Life insurance exam

Under the internal revenue code, a portion of the employer-paid premiums of group term life insurance is taxable for an employee whose coverage exceeds what minimum amount

$50,000

A licensee must take a minimum of how many hours of continuing education within the two year renewal period?

12 hours

A life insurance policy becomes incontestable after it has been in effect for a maximum of which of the following time periods?

2 years

A licensee must take a minimum of how many hours of ethics continuing education within the two-year renewal period?

3 hours

All licensees are required to notify the director of insurance's office of a change in address within how many days of the change?

30 days

Within how many days from the final deposition must a producer report to the Director any administrative action taken against the producer in another state?

30 days

J, a 30-year-old proposed insured, plans to retire at age 60 and wants to purchase life insurance that offers level premiums and life-long protection. If J also wants the policy to be paid up when J retires, J should buy:

30-pay life

Traditional Individual Retirement Account (IRA) withdraws are generally subject to tax penalty if they are made before the insured reaches what minimum age?

59 1/2

In order for a company to make a contributory group life insurance plan available to its employees, what minimum percentage of the eligible employees must participate in the plan?

75%

To become a resident insurance producer, licensed Producer moving to Missouri must take an application within:

90 days of moving to Missouri

Which of the following items binds the insurer to coverage as of the date of The application or medical examination, whichever is later provided that the proposed insured is acceptable risk?

A conditional receipt

An application for a life insurance policy that is submitted with the initial premium is legally considered to be:

A consideration

In a life insurance contract, the consideration given by the applicant in exchange for the promise of the insurance company consist of the insured's statement in the application and which of the following items?

A medical examination report

Which of the following contracts is purchased with a lump sum and pay the guaranteed income?

A single premium annuity

Which of the following items must be contained in application for variable life insurance?

A warning that variable life insurance is not appropriate for insureds with a net worth of less than $50,000

Which of the following provisions of a life insurance policy will pay a stated amount to an insured if the insured is blinded in an accident?

Accidental Death and Dismemberment clause

Suitability Information includes:

Age, annual income, and financial objectives

Which of the following statements is correct about group life insurance?

An employer maybe he'll responsible for the premium for a policy in force during its grace period

Which of the following features of a life policy is used to restrict coverage?

An exclusion

The premium mode that results in the lowest premium outlay is:

Annually

If an insured purchases an annuity from which income is received, the insured is the

Annuitant

Which of the following is grounds for a suspension, revocation, or refusal to issue or renew a producers license?

Being charged with a felony

R's Life insurance policy lapsed because R did not pay the premium after 60 days in order to put the policy back in force, R should take which of the following actions?

Complete an application for reinstatement and submit all back premiums due

An agent receives an unsolicited call from a prospective client who wants to purchase a large single premium life policy. When advised about early withdrawal penalties, the client does not seem concerned and is evasive when the agent inquires about the source of the funds. In this situation, the agent should take which of the following actions?

Contact insurance company compliance officer to report a red flag concerning possible money laundering

On January 3, an insured accepts delivery of a whole life policy that has an effective date of December 22 of the previous year. The policy contains a six month wavier of premium provision. If the insured becomes disabled on January 6 as the result of an accident, and the disability continues beyond July 6, the insurance company will:

Continue the coverage and reimbursed for the insured for a wage loss and incurred during the period of disability

Which of the following features of a group term life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?

Conversion privilege

An insurance company may take which of the following actions if insureds death occurs while a policy loan is outstanding?

Deduct the loan balance plus interest from the policy cash value but not from proceeds

Making any false oral or written statement about an insurers Financial condition that is intended to injure the insurer is a form of:

Defamation

Which of the following statements about a settlement option provision in a life insurance policy is correct?

Define in insurance companies options in settling legal disputes with a policy owner

If an insured commits suicide when a suicide clause is in effect, an insurance company will take which of the following actions with a beneficiary claim?

Deny the claim and return the premiums paid

The Director of insurance regularly examines licensed Insurance companies in order to do all of the following functions except:

Determine their Financial condition

No person shall act as an insurer or no insurer shall transact insurance except as authorized by the:

Director of insurance

The department of insurance is empowered to:

Enforce state laws relating to insurance

A certificate of authority empowers in insurance company to take which of the following actions?

Engage in insurance business

Which of the following sections of a life insurance contract states that the application is part of the contract?

Entire Contract provision

A life product that separately identifies interest credits and mortality and expense charges made to the policy is a(n):

Equity indexed annuity

The term that best identifies The type of responsibility expected of any license towards funds entrusted to that license care in connection with the transaction of insurance is:

Fiduciary

Mandatory policy provisions under a universal life policy include:

Grace period of 45 days

The accelerated death benefit in a life insurance contract can be accessed by which of the following methods?

Having an authorized physician diagnose a terminal illness to the carrier with prognosis of less than one year life expectancy

If a 45 year old individual bought an annuity to provide income for life beginning at age 65 the insured did not buy:

Immediate annuity

When an existing life insurance policy with a reduction in cash value, the producer must sign the:

Important notice: replacement of life insurance or annuities

A license insurance producer may request a waiver of license renewal procedures if they are:

In military service

One of the basic concepts of insurance underwriting is that a life insurance policy owner must be the insured, A blood relative of the insured, or someone who would suffer in economic loss if the insured died. This concept is known as:

Insurable interest

Which of the following statements is correct about a policy loan against a life insurance contract?

Interest on a loan which is not paid when due is added to the total debt

The primary purpose of the life insurance replacement regulation is to protect the:

Interest policy owners

Which of the following statements is correct about a policy loan against a life insurance contract?

Interest rate on a loan are determined by the insurance companies loss ratio experience

Credit life insurance is best described as insurance that:

Involves a credit transaction between the insured and the insurance company

Which of the following statements is correct regarding variable whole life insurance?

It is insurance and a securities product

Which of the following statements is correct about credit life insurance?

It shall be issued in an amount not to exceed the total amount of indebtedness

Able construction company wants to take the initiative policy President offset the cost of replacing the president if the president should die prematurely. The type of policy the company should buy is called:

Key employee

An annuity that allows an individual to choose the annual premium payment amount is

Level premium

A 30-year-old perspective insured is considering The purchase of a life insurance policy. If all the following policies have the same face amount which would require the large annual premium?

Life paid up at 65

An accelerated death benefit of a life insurance policy is also known as

Living benefit or terminal illness benefit

On may 8, a prospect filled out an application for a life insurance policy but paid no premium. The insurance company approved the application on May 14 and issued the policy on May 15. The producer delivered the policy on May 26 and collected the first premium. The coverage became effective on:

May 26

A client should know that the indexed annuity differs from the fixed annuity in that the indexed annuity:

May receive credited interest based on the fluctuations of the linked index

All of the following provisions are required in a life policy Except:

Misstatement of age

Which of the following policy features permits an insured to pay premiums MORE than once every year?

Mode of premium provision

A policy that is over funded according to IRS tables is classified as which of the following types of policies?

Modified endowment contract

An insurer issuing both variable life insurance and variable annuities:

Must maintain separate accounts for both

An insurance company accepts an application containing several unanswered questions and issues the policy. In this situation, the company:

Must obtain the missing information at a future date

M understates her age in an application for a life insurance policy. At M's death the company will most likely

Pay an amount based on what M's premium payments would have purchased if M had given her true age

Which of the following provisions could double the face amount of insurance if insurance death occurred as a result of an unintended and unforeseen event?

Payor clause

Which of the following persons has the right to change the beneficiary designation on A life insurance policy?

Policyowner

Dividends paid on a life insurance policy are

Projected but not guarantee

The primary purpose of including a suicide provision in a life insurance policy is to

Protect the insurer against the purchase of a policy in complation of suicide

A guaranteed insurability provision is best described as

Provision that allows the insurance of additional coverage

A producer offers to return premiums to a prospective insured as an inducement to purchase insurance. This is an example of:

Rebating

A purpose of the insurance guaranty fund is to:

Reduce financial losses to policy holders resulting from insurance company insolvency

Which of the following qualification is not a prerequisite for becoming a licensed producer?

Remitting to the Director of insurance all required fees

All of the following options are examples of non-forfeiture options except

Renewability

A producer MUST submit an applicants signed statement about whether or not new insurance will replace an existing policy to the:

Replacing insurance company

An insurers underwriter uses medical information obtained on an applicant to determine:

Risk classification

The U.S.A. Patriot act was signed into law in response to:

September 11, 2001 attack

An insured must take which of the following actions to continue a renewable term policy?

Submit a renewal application

Information reasonably necessary to determine the appropriateness of an annuity is called:

Suitability information

Which of the following policies insurers two individuals and is designed to pay a benefit at the second death

Survivorship policy

Which of the following statements is correct about the amount of group life death benefit that the beneficiary must report for federal income tax purposes?

The beneficiary must report the entire amount

When an employer provides noncontributory group term life insurance, which of the following statements is CORRECT?

The employer pays the entire cost of the plan

Which of the following individuals may assign benefits under a group life policy?

The insured

Before submitting a replacement form to an insurance company what should the insurance producer leave with the applicant?

The original or a copy of written or printed sales materials used for presentation to the applicant

Which of the following features is typical of term insurance?

The policy expires at the end of the policy period

Which of the following statements is correct about a whole life policy?

The policy owner may borrow against the cash value of the policy

Which of the following statements must be correct for a non-resident to be eligible for a producer license in this state?

The producers state of residence must have reciprocity within this state

An insured, age 30, wants to purchase a whole life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of the following statements would be the producers most appropriate response?

The rate of cash value accumulation depends on the profitability of the insurance company

In a third-party ownership arrangement, which of the following individuals is a party to the contract?

The revocable beneficiary

If an insured dies during the contestable period of a life insurance policy, the insurance company will NOT pay the policy proceeds in which of the following situation?

There was a meterial misrepresentation in the application

Which of the following statements is correct about statements a proposed insured makes on a life insurance application?

They are representations and deemed true to the best of the applicants knowledge

The applicant signature is required on a life insurance application for which of the following reasons?

To represent that the statements on the application are true to the best of the applicants knowledge

Which of the following types of policies offers the owner investment in money-market funds, long-term bonds, or equities?

Variable life

A permanent life insurance policy that permits the policyowner to invest the policies cash value is an account that are separate from the insurance company's General account is called a:

Variable life insurance

A flexible premium universal life insurance policy ushers the policy owner of the ability to:

Very the timing of premium payments or select a different amount of insurance

S and W are business partners. Each takes out a $100,000 life insurance policy on the other, naming himself as primary beneficiary. S and W eventually dissolve their business, and two months later S dies. Although S was married at the time of death, the primary beneficiary is still W. However, an insurable interest no longer exists. The proceeds from S's life insurance policy will go to

W

Which of the following parts of a life policy is guaranteed to be correct?

Warranty

An applicant for life insurance must be informed of their rights under the fair credit reporting act at which of the following times?

When the producer completes the insured's application

The life insurance and annuities replacement regulation applies to all of the following types of policies except:

Whole life insurance

A beneficiary who must consent to a change in the beneficiary designation in a life insurance policy is referred to as

an irrevocable beneficiary

An adjustable life policy owner may take all of the following actions without providing proof of insurability except

increase face amount

Under a unilateral insurance policy, which of the following parties makes the legally enforceable promises?

insurance company

Continuing education units for producers may be granted for participation in all of the following activities except:

meeting sales production requirements

Making an unfair comparison of two policies is defined as

misrepresentation