus the policy's cash value
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?
Family Maintenance Policy
Which of these is NOT a source of funding for Social Security Benefits
Federal Government
The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own?
Flexible Installment Deferred
The purpose of the ______________ Period clause is to avoid an unintentional lapse of a life insurance policy.
Grace
Under a Group Life Policy, which of theses is considered to be a standard provision of the conversion privileges
Group Life coverage can be converted to an individual policy at regular rates on a attained-age basis
Which requirement must be met for an association to be eligible for a group life plan?
Group was formed for a purpose other than aquiring insurance
The type of annuity that can be purchased with one monetary deposit is called a
Immediate annuity
All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT:
Income derived from the TSA is received income tax-free
At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing plan and then deposits this amount into a personal savings account. this action would result in:
Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan
A 55 year old recently received a $30,000 distribution from a previous employer's 401K plan, minus $6,000 withholding. which federal taxes apply if none of the funds were rolled over?
Income taxes plus a 10% penalty tax on $30,000
T age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?
Income that cannot be outlived by the owner
Which of the following is best described as "an insurance advertisement that tends to make a prospect want to find out more about a specific policy"
Institutional Advertisement
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have:
Insurable interest in the proposed insured
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?
Insured
All of these statements about the Waiver of Premium are correct, EXCEPT:
Insured must be eligible for social security disability for a claim to be accepted
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?
Insured's contingent beneficiary
Variable annuities may invest premiums in each of the following, EXCEPT:
Insurer's corporate business account
In a Life insurance contract, an insurance company's promise to pay stated benefits is called the:
Insuring Clause
All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT
Interest Only
How are policyowner dividends treated in regards to income tax?
Interest on accumulations is taxed
A life insurance arrangement which circumvents insurable interest statues is called
Investor-Originated Life Insurance
Which of these arrangements allows one to bypass insurable interest laws?
Investor-Originated Life Insurance
A policyowner's rights are limited under which beneficiary designation?
Irrevocable
Dividends paid from a life insurance policy are:
Issued by the insurer
What is the purpose of a Policy Summary
It highlights the critical parts of the policy issued
Which statement regarding third-party ownership of a life insurance policy is true?
It is used extensively in estate-planning as well as business circumstances
A sole proprietor may use this plan ONLY if the employees of this business are included.
Keogh Pension Plan
K is looking to purchase Renewable Term insurance. which of these types of term insurance may be renewable?
Level
D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. what kind of policy is needed?
Level Term
T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving any payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?
Life Annuity with Period Certain
Which of these are NOT an example of a Nonforfeiture option?
Life Income
The Accelerated Death Benefit provision in a life insurance policy is also known as a:
Living Benefit
An employer that offers a qualified retirement plan to its employees is eligible to:
Make tax-deductible contributions to the plan
A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid:
Mandatory income tax withholding on the transfer amount
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the:
Marital Deduction
A life insurance policy will frequently contain an Accelerated Benefits Rider. which of these would be an example of a "qualifying event" under this rider?
Medical condition that will significantly reduce a lifespan
Which Unfair Trade Practice involves a producer suggesting that an insurance policy is like a share stock?
Misrepresentation
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?
Modified Whole Life
Which of these products is NOT considered interest-sensitive?
Modified Whole Life
Which of these is NOT an element of Life insurance premiums?
Morbidity Rate
Which of the following is TRUE about a Qualified Retirement that is "top heavy"?
More than 60% of plan assets are in key employee accounts
Which is not an element of an insurance contract?
Negotiation
M had an annual life insurance premium payment due January 1. she dies on January 10 without making the premium payment. what action will the insurer take?
Pay face amount minus the past premium
An insurance company has discovered, at the time of an insured's death, that the insured's age was misstated on the application. which of the following action would most likely be taken by the insurance company?
Pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age
Which of these statements concerning an Individual Straight Life Annuity is accurate?
Payments are made to an annuitant for life
A father who dies within 3 years after purchasing a life insurance police on his infant daughter can have the policy premiums waived under which provision?
Payor Provision
Insurance policies are considered aleatory contacts because they are?
Performance is conditioned upon a future occurrence
Which of the following best describes a contingent beneficiary?
Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured.
When an employee is terminated, which statement about a group term life conversion is true?
Policy proceeds will be paid if the employee dies during the conversion period
On a life insurance policy, who is qualified to change the beneficiary designation?
Policyowner
Which type of these describes a participating insurance policy?
Policyowners are entitled to receive dividends
Under federal tax laws, what is the tax treatment for an employer providing $50,000 of contributory group Term Life Plan to all its eligible employees?
Portion of the premiums paid for by the employer may be a tax deduction
All of the following statements are true regarding a policy's Grace Period, EXCEPT:
Premiums are waived
Which of the following actions is NOT possible with a Universal Life Policy?
Premiums may be applied as a credit against income tax
What determines the full amount of Social Security retirement benefits a qualified individual entitled to receive?
Primary Insurance Amount (PIA)
Which of these is NOT a type of agent authority?
Principal
A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. which of the following will occur when the insured dies
Proceeds will go to the contingent beneficiary
A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. which of the following will occur when the insured dies?
Proceeds will go to the contingent beneficiary
Which of these provisions require proof of insurability after the policy has lapsed?
Reinstatement
A statement made by the insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as:
Representation
Statements made on an insurance applications that are believed to be true to the applicants best knowledge are called?
Representation
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
Request of the change will be refused
Why must an insurance applicant answer all questions on the application?
Statements and representations on the application are part of the consideration for issuing a policy
The annuity that represents the largest possible monthly payment to an individual annuitant is a:
Straight Life Annuity
The annuity that represents the largest possible monthly payment to an individual annuitant is an
Straight life annuity
The premiums paid by an employer for his employee's group life insurance are usually considered to be:
Tax deductible by the employer
Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE?
Taxed as ordinary income
Q is looking to buy a life insurance policy that will provide the greatest amount of protection for a temporary time period. which of these polices should Q purchase?
Term Life
A group life insurance policy may be converted to an individual policy under which circumstance?
Termination of employment
The investment gains from a Universal Life Policy usually go towards:
The Cash Value
The Consideration Clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and:
The Initial Premium
A policy of adhesion can only be modified by whom?
The Insurance Company
During the course of an insurance business transaction, who does the producer legally represent?
The Insurance Company
Who has the right to change a revocable beneficiary?
The Policyowner
Which of the following statements is CORRECT about an agent who is taking an insurance application?
The agent should have the applicant initial any changes made on the application
K is an agent who takes an application for individual life insurance and accepts a check from the client. he submits the application and check to the insurance company, however the check was never signed by the applicant. if the application is approved, when will coverage be effective?
The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured
Whole Life insurance is sometimes referred to as "straight Life". What does the word "Straight" indicate when using this phrase?
The duration of premium payments
What is the underlying concept regarding level premiums?
The early years are charged more than what is needed
What is the underlying concept regarding level premiums?
The early years charged more than what is needed
A noncontributory group term life plan is characterized by:
The entire cost of the plan is paid for by the employer
J chooses a monthly premium payment mode on his Whole Life insurance policy. which of these statements are correct?
The gross premium is higher on a monthly payment mode as compared to being paid annually
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?
The gross premium is higher on a monthly payment mode compared to being paid monthly
Under a Graded Premium Whole Life policy,
The premium increases each year during the early years of the contract and remains the same after that time.
The advantage of reinstating an original life policy is
The premiums are based on a younger age
S is a life insurance policyowner and enters into a written agreement to receive immediate cash in exchange for the sale and transfer of her life insurance policy. This agreement is referred to as a(n)
Viatical Agreement
A life insurance policyowner may sell their policy to a(n) ____________ in order to receive a percentage of the policy's face value.
Viatical Settlement Provider
The part of a life insurance policy guaranteed to be true is called a?
Warranty
At what point does an informal agreement become a blinding contract?
When consideration is provided by one of the parties of the contract
When does a life insurance contract become effective if the initial premium is not collected during the application process?
When does a life insurance contract become effective if the initial premium is not collected during the application process?
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. when will the policy became effective?
When the conditions of the receipt are met
When is the face amount of a Whole Life policy paid?
When the insured dies or at the policy's maturity date, whichever happens first
An example of rebating would be:
returning a portion of a premium as inducement to purchase insurance
Life insurance replacement regulations protects the interest of?
the policowner
Under a Graded Premium Whole Life policy,
the premium increases each year during the early years of the contract and remains the same after that time
Term Life Policies that have the ability to be converted to permeant coverage may do so during a specific time period. this conversion period:
varies according to the contract
Which of the following is NOT included in an annuity contract?
AD&D Rider
All are true statements regarding the underwriting process, EXCEPT:
AIDS and HIV virus exams can be conducted in a discriminatory fashion
Which provision is NOT a requirement in a group life policy?
Accidental
Which of the following is NOT a required provision in a group life policy?
Accidental Death and Dismemberment
A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of:
Adhesion
L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of age provision, the insurer will:
Adjust the death benefit to a reduced amount
At what point may a producer sell products for an insurance company?
After being appointed by the insurer
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid the $500,000. This exchange of unequal values reflects which of the following insurance contract features?
Aleatory
All individuals covered under a group contract will receive a(n)
Certificate
What does the KANSAS LIFE and HEALTH INSURANCE GUARANTY ASSOCIATION provide?
Claim payments of admitted, insolvent insurance companies
How do life insurance companies handle cases where the insured commits suicide within the contracts stated Contestable Period?
Claims are denied under the Suicide Clause of the policy
Terry the insurance producer works for a mortgage company. He agrees to grant a loan ONLY if the applicant were to purchase insurance for him. Terry has committed the unfair practice of
Coercion
Which of these actions is taken when a policyowner uses a Life insurance policy as collateral for a bank loan
Collateral Assignment
On August 6, D submitted an application for a $50,000 Life insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some test were given by the doctor. the life policy was delivered by the producer on august 20 and D explains what had recently taken place with the doctor. what action should the producer then take?
Collect initial premium and along with a signed health statement
T is given a receipt after completing a life insurance application and paying the initial premium. Under this situation, T's coverage is
Conditional, depending on the insurer's underwriting guidelines
Which of the following activities does NOT give a producer credit for continuation education?
Conducting a sales meeting
Which of these require an offer, acceptance, and consideration?
Contract
Which statement is true regarding a minor beneficiary?
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
What must a producer sign when an existing life insurance policy is being reissued with a reduced cash value?
Notice Regarding Replacement
All of these statements concerning Settlement Options are true, EXCEPT:
Only the beneficiary may select
The Commissioner of Insurance may issue a(n) __________ to assure compliance with the law.
Order
P and Q are married and have three children. P is the primary beneficiary and Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident, Q an R are killed instantly. The Accidental Death benefits will be paid to:
P only
K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she chose?
Paid-up additional Insurance
Whole Life insurance polices are contractually guaranteed to provide each of the following EXCEPT:
Partial withdrawal features beyond a surrender charge period
When a policy pays dividends to its policyholders, it is said to be
Participating
Which statement is TRUE in regards to a policy loan?
Past-due interest on a policy loan is added to the total debt
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a
Risk Retention Group
Which of the following is NOT an example of "conducting insurance business"?
Selling stock
Which of the following individuals is NOT exempt from producer license requiremnts?
Semi-retired producer
P is a producer who notices 5 questions on the life application were not answered. what actions should P take?
Set up a meeting with the applicant to answer the remaining questions
Which of the following is NOT considered rebating?
Sharing commissions with a producer Licensed in the same line of business
An immediate annuity consist of a:
Single Premium
S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?
Single premium
What is OLD AGE and SURVIVORS HEALTH INSURANCE (OASDHI) also known as?
Social Security
All of theses statements about Equity Indexed Life Insurance are correct, EXCEPT:
The premiums can be lowered or raised, based on investment performance
Stranger-Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a:
Third-party with no insurable interest
All of these are considered to be a benefit under Social Security, EXCEPT for:
Unemployment
In an insurance contact, the insurer is the only party who makes a legally enforceable promise. what kind of contract is this?
Unilateral
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of a contract is this?
Unilateral
Life and Health Insurance polices are:
Unilateral Contracts
K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as a(n) _________ life policy.
Universal
The Free-Look provision begins
Upon receipt of the policyowner
What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?
Variable
Life insurance immediately creates an estate upon the death of an insured. which of the following polices is characterized by a guaranteed minimum death benefit?
Variable Life