Life Insurance Exam
Notice of a hearing for a cease and desist order must be given at least how many days in advance
10 days
What percentage of a company's employees must take part in a noncontributory group life plan
100%
What percentage of a company's employees must take part in a noncontributory group life plan?
100%
A policy holder has requested access to personal information collected and recorded by the insurance agent. The agent must respond to the request within
30 business days
Apparent
Agent authority also called "perceived authority"
A Universal Life Insurance Policy is best described as a/an
Annually Renewable Term policy with a cash value account
A universal life insurance policy is best described as
Annually renewable Term policy with a cash value account
Admitted
Another term for authorized insurer
Application
Contains the most information used for underwriting purposes.
What are considered exceptions to the early distribution rule:
Death, Disability, divorce decree, and a series of equal payments over the participant's life expectancy, a loan from the plan, as part of a qualified rollover
Life insurance as an Executive Bonus is owned by the company
FALSE
The amount of insurance on a life of any debtor may exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor
FALSE
Life insurance Death proceeds are
Generally not taxed as income
A ROP term life policy is written as what type of term coverage
Increasing term insurance policy It pays an additional death benefit to the beneficiary equal to the amount of the premiums paid
This provision restores an insured person to the same financial state as before the loss
Indemnity Provision
Fixed amount option
Installments have no life contingencies and a specific amount of benefits will be paid until funds are exhausted with annuitant living or not.
A life insurance policy has a legal purpose if both of which of the following elements exist?
Insurable interest and consent
NLT time the policy is delivered
Insurance agents must provide notice of their information practices to applicants and policyholders
Who makes up the medical information Bureau
Insurers
Interest option
Interest credited under this option is TAXABLE
Waiver of Cost of Insurance Rider is found in what type of insurance
Is found in Universal Life policies, the rider allows the cost of insurance to be waived except premium costs for cash value.
5 days
Is how many days the insurer or reporting agency has to comply when a consumer requires additional information concerning investigative consumer reports.
A policy which increases significantly in face amount reaches a specific age (usually 21)
Jumping Juvenile
Self employed retirement program is a ...
Keogh Plan
What organization must all admitted insurers belong
Life, Accident and Sickness Insurance Guaranty Assoc. (LASIGA)
The installments for a FIXED PERIOD ANNUITY SETTLEMENT OPTION is NOT
NOT a life CONTINGENCY Option
reduction of premium dividend is applied to ...
Next year's premium
When Calculating the amount a policy owner may borrow from a variable life policy, what must be subtracted from the policy's cash value
Outstanding Loans and interest
The Use of Life insurance as an executive bonus is a policy owned by
Owned by the employee
What is NOT considered exceptions to the early distribution rule?
Participant's Debt
30 days
Policy holder requested to access to personal information collected and recorded by the insurance agent.
Included in a policy summary
Premium amounts and surrender Values
What must be included in a policy summary?
Premium amounts and surrender values
A decreasing term policy
Premiums remain level with a decreasing term policy; only the face amount decreases
KEOGH retirement plan
President and employee of a family corporation would be eligible to establish a Keogh retirement
Not tax deductable
Roth IRA contributions are NOT tax-deductable. because the contributions are made with after-tax dollars, qualified distributions are not income taxable. Contributions can continue beyond age 72ys and distributions are made with after -tax dollars
When a life insurance policy stipulated that the beneficiary will receive payments in specified installments for a specified number of years, what provision prevents the beneficiary from changing o borrowing from planned installments
Spendthrift provision
The amount of insurance of the life of any debtor may NOT exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor
TRUE
When an insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting information?
The Application
The annuitant dies while the annuity is still in the accumulation stage what statement is TRUE
The beneficiary receives benefits from the annuity: Either the amount paid into the plan OR the cash value (WHICHEVER IS GREATER)
Creating an Estate
The best reason to purchase life insurance rather than annuities
Consideration
The binding force in any contract. It is the part of the insurer to promise to pay in the event of loss
J Transferred his life insurance policy to his son two years before his death. What happens to J's policy?
The entire face value of the policy will be included in J's taxable estate.
The amount of payments for a life income settlement option is determined by NOT taking into account
The insured's age at death
False
The owner must be the in the party to receive benefits
Policy contains sufficient cash to cover the cost of insurance
The policy owner of a Universal Live policy may skip paying the premium and the policy will not lapse
Fiduciary Duty
The trust that a client places in the producer in regard to handling premiums
Annuity contracts grow tax deferred
There is no current income taxation upon the growth in the annuity
The type of policy allows the owner to skip premium payments, provided there is enough cash value in the policy to cover the premium amount
Universal Life
Option A
Universal Life option has a gradually increasing cash value and a level death benefit
Disability Income Benefit Rider
When an insured is disabled for longer than 6 mos, they get a monthly premium waiver and monthly income
Guaranteed Insurability Rider
When policy owner is allowed to make periodic additions to the face amount at standards rates without proving insurability
The Beneficiary
Who receives the annuity benefits if the annuitant dies
Licensing of Viatical settlement brokers
a business entity may receive a viatical settlement broker license
Licensing of viatical settlement brokers
a business entity may receive a viatical settlement broker license
Buy-Sell agreement
a legal document which would dictate who can buy a deceased partner's share of a business
Limited Pay Life
a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. Wha kind of policy is it?
Current assumption life
another name for interest-sensitive whole life insurance
At what time may the Insurance Commissioner inspect records pertaining to insurance transactions?
at any business time in the 3 years immediately following the relevant transaction
Class Designation
beneficiaries are not identified by name
The death benefit under universal life option B, gradually increase each year
by the amount the cash value inceases
Insurable risk is not
catastrophic
Another name for interest - sensitive whole life insurance is
curent assumption life
Owners Rights
explains the policy owner's right to change beneficiaries, choose options, and receive proceeds of a policy
Paid-up addition dividend is used to increase the...
face amount
Events or conditions that increase the chances of an insured loss occurring are referred to as
hazards
A life insurance policy Legal purpose of what two elements
insurable interest and consent
A universal policy has two components
insurance and cash account
Taxation on accumulation
is deferred in both qualified and non-qualified retirement plans.
An offer made
is when an applicant submits and application to the insurer
Why is an equity indexed annuity considered to be a fixed annuity?
it has a guaranteed minimum interest rate
A universal Life policy has two types of interest rates that are called
minimum and target
A universal life policy has two types of interest rates
minimum and target
During replacement of life insurance, a replacing insurer MUST
obtain a LIST of ALL life insurance policies that will be replaced
With dividends the ownership belongs to the
policy holders
A life insurance policy has a legal purpose if both of which of the following exist
policy owners and named beneficiaries
Which nonforfeiture option provides coverage for the longest period of time?
reduced PAID UP which provides protection until the insured reaches 100 y.o.
The client
responsible for the suitability of an agent's recommendations in the event a client refuses to provide information related to their tax status, investment objectives, or overall financial situation and enters an annuity contract
The premium on a children's rider
stays the same no matter how many children are added to the policy
Any distributions from MECs are...
taxable including withdrawals and policy
In credit life insurance who is the policy owner
the Creditor
5 years under a group plan
the amount of time to qualify for a conversion to an individual policy of the same coverage
Installments for fixed period option
the annuitant selects the time period for the benefits, and the insurer determines how much each payment will be. This option pays for a specific time only and not life contingencies
Reduced Paid-up
the nonforfeiture options providing coverage for the longest period of time
Indexed Whole Life
the type of insurance policy may automatically increase the face amount of the policy as the consumer price index increases
Survivor protection
used when a married couple determine the financial needs of their children in the event one of both should die prematurely
Limited pay whole life
when a client wants both protection and savings from the insurance and is willing to pay premiums until age 65