Life Insurance
Costs of training a replacement
A key person insurance policy can pay for which of the following?
Required a premium increase each renewal.
A man decided to purchase a $100,000 Annually Renewable Term Life Policy to provide additional protection until his children finished college. He discovered that his policy..
Increasing Term is a type of TERM INSURANCE
There are several types of whole life polices. The first three, Straight life, limited payment, and single premium, are the basic forms of whole life.
Key Person Insurance
There is no limitation on the number of key employee plans in force at any one time, the employer is the owner, Payor and beneficiary of the policy, the key employee is the insured.
Taxation of accelerated benefits under a life insurance policy
They are tax free to terminally ill insured
Fixed period
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
The customer's associates, friends, and neighbors provide the report's data
In comparison to consumer reports, what best describes a unique characteristic of investigate consumer reports?
Grow tax deferred
In life insurance policies, cash value increases
Suicide is excluded for a specific period of years and covered thereafter
In most states, if death results from suicide within a certain period, the insurer is not obligated to pay the death benefit therefore..
Certificate of Authority
In order for an insurer to legally transact insurance, it must obtain what?
Investigations
In order to enforce the insurance code the commissioner has the power to conduct which of the following?
5 years
In order to qualify for conversion from a group life policy to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?
Be licensed as an insurance producer
In order to receive a commission, a person is required to...
Premiums paid by an employer on a $30,000 group term life insurance plan for employees
In which instance would the premium be tax deductible?
It is never legal to limit coverage based on marital status
In which of the following situations is it legal to limit coverage based on marital status?
Premium amounts and surrender values
Included in a policy summary
"Not taxable" since the IRS treats them as a return of a portion of the premium paid.
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
Unilateral Contract
One-sided: only one party makes an enforceable promise
Major difference between stock company and a mutual company..
Ownership is the difference between these two companies. Mutual-policyholders; Stock-stockholders
Family health history, alcohol/tobacco consumption, and recent surgeries
Part 2 of the application for life insurance provides questions regarding all of the following..
Admitted insurer
Synonym for authorized insurer
Dividends are not taxable
Taxation on dividends in participating policies?
Dividend
Term used to name the no taxes return of unused premiums?
Waiver or premium
Th rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called?
Payments earn interest and and grow tax deferred.
The "accumulation period" is the period of time over which the annuitant makes payments (premiums) into an annuity.
Life settlements
They could be sold for an amount greater than the current cash value, they involve insurance policies with large face amounts, they could be use for a key person coverage
Dividends
A participating insurance policy will pay _________ to the owner based upon actual mortality cost, interest earned and costs.
An insurance producer
A person required to be licensed under the laws of the state to sell, solicit, or negotiate insurance is known as
Reduced paid-up
This nonforfeiture option provides coverage for the longest period of time:
Level term
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
Level term
A policy will pay the death benefit if the insured dies during the 30-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
Automatic premium loan
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?
Revocable Beneficiary
A policyowner who is also yeh insured wants to name her husband as the beneficiary of her life policy. She also wished to retain all of the rights of ownership. The policyowner should have her husband named as the..
"Illustration" in a life insurance policy refers to
A presentation of non-guaranteed elements of a policy
$250,000
A producer in tensional he violated insurance statues. Ultimately, the commissioner determined that there were a total of 25 separate violations. What is the total, monetary penalty this producer can expect to receive?
Survivor protection
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as..
Increasing
A return of Premium term life policy is written as what type of term coverage?
Other-insured rider
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the...
A level annual premium for the life of the insured
A straight life policy has what type of premium?
Certain groups of employees only
A tax-sheltered annuity is a special tax-favored retirement plan available to
To a producer replacing a licensed agent who is retiring, to the surviving spouse of a deceased producer, to a designee of a producer who enters active duty with the US armed service.
A temporary insurance license maybe issued without examination and all of the following:
Rebating
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of?
FINRA
An agent selling variable annuities must be registered with..
Accidental Death Rider
This pays 2 or 3 times the face amount if death is the result of an accident as defined in the policy and occurs within 90 days of such an accident.
Equity Indexed Annuity
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 index. She would likely purchase a(n)?
Payor benefit rider
This rider will not cause the death benefit to increase
Annuity owner
The "owner" is the person who purchases the contract and has all of the rights such as naming the beneficiary and surrendering the annuity. The owner, however, does not have to be the one who receives the benefits; it could be the annuitant or the beneficiary.
Standard, substandard, and preferred
The 3 risk classifications used by underwriters for life insurance
The annuity period
Time during which accumulated money is converted into an income stream
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.
An employee has group life insurance through her employer. After five years, she decides to leave the company and work independently. How could she obtain an individual policy?
$10,000, no tax consequence
An employee quits her job where she has 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?
The insurer will pay the full death benefit from the group policy to the beneficiary
An employee quits his job on May 15 and doesn't convert his group life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. What best describes what will happen?
Profit sharing plan
An employer has sponsored a qualified retirement plan for its employees where the employees where the employer will contribute money wherever a profit is realized. What is this called?
Decreasing term
An individual had just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
A portion of the benefit up to a limit is tax free; the rest is taxable
An individual has been diagnosed with Alzheimer's disease. He's insured under a life insurance policy with the accelerated benefits rider. Which of the following is a true statement regarding taxation of the accelerated benefits?
Deferred
An individual has been making periodic payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it?
Maximum penalty for habitual willful noncompliance is $2,500
An individual who willfully violates this Act enough to constitute a general pattern or business practice will be subject to a penalty of up to....
Offer & Acceptance, Consideration, competent parties, and legal purpose
An insurance contract must contain...
Conditional Contract
An insurance contract that requires both the insured and the insurer meet certain conditions in order for the contract to be enforceable is...
Refund the premiums paid
An insured committed suicide 6 months after his life insurance policy was issued. The insurer will...
$9,800
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however; the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?
Paid-up option
An insured had a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?
Paid-up option
An insured has a life insurance policy from a participating company and receives 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 surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
Accelerated benefits
An insured is diagnosed with cancer and needs help paying for her medical treatment
Adjustment in the amount of the death benefit
An insured misstates her age at the time the life insurance application is taken. This misstatement may result in?
Insurance companies from adverse selection by high risk persons
The Medical Information Bureau (MIB) was created to protect...?
$50,000
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
Becomes terminally ill
The accelerated benefits provision for an early payment of the death benefit when the insured..
Universal Life- allows to have an applicant withdraw a limited amount.
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
Purchase a smaller amount of the same type of insurance as the original policy
The paid-up addition option uses the dividend to..
Reduction of premium
An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's' premium, thus reducing it to $900. What option does this describe?
Consideration
An insured pays an annual premium to his insurer. In return, the insurer promised to pay benefits in accordance with the terms of the contract. This is called..
Buyer's guide purpose
To allow the consume to compare the costs of different policies
$200,000
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?
If the primary beneficiary predecreases the insured
An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?
Not subject to income taxation by the Federal Government
Death benefits payable to a beneficiary under a life insurance policy are generally
Not subject to income taxation by the federal government
Death benefits payable to a beneficiary under a life insurance policy are generally
Mutual Policy (Example)
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check fin from the insurer. From what type of insurer did the insured purchase the policy?
Pay the death benefit; due to the incontestability clause it prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years, even on the basis of a material misstatement of facts or concealment of a material fact
An insured purchases a policy in 2008 and died in 2013. The insurance company discovers at that time that the insured concealed info during the application process. What can they do?
Cash option
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Obtain a list of all life insurance policies that will be replaced
During replacement of life insurance, or replacing ensure musky which of the following?
Viatical settlement
An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with upcoming medical expenses. What option could the insured utilize?
Reinstatement provision
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?
Illegal
An insurer devises in a determination strategy in order to quarter a large portion of the insurance market. What best describes this practice?
10 days
An insurer must present a buyers guide and policy summary prior to accepting the applicant's initial premium, unless the policy contains an unconditional refund provision lasting at least how many days?
STOLI policy.
An investor buys a life insurance policy on an elderly person in order to sell it for a life settlement.. what is this an example of?
Inspection report
An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n)
Recipient's life expectancy and amount of principal
What determines the amount of each installment paid in a life income option arrangement?
The insurer
And any controversy between the insured or the insured's beneficiary and the insured that arises from the application for insurance of any policy issued a connection with the application, the producer is considered to be the agent and which of the following?
The performance of the policy portfolio
What determines the cash value of a variable life policy?
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan
And employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
Non-qualified retirement plan
Earnings grow tax-deferred, contributions are not currently taxable, it can discriminate in benefits and selecting participants
The insured would not need to prove insurability for a conversion policy, the insured make convert coverage to an individual policy within 31 days, the premium for individual coverage will be based upon the insured's attained age
And employee is insured under her employers group life plan. If she terminates her group coverage, what is true?
$8,000, 60 days
And employee quits her job where she has a balance of $10,000 in her qualified plan. The balance is paid out directly to the employee in order for her to move the funds to a new account. If she decides to roll over her plan to a traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax free-roll over?
Attained age
And employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his...
Illegal under any circumstances
And in sure publishes intimidating brochures at portray the insurer's competition as financially and professionally unstable. Which of the following best describes the act?
Completed all continuing education requirements
And insurance producer license may be renewed at the producer has paid the applicable fees, submitted the renewal form to the commissioner, and..
Appointed
And insurance producer may not act as an agent for an insurer unless he/she has become which of the following??
He will have to pay a penalty if he is younger than 59 1/2
And insured has a modified endowment contract. He wants to withdraw some money in order to pay medical bills. Which of the following is true?
Increases annually
Annually Renewable Term policies provide a level death benefit for a premium that?...
A single payment or periodic payments
Annuities are characterized by how they can be paid for which is:
Size of each installment
What determines the length of time that benefits will be received under the fixed-amount settlement option?
Face amount
What does "level" refer to in level term insurance?
Liquidate an estate. Annuities do not provide death benefits; those are provided by life insurance.
Annuities are most commonly used to fund a persons retirement, but they can technically be used to accumulate cash for any reason. Annuities can also be used to..
24 hours
As a condition for renewal of their licenses, how many hours of continuing education required for all resident and nonresident insurance producers?
Before accepting the initial premium
Assuming that a policy does not contain an unconditional refund provision of at least 10 days, when must a Buyer's Guide and policy summary be provided?
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be..
Authorized
Legal purpose, offer & acceptance, and consideration
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements...
SIMPLE plans require this:
Employees must receive a minimum of $5,000 in annual compensation, no other qualified plan can be used, no more than 100 employees.
It is level term insurance
Best description of annually renewable term insurance...
The period of time during which accumulated money is converted into income payments.
Best description of what an annuity period is:
Flexible premium
Both Universal Life and Variable Life have a...
Funding against financial loss caused by the death of a key employee, funding business continuation agreements, compensating executives
Business uses of life insurance
buy-sell agreement
Buy-sell agreements are normally funded with a life insurance policy
All the following employees may use a 403B plan for their retirement except..
CEO of a private corporation
20 hours
Candidates for either a property license or a casualty license must complete how many hours of pre-licensing education?
Nonforfeiture options
Cash surrender, extended term, reduced paid-up
Liquidity in a life insurance policy
Cash values can be borrowed at any time
Straight life Policies
Charge a level annual premium throughout the insured's lifetime and provide a level, guaranteed death benefit.
2 years
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?
Notice regarding replacement
Which of the following documents must be provided to the policyowner or applicant during policy replacement?
convertible to permanent insurance upon a child reaching insurance upon a child reaching the maximum age without evidence of insurability.
Children's rider are term insurance covering all of the children in the family, including newly born children, and are...
The employer is the owner and beneficiary
Who is the owner and who is the beneficiary on a key person life insurance policy?
Newly born children, and are convertible to permanent insurance upon a child reaching the maximum age without evidence of insurability.
Children's rider are term insurance covering all of the children in the family, including:
Premiums are not tax-deductible as a business expense
Concerning the taxation of premiums in a key- person life insurance policy is:
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
Standard risk
Considered to be the average risk; representative of the majority of people in their age and with similar lifestyles
Contracts of Adhesion
Contracts that are prepared by one party and submitted to the other party on a take it or leave it basis are classified as?
Convertible Term Insurance
Convertible without proof of insurability up to the full term death benefit.
The benefit is received tax free
Corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then
The employer is the owner and the beneficiary
Who is the owner and who is the beneficiary on a key person life insurance policy?
Issue the policy anyway and pay the face value to the beneficiary.
(Example) When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will...
Limited pay while life
(Example) your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Within __ days of requesting an investigative consumer report an insurer must notify the consumer in writing that the report will be obtained?
3 days
The insured's estate.
A 40 year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarried and dies at age 61, leaving 2 grown-up children. Assuming he never changed his beneficiary, the policy proceeds will go to...
The amount of the distribution is reduced by the amount of a 20% withholding tax
A 60 year old participate in a 401(k) plan takes a distribution in rolled it over to it I already within 60 days. What is true?
Coercion
A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of...
20
A candidate for an accident and health producer's license must complete how many hours of prelicensing education?
20
A candidate for life insurance producer's license must complete how many hours of prelicensing education?
Benefit is received tax free
A corporation is the owner and beneficiary of the key person life policy. If the corporation collect the policy benefit, then
The benefit is received tax free
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then...
Proof of insurability is not required
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. What will she need to provide for proof of insurability?
Separate Accounts
A domestic insurer issuing variable contracts must establish one or more..
The insured's premiums will be waived until she is 21.
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?
If the father is disabled for more than 6 months
A father purchases a life insurance policy on his teenage daughter and adds the Payor benefit rider. What must be acceptable in order for the ride to be able to waive the payment of premium?
Annuities do not provide a (death benefit)
A fixed annuity is fixed in the sense that it provides a guaranteed minimum rate of interest and income payments that do not vary from one to the next. The company also guarantees the specified dollar amount for each payment and the length of the payout period.
Buyer's Guide
A generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process.
Costs of training a replacement.
A key person insurance policy can pay for what?
........ insurable interest must exist in a life insurance policy
"At the time of the application" is when interest must exist.
Immediate
(Example) A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?
A copy of the original application for insurance
According to the Entire Contract provision, a policy must contain...
Failure to pay off a loan, tax delinquencies, late payments
According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer:
Differentiate between guaranteed and projected amounts, only be used as approved, must identify nonguaranteed values
All of the following are requirements for life insurance illustrations..
There is no limitation on the number of key employee plans in force at any one time, the employer is the owner, payor and beneficiary of the policy, the key employee is the insured
All of the following are true of a key person insurance..
They help to reduce adverse selection against the insurer, they require 100% employee participation, the employer pays 100% of the premiums
All of the following concerning a non-contributory group plan is true:
Tax status, financial experience, and annual income
All of the following info about a customer must be in determining annuity suitability..
The death benefit is $0 at the end of the policy term, the contract pays only in the even if death during the term and there is no cash value, the face amount steadily declines throughout the duration of the contract.
All of the following is in regards to a decreasing term policy...
The plan is a legal method of accumulating money for retirement needs, the plan can discriminate as to who may participate, the plan is not approved for favorable tax treatment by the IRS.
All of the following statements concerning an employer sponsored non-qualified retirement plan are true as follows:
IRS approval requirements, taxation of withdrawals, taxation of contributions
All of the following would be different between qualified and nonqualified retirement plans:
Taxation of withdrawals, taxation of contributions, IRS approval requirements
All of the following would be different between qualified and nonqualified retirement plans:
Lower
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
Limited Pay Whole Life premiums
All paid by the time the insured reaches age 65. The policy endows when the insured turns 100. It is the premium paying period that is limited, not the maturity.
Cost of living rider, accidental death rider, and guaranteed insurability rider
All riders that will cause the death benefit to increase?
Funding business continuation agreements, compensating executives, funding against financial loss caused by the death of a key employee.
All the following are business uses of life insurance:
Rebates are allowed if it's in the best interest of the client
All the following are true regarding rebates except?
The dance from a mutual insurer
All the following could be considered rebates if offered to an insured in the sale of insurance except?
Defamation, misrepresentation, rebating
All the following would be considered an unfair and deceptive practice
Characteristics of group life insurance
Amount of coverage is determined according to nondiscriminatory rules, individuals covered, under the policy receive a certificate of insurance, certificate holders may convert coverage to an individual policy without evidence of insurability
Death Benefit
Amount paid upon the death of the insured in a life insurance policy
The Application
An Insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information?
Transfer of all ownership rights in a policy
An absolute assignment is a..
All of the following pertains to a Simplified employee pension plan (SEP):
Employer contributions are not included in the employee's gross income, SEP's allow the employer to make annual tax-deductible contributions of the 25% of an employee's earned income, SEP's have a higher tax deductible contribution limit than an IRA.
Federal tax advantages of a qualified plan
Employer contributions are tax deductible as ordinary business expense, funds accumulate on tax-deferred basis, employee and employer contributions are not counted as income to the employee for income tax purposes
Are subject to vesting requirements
Employer contributions made to a qualified plan..
They do not earn lower interest rates than fixes annuities
Equity Indexed Annuities invest on an aggressive basis in order to yield higher returns. Like a fixed annuity, EIA's have guaranteed minimum interest rates, also less risky than variable annuities, the insurance company also keeps a percentage of the returns.
Cash value available to the policy owner
Example of liquidity in a life insurance contract
$100,000
Example: the insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?
Aleatory Contract (Example)
Exchange of unequal values
Premium, death benefit, and policy period
Features of the Indexed whole life policy that are fixed..
Employer contributions are tax deductible as ordinary business expense,funds accumulate on a tax-deferred basis, employee and employer contributions are not counted as income to the employee for income tax purposes
Follow the following are true of the federal tax advantages of a qualified plan
Employees
For a retirement plan to be qualified, it must be designed for the benefit of
Tax deductible
For an individual who is NOT covered by an employer-sponsored plan, IRA contributions are
Tax deductible
For an individual who is not covered by an employer sponsored plan, IRA contributions are...
Subpoena witness, examine witness under oath, obtained evidence in the form testimony and documents
For the purpose of making an investigation, the commissioner does have the power to do all the following:
Coercion
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
100% participation of members is required in noncontributory plans
Group life insurance is a single policy written to provide coverage to members of a group. What statement concerning group life is true?
100% participation of members is required in noncontributory plans
Group life insurance is a single policy written to provide coverage to members of a group. What statement is correct?
Straight whole life policies
Have a guaranteed face amount and a level premium for the life of the insured.
Rebating
Having a client in inducement to a sale not stated in the policy is an unlawful practice known as?
They are not included as income for the employee, but are taxable upon distribution
How are contributions to a tax-sheltered annuity treated with regards to taxation?
3 years following the date of its last authorized use
How long must an insurer keep a copy of an authorized form in its records?
3 accounts: life insurance, annuities, and health insurance
How many accounts must to Tennessee life and health insurance Guaranty association maintain?
12 hours
How many credit hours of excess continuing education or producers allowed to carryover to the next renewal cycle?
$3,000
If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?
It is approved by the IRS
If I retirement plan or annuity is "qualified," this means...
5 days
If a (consumer) requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
Changes to an application may involve drawing a line through the first answer, record the correct answer, and have the applicant initial the change, one may note on the application the reason for the change, and if all else fails one may destroy the application and complete a new one.
If a change needs to be made to the application for insurance, the agent may do all of the following....
A qualified plan for a small business
If a company has a simplified employee pension plan, what type of plant is it?
A modified endowment contract
If a life insurance policy develops cash no you faster than a seven-pay whole life contract, it is?
The balance of the loan will be taken out of the death benefit
If a policy had an automatic premium loan provision, what happens if the insured dies before the loan is paid back?
The balance of the loan will be taken out of the death benefit
If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?
With the policy
If a policy includes a free-look period of at least 10 days, the Buyer's Guide must be delivered to the applicant...
Dividends are not guaranteed
If a producer discusses policy dividends in a sales presentation, what statement must the producer also make?
30 days
If a resident insurance producer moves from Tennessee to another state, he/she must file a change of address and provide certification from the new resident state within how many days of the change of legal resident?
Return the application to the applicant for a signature
If an agent fails to obtain an applicant's signature on the application, the agent must...
Settlement option
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a?
All of the above may happen
If an individual licensee's violation of the entrance code was known or should have been down by one or more of the partners, officers, or managers of the agency, what could happen to agency?
Fully insured
If an injured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is?
False advertising
If an insurance company has published a brochure that in accurately portrays the advantages of a particular insurance policy. What is this an example of?
Prior insurance, credit history, and habits
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information of the applicant...
The policy will terminate when the cash value is reduced to nothing.
If an insured continually uses the automatic premium loan option to pay the policy premium,
The policy will terminate when the cash value is reduced to nothing
If an insured continually uses the automatic premium loan option to pay the policy premium..
0%
If an insured receives accelerated death benefits, what is the least amount of the original death benefit that the beneficiary would receive after the insured's death?
It is only taxable if the cash value exceeds the amount paid for premiums
If an insured surrenders his life insurance policy, what is true regarding the cash value of the policy?
It is only taxable if the cash value exceeds the amount paid for premiums
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?
the amount of earnings lost by the insurance company in interest income
If an insured withdraws a portion of the death benefit by the use of this rider, the benefit payable at death will be reduced by that amount plus..
Be interpreted as if the insurer waived its right to have an answer on the application.
If an insurer issued a policy based on the application that had unanswered questions it would...
The policyowner
If the policyowner, the insured, and the beneficiary under a life insurance policy are three different people, who had the ownership rights?
Day
If the producer continues to violate the entrance code, I knew so penalty will be assessed every?
Unfair trade practices
If you insurance company makes a statement that it's policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered?
From trustee to trustee
In a direct rollover, how is the money transferred from one plan to the new one?
The owner
In a life settlement contract, whom does the life settlement broker represent?
Annuitization Period
In an annuity, the accumulated money is converted into a stream of income during what time period?
Applicants present physical condition, present occupation, and past medical history.
In classifying a risk, the Home Office underwriting department will look at all of the following..
Characteristics of group life insurance
Individuals covered under the policy receive a certificate of insurance, certificate holders may convert coverage to an individual policy without evidence of insurability, and amount of coverage is determined according to non discriminatory rules.
Loss
Insurance is a contract by which one seeks to protect another from...
Have lower premiums
Insureds who have been classified as preferred risk will...
Who makes up the Medical Information Bureau?
Insurers (this is so the insurers can compare the info that have collected on the individual)
When a large face amount is requested by an applicant it is protocol to do this..
Insurers commonly require HIV testing; the insurer must abide by a variety of rules created by its respective state.
Stock
Insurers who are owned by stockholders who have the usual rights of ownership, including the right of voting?
403(b) Plam (TSA)
Internal revenue code provision that specifically provides for an individual retirement plan for public school teachers is a(n)
The free look provision
Is a mandatory provision that allows the insured to examine a policy, and if dissatisfied for any reason, return the policy for a full refund of any premiums paid
Purpose of a conditional receipt
It is intended to provide coverage on a date earlier than the age of the issuance of the policy
All of the following would be considered a nonqualified retirement plan
Keogh plan, Roth IRA, 401(k)
Domestic insurer
Licensed in the state where the individual resides.
Alien insurer
Licensed, however, is outside of the U.S.
Foreign insurer
Licensed, however, not in the state the indivisible resides.
Income for 2 or more recipients until they die
Life income joint and survivor settlement option guarantees
2
Life insurance cost indexes are our only useful when comparing a minimum of how many similar policies?
Generally not taxed as income
Life insurance death proceeds are..
They could be used for a key person coverage, they could be sold for an amount greater than the current cash value, they involve insurance policies with large face amounts
Life settlements
It commences when the policy is delivered
Mandatory free look in a life insurance policy
The guaranteed insurability rider
May be structured to allow for specific additional amounts of insurance to be purchased at specific ages, dates, and events without proving insurability; however, the coverage is purchased at the insured's attained age and the maximum allowable purchase is specified in the base policy. This rider usually expires at the insured's age of 40.
Term rider
May be used to customize a permanent life insurance policy to meet the needs of the policyowner
6 credits
Minimum number of credits required for partially insured status for Social Security disability benefits is
A policy summary
Must be delivered along with the policy and will provide the producer's name & address, the insurance company's home office address, the generic name of the policy issued, and premium, cash value, surrender value & death benefit figures for specific policy years.
That the cash value will not be lost
Nonforfeiture values guarantee which policyowner?
40
Number of credits required for fully insured status for Social Security disability benefits?
As a field underwriter, a producer is responsible for all of the following tasks..
Obtain appropriate signatures on the application for insurance, help prevent adverse selection, and solicit business that will fall within the insurer's underwriting guidelines.
Social Security benefits
Old-age and retirement benefits, disability benefits, death benefits
Any form of life insurance
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?
A prospective insurer receives a conditional receipt, but dies before the policy is issued. The insurer will...
Pay the policy proceeds only if it would have issued the policy
An annuity
Periodic payments of accumulated funds best describes...
Policyowner
Person entitled to exercise the rights and priveleges in the policy
Policy loans can be repaid at death, an insurer can charge interest on outstanding policy loans, A policy loan may be repaid after the policy is surrendered
Policy loans
Universal life
Policy which allows the partial withdrawal, or surrender, of the policy cash value
When an agent collects the initial premium from the applicant, the agent should issue the applicant a...
Premium receipt
The applications
Primary source of insurance underwriting
Annually Renewable Term
Purest form of term insurance; death benefit remains level, but the premium increases each year with the insured's attained age. In decreasing policies, while the face amount decreases, the premium remains constant throughout the life of the contracts. In level term and increasing term policies, the premium also remains level for the term of the policy. Therefore, in the other types of level policies, the first-year premium would not be different from any other year.
An agent misrepresents policy benefits to convince a policy owner to replace policies
Rebating is an unfair trade practices and is regulated by law all of the following would be considered to be rebating except
Must allow the policyowner to return the policy for a full refund
Regarding the free-look provision, the insurance company
Must allow the policyowner to return the policy for a full refund.
Regarding the free-look provision, the insurance company..
The Federal Fair Credit Reporting Act
Regulates consumer reports
Nonforfeiture values
Required by state law to be included in the policy, and cannot be altered by the policyowner. A table showing the nonforfeiture values for the next 20 years must be included in the policy.
They must differentiate between guaranteed and projected amounts, they may only be used as approved, and the must identify non guaranteed values
Requirements for life insurance illustrations:
Single Premium Whole Life
Requires the entire premium to be paid in one limp sum at the policy's inception.
Life expectancy
Result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?
Whole life policies, limited-pay policies, annuities
Rules of replacement apply to all of the following:
Best detail of underwriting process for life insurance
Selection, classification, and rating of risks
Consideration
Something of value exchanged between the insurer and the insurer is considered....
Insurable interest
Stranger-originated life insurance (STOLI) policies are in direct opposition to the principle of...
Rated
Synonym for a substandard risk classification
The annual dividend is retained by the company, the interest is credited at a rate specified by the policy, the policyholder has the right to withdraw the accumulations at any time.
The accumulation at interest option
Tax-deductible contributions
The advantage of qualified plans to employers is
Accumulation at Interest
The annual dividend is retained by the company, the interest is credited at a rate specified by the policy, and the policyholder has the right to withdraw the accumulations at any time
Grace period
The automatic premium loan provision is activated at the end of the...
Irrevocable Beneficiary
The can be changed only with the written consent of that beneficiary
Performance or the policy portfolio
The cash value of a variable life policy is not guaranteed and fluctuates with the_________________ in which the premiums have been invested by the insurer.
The amount and frequency of premium payments
The consideration clause states that the value offered by the insured is the premium and statements made in the application, so it will include the information about..
Is the premium and statements made in the application, so it will include the information about the amount and frequency of premium payments.
The consideration clause states that the value offered by the insured...
Annually Renewable Term
The death protection component of Universal Life Insurance is always..
Annually Renewable Term
The death protection component of Universal Life Insurance is always....
One-year Term option
The dividend option in which the policyowner used dividends to purchase a term policy for one year is referred to as the...
Offer & Acceptance, consideration, competent parties, and legal purpose
The four essential elements of all legal contracts:
As of the application date (because FULL premium was taken during application)
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
Face amount of the policy, the beneficiary's life expectancy, and projected interest rates.
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following:
How is it determined whether an insurer is allowed I write business in a state?
The insurer's domicile of location of incorporation will determine whether a company is domestic, foreign, or alien
nonforfeiture clause option
The insurer's surrender the policy at its current cash value. Only any excess of value is taxable as income. Once the policyholder opts for cash surrender, the policy is immediately inactive.
Annually Renewable Term
The least expensive first year premium payment is found in..
Incontestability clause
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the?
When the income payments begin
The main difference between immediate and deferred annuities is...
Receive a policy loan, assign the policy, and designate a beneficiary.
The ownership provision entitles the policyowner to do what?
Receive a policy loan, assign the policy, designate a beneficiary
The ownership provision entitles the policyowner to...
The annuitant assumes the risks on investment.
The payments that that annuitant invests into the variable annuity are invested in the insurer's separated account. The separate account under many annuities provides the annuitant with a dozen or more investment options ranging from "money market funds" to "growth stock funds" to "precious metal funds".
Beneficiary
The person or interest to whom the policy proceeds will be paid upon the death of the insured. Beneficiaries do not have to have an insurable interest in the policyholder.
General requirements of a qualified plan
The plan must be communicated to all employees, the plan must be for the exclusive benefits of the employees and their beneficiaries, the plan must be permanent, written and legally binding
Whole life policy
The policyowner is entitled to policy loans
Policy assignment
The policyowner may assign a part of the policy (collateral assignment) or the entire policy (absolute assignment)
Policy assignment
The policyowner may assign a part of the policy or the entire policy.
The policy contains sufficient cash value to cover the cost of insurance.
The policyowner of a Universal Life Policy may skip paying the premium and the policy will not lapse as long as..
The policy contains sufficient cash value to cover the cost of insurance
The policyowner of a Universal Life Policy may skip paying the premium and the policy will not lapse as long as...
The death benefit can be increased by providing evidence of insurability.
The policyowner of an adjustable life policy wants to increase the death benefit. In order to to do that, what may happen?
The death benefit can be increased by providing evidence of insurability.
The policyowner of an adjustable life policy wants to increase the death benefit. What is the result of this?
Reduction of premium
The policyowner 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 dividends to help pay for her next premium. What option would allow her to do this?
Interest only option
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. What settlement option should the policyowner choose?
Tax deductible by the employer
The premiums paid by the employer in a business life insurance policy are
Tax deductible by the employer
The premiums paid by the employer in a business life insurance policy are...
The annuitant is a natural person
The president of a company is starting an annuity and decides that his corporation will be the annuitant. It can happen just as long as..
A non qualified annuity plan
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before-tax corporate dollars, and it does not meet government approval standards. This annuity plan is...
The existing and replacing insurer are the same and the transaction involves credit for life insurance
The protocol for replacement does not apply to which of the following situations?
Entire contract
The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the..
Help protect policy owners and beneficiaries against financial loss caused by the insolvency of an insurance company
The purpose of the Tennessee Guaranty Association is to
The state
The regulation of the insurance industry primarily rest with
Fiduciary responsibility
The requirement that an agent not co-mingle insurance monies with their own fund is known as?
Absolute and Collateral
The two types of assignments are?
Convertible term policy
The type of policy that can be changed from one that does not accumulate cash value to the one that does, is a...
Joint and survivor
The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called?
15 days
To appoint a producer as it's agent, the appointing insurer must file a notice of appointment with the commissioner within how many days from the date the agency contract is executed?
6 credits
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
Straight life policy
Traditional level premium contract..
HR-10 (Keogh Plan)
Two attorneys at law and operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose...
Gradually increases each year by the amount that the cash value increases.
Under Option B the death benefit includes the annual increase in cash value so that the death benefit...
Benefit payment amounts are not guaranteed
Under a variable annuity, the issuing insurance company does not guarantee a minimum interest rate or the benefit payment amounts.
Respond to the consumer's complaint.
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must...
Both the principal and interest are liquidated together over the selected period of time
Under the fixed-period option, a specified period of years is selected, and equal installments are paid to the recipient.
Cash surrender
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?
Universal Life Option A
Universal life option A (Level Death Benefit Option) Policy must maintain a specified "corridor" or gap between the cash value and the death benefit, as require by the IRS.
2 years
Unless revoked or suspended how long does a producers license remain in effect in Tennessee?
Statement of good health, payment of premium, and delivery receipt.
Upon policy delivery, the producer may be required to obtain?
Reinstatement provision
Upon policy reinstatement to pay all overdue premiums with interest before the policy is reinstated
30 days
Upon receipt of notice of appointment, the commissioner must verify the insurance producer is eligible for appointment within how many days?
The beneficiary will only receive payments of the interest earned on the death benefit.
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?
Level fixed
Variable life insurance is based on what kind of premium?
State and federal government, the insurance department, and the SEC.
Variable life insurance is regulated by..:
Workers compensation
What are examples of a business use of life insurance?
Level, Increasing, & Decreasing
What are the three basic types of term coverage available, based on how the face amount (death benefit) changes during the policy term:
Insurance and cash account
What are the two components of a universal policy?
Coverage until death or age 100.
What characteristic makes whole life permanent protection?
The earnings in the plan accumulate tax deferred
What describes the tax advantage of a qualified retirement plan?
Those who have been insured under the plan for at least 5 years
What employee insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
Owner's rights
What explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy?
It remains the same no matter how many children are added to the policy
What happens to the premium on the children's rider in a life insurance policy?
It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age
What happens when a children's rider is added to an insured's permanent life insurance policy?
Coverage ends and the policy cannot be reinstated
What happens when a policy is surrendered for its cash value?
The amount of premium payment
What information will be stated in the consideration clause of a life insurance policy?
A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company.
What is a material misrepresentation?
Keogh
What is an IRS qualified retirement program for the self-employed?
Employees receive individual policies
What is correct concerning a non contributory group plan:
Premiums are not tax deductible as a business expense.
What is correct concerning the taxation of premiums in a key-person life insurance policy?
Premiums are not tax-deductible as a business expense
What is correct concerning the taxation of premiums in a key-person life insurance policy?
When the application is given to a prospective insured.
What is not a consideration in a policy?
Worker's Compensation
What is not an example of a business use of life insurance?
The original age is used for premium determination
What is the advantage of reinstating a policy instead of applying for a new one?
To create an estate
What is the best reason to purchase life insurance rather than annuities?
Common disaster clause
What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?
18
What is the minimum required age for an insurance producer in this state?
Viator
What is the name of the insured who enters into a viatical settlement
Old age survivors disability insurance
What is the official name for the Social Security program?
Lump sum
What is the other term for the cash payment settlement option?
Retirement
What is the primary purpose of a 401(k) plan?
To explain features and benefits of a proposed policy to the consumer.
What is the purpose of a disclosure statement in life insurance policies?
To provide a guaranteed income for a certain amount of time
What is the purpose of a fixed-period settlement option?
It allows the insured to reject the policy with a full refund
What is the purpose of a free-look period in insurance policies?
To keep the policy in force
What is the purpose of establishing the target premium for a universal life policy?
75%
What is the required percentage of participants in a contributory group plan?
Mode
What is the term for how frequently a policyowner is required to pay the policy premium?
The rider is usually level term insurance
What is true about a spouse term rider?
Trusts can be valid beneficiaries, the beneficiary may be a natural person, and the policy does not have to have a beneficiary named in order to be valid
What is true about beneficiary designations?
Buy-Sell agreements are normally funded with a life insurance policy
What is true concerning a buy-sell agreement?
Funds exceeding the premium paid are taxable as ordinary income.
What is true of the cash surrender nonforfeiture option?
They could be used for a key person coverage, they could be sold for an amount greater than the current cash value, they involve insurance policies with large face amounts.
What is true on life settlements?
Earnings grow tax deferred, contributions are not currently tax deductible, it can discriminate in benefits and selecting participants
What is true regarding a non-qualified retirement plan?
They are tax free to terminally ill insured
What is true regarding taxation of accelerated benefits under a life insurance policy?
They are tax-free to terminally ill insured
What is true regarding taxation of accelerated benefits under life insurance policy?
Both life insurance and a securities license
What license or licenses are required to sell variable life annuities?
Life income with period certain
What 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?
Buyer's Guide and Policy Summary
What must be presented before an applicant submits a premium?
Option B
What option for Universal Life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
100%
What percentage of a company's employees must take part in a noncontributory group life plan?
Insuring Clause
What policy component contains the company's promise to pay?
Face amount
What policy component decreases in decreasing term insurance?
Universal Life- Option A
What policy would have an IRS required corridor or gap between the cash value and the death benefit?
Annual
What premium payment mode will incur the lowest overall payment?
Automatic premium loan
What protects the insured from an unintentional policy lapse due to a nonpayment of premium?
Debtor in Creditor
What relationship is not an example of insurable interest?
Consumer reports
What reports include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources?
Grace period
What required provision protects against unintentional lapse of the policy?
Suicide is excluded for a specific period of years and covered thereafter.
What statement about a suicide clause in a life insurance policy is true?
Buy-sell agreements are normally funded with a life insurance policy
What statement is true concerning buy-sell agreements?
Life expectancy
What term means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?
Whole life
What type of insurance policy would perform the function of cash accumulation?
Policy summary
What usually includes information about premium amounts, cash values, surrender values, and death benefits for specific policy years?
Buy-Sell agreement
What would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?
Has a tax benefit for both employer and employee
What's true of a qualified plan?
Interest only
When a beneficiary receives payments consisting of both principal and interest portions, which part are taxable as income?
Equal to the original policy for as long a period of time that the cash values will purchase
When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount
Equal to the original policy for as long as a period of time that the cash values will purchase
When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount..
Contract of Adhesion
When a persons only options for a contract are on a take it or leave it basis; prepared only by the insurer.
Defamation
When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of?
Purchase a single premium policy for a reduced face amount
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be use to..
31 days
When an employee terminates coverage under group insurance policy, coverage continues in force for how long?
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage and issues a policy
Conditional
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is..
When the application is signed and a check is given to the agent.
When is the earliest a policy may go into effect?
When death occurs within a specified period of time after the policy was issued
When may an insurance company use suicide as a defense against paying a death claim?
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable statement of Good Health
The earliest a policy may go into effect?
When the application is signed and a check is given to the agent
Fixed amount
When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?
Fixed amount
When the policyowner specifies dollar amount in which installments are to be paid, he/she has chosen which settlement option?
Discrimination
When twin brothers applied for life insurance from company a, the company found that while neither of them smoke and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered?
When the insured reaches age 100
When would a 20-pay whole life policy endow?
When the insured reaches age 100. "A limited-pay whole life policy, just like straight-life, endows for the face amount if the insured lives to age 100. The premium is, however, completely paid off in 20 years."
When would a 20-pay whole life policy endow?
If it is intentional and material
When would a misrepresentation on the insurance application be considered fraud?
If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
Whether an insurable interest exists between the individuals
Third-party ownership
Which insurance arrangement will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?
Life income with period certain
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original dies, the payments will continue to a designated beneficiary?
Extended term
Which nonforfeiture option has the highest amount of insurance protection?
Reduced paid-up
Which nonforfeiture option provides coverage for the longest period of time?
Issuing the policy
Which of the following activities is not performed by an insurance producer?
Failing to meet sales goals
Which of the following acts would not get an insurance producer terminated "for cause"?
Making derogatory oral statements about another insurer's financial condition
Which of the following best describes the unfair trade practices of defamation?
Have attained fully insured status
Which of the following is an eligibility requirement for all Social Security disability income benefits?
Telling a client that his first premium will be waived if you purchased insurance policy today
Which of the following is an example of a producer being involved in an unfair trade practices of rebating?
Prelicensing course is must be approved by the commissioner, applicants must complete 20 hours of training for each line of authority, online and the classroom courses are allowed
Which of the following is true regarding pre-licensing education requirements for insurance producers in the state?
Business entity
Which of the following may obtain a producer's license, but may not sell, solicit, or negotiate a contract of insurance in Tennessee?
A person who negotiates insurance contracts
Which of the following persons is required to hold a producer license?
Policy loan
Which of the following provisions would NOT be found in Term Life Insurance?
It requires the policyowner to pay all overdue premiums with interest before the policy of reinstated.
Which of the following statements about the reinstatement provision is true?
Defamation
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?
Term life
Which of the following would NOT have a policy loans provision?
Implying that the agent is the insurer
Which of the following would be considered false advertising?
A salaried employee who advertises and solicits insurance
Which of the following would be required to be licensed as an insurance producer?
A nonresident life insurance producer who is planning to transact property insurance
Which of the following would be required to complete pre-licensing education?
Face Amount
Which policy component decreases in decreasing term insurance?
Insuring clause
Which provision of a life insurance policy states that the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?
Replacement rule
Which road apply for the agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
An individual who has a contract or agreement we could ensure to solicit or negotiate insurance policies on behalf of that insurer
Which statement best defines an insurance producer?
Level or flexible
Which two terms are associated directly with the premium?
Universal Life
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
Single premium
Which type of life insurance policy generates immediate cash value?
Equity Indexed Annuity and Fixed Annuities
While equity indexed annuities earn higher interest rates than fixed annuities, both types of annuities guarantee a specific minimum interest rate
An individual not covered by an employer-sponsored plan who has earner income
Who can make a fully deductible contribution to a traditional IRA?
Policyowner
Who can request changes in premium payments, face value, loans, and policy plans?
A policyowner who is not the insured
Who is a third-party owner?
The individual making the contract on behalf of the on authorized insurer is liable
Who is personally liable for all contracts of insurance unlawfully made with in Tennessee on behalf of an unauthorized insurer?
Determines if the insurance policy is an MEC.
Who is the main purpose of the seven-pay test?
The policyowner is entitled to policy loans.
Whole life policies offer level premium based on the issue age, guaranteed, level death benefit, cash value that is scheduled to equal the face amount at the insured's age 100, and living benefits, which include policy loans.
It has a guaranteed minimum interest rate
Why is an equity Indexed annuity considered to be a fixed annuity?
Substandard Risk
Will result in having to pay the highest premium due to health, history, habits, etc.
Timeframe for filing relevant Suspicious Activity Reports
Within 30 days of INITIAL DISCOVERY
3 days
Within how many days of requesting an an investigative consumer report must an (insurer) notify the consumer in writing that the report will be obtained?
3 days
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
Mutual Insurance Company
________________ are owned and controlled by their policyholders. Any surplus money is returned to the policyholders as dividends.
$1000 for each violation
any person acting as an insurance producer without a valid license may be fined up to
Two months
must ensure a pair that's benefit claim after receiving the product of death?
