Life Insurance Questions
According to the California Insurance code, the commissioner can disprove a licensee's request to use a fictitious name for any of the following reasons except that the
Name is the licensee's actual name
When are parties to a contract required to communicate information solely based on personal judgment for a matter in question
Never
Life insurance policies written without a physical examination are called
Non-medical
Which type of insurance coverage has both a savings element and flexible premium option
Universal life
Upon notification of a claim, a claimant must be given access to the California fair claims settlement practices regulations by all of the following means except
by interview appointment with the agent of record
Which type of insurance policy provides a death benefit that matches the projected outstanding debt on an individual's home
Mortgage redemption
Risk can be defined as all of the following except
The cause of loss
How much employer-provided group term life insurance is exempt from income taxation?
$50,000
Section 1729.2 of the California insurance code requires insurance producer applications and licensees to notify the insurance commissioner in writing, within blank days of changed in background info after an application has been submitted or a license has been issued
30
How long is the free cancellation period for life insurance policies offered to individuals who are 60 or older
30 days
A 10 year certain annuity with an installment refund is purchased. The annuitant dies after receiving monthly payments for 5 years. How many remaining payments will the insurer make
60 payments
Which of the following is a hazard
A condition that may increase the likelihood of a loss occuring
A policyowner has the right to change of the following except the
A dividend schedule
When a person charges an insured a fee to review the insured's existing life policy, what type of license does that person need
A life and disability analyst
All of the following info is gathered during the personal financial planning process except
A listing of a person's civic and professional organization memberships
It is considered an unfair method of competition for an agent to advertised that insurer the agent is appointed with is
A member if the insurance guarantee association
Which of the following would an agent be guilty of for misrepresenting the amount of dividends a policy will pay
A misdemeanor
A life insurance policy written after 1988 that fails to meet the seven-pay test is known as
A modified endowment contract
Which type of insurer is owned by its policyholders
A mutual insurer
According to the California insurance code, governing the use of life insurance policy illustrations, the term illustration means
A presentation of policy features that includes non-guaranteed elements
Individual life insurance policies sold to seniors in the state of california must include a prominently placed settlement that divulges all of the following info except
A proof of surrender must be notaries at the agent's principal office
An insurer entitled to transact business by complying with the California insurance code is known as an
Admitted carrier
Failure to report background changes within 30 days as required under section 1729.2 of the California insurance code could subject a licensee or applicant to
All of the above
A contract tha trestores an injured party to the condition that was present before the loss is
An indemnity agreement
A contract in which one party promises to indemnify another against loss that arises from an unknown event is
An insurance policy
The additional premium charged by an insurer for adding the accidental death benefit to a whole life policy
Does not affect the policy's cash value
An insured replaces an existing annuity with a new one and must pay a surrender charge for cancelling the existing annuity. The new policy holds no greater financial benefits to the insured than the existing contract. This is an example of
An unnecessary replacement
How often must an insurer file the the national association of insurance commissioners financial statement
Annually
How can partners guarantee a market for their share of the business in the event of death
Buy-sell agreements
Insurance Broker
Compensated for transacting on behalf of another with an insurer
An attempt by an agent to deter an insured from replacing an existing life insurance policy is called
Conservation
Which report of an insurance applicant's creditworthiness and personal characteristics may influence eligibility for life and health insurance?
Consumer report
As defined in the California insurance code, insurance is a
Contract
Your client has just bought aa new home which he has financed with a $150,000 7.5% interest, 30 year year bank loan. He would like to be sure that if he dies that unpaid balance of the mortgage would be paid. He wants a policy that will cover the mortgage balance no more, no less anytime during the life of the mortgage. Which policy is designed to meet this need
Decreasing term policy
What is the difference between deferred annuities and immediate annuities
Deferred annuities have longer accumulation periods
Which policy is a savings instrument designed to first accumulate funds and then systematically to liquidate the funds
Deferred annuity
If you have been convicted of a misdemeanor and that misdemeanor conviction is later expunged pursuant to California penal code section 1203.4, which of the following is true
Even though your misdemeanor conviction was expunged, you must still disclose you misdemeanor conviction on your individual application for an insurance license
When a family policy covers children, all of the following are true except
Evidence of insurability is required to convert coverage for children to permanent insurance
Death benefits that are received by a beneficiary are generally
Exempt from federal income tax
All of the following are true about term life insurance policies except the
Face amount is paid if the insured survives to the end of the policy period
A person owns a life annuity. He elects to receive annuity payments monthly for the remainder of his life with ten years certain. The annuity will make payments
For a minimum of 120 months and a maximum of the remainder of his life
Which of the following is not an option for the use of the policy dividends
Fund the distribution of monthly income payments
Which of the following is a correct statement about the premium payment modes? The total premium paid by a life policyowner for one policy year is
Greater if the premium is paid semiannually rather annually
What is one difference between group life and individual life underwriting
Individual life insurance requires the applicant to answer medical questions
If a life agent sells a whole life policy to a prospect on behalf of an insurer without an appointment, the
Insurer must submit a notice of appointment to the commissioner
The payor rider on a juvenile life policy provides that if the payor dies or becomes disabled before the insured juvenile reaches the age specified in the policy that the
Insurer will make the payments until the insured juvenile reaches a specified age usually twenty one or twenty two
The primary objectives of insurance regulation include all of the following except
Interpret policy provisions
Which policy covering tow or more individuals pays the face amount only when the first person dies
Joint life policy
A life insurance policy dividend is
Legally defined as a return of excess premium and not taxable
A person authorized by and on behalf of an insurer who transacts life, disability or life and accident and health insurance is defined as a
Life agent
Who are the members of the medical information bureau
Life and health insurers
Which two insurance products are commonly used to fund buy-sell agreements
Life insurance and disability insurance
An agent who violates the laws governing life insurance policy illustrations is subject to all of the following EXCEPT
Mandatory termination of all insurer appointments
A person who acts, offers to act, or assumes to act in a capacity where license is required without having a valid license, is guilty of a
Misdemeanor
All of the following qualify as background info as defined in section 1729.2 of the California insurance code, except
Misdemeanor charges
It is a federal offense for an insurance agent to do all of the following except
Misrepresent facts on an insurance application
The increase in the probability of a loss resulting from an insured's dishonest tendencies is known as
Moral hazard
Which component of a life insurance premium is based on the insured's age and gender
Mortality
The number of deaths during a year compared with the total number of persons exposed in the class is known as the
Mortality rate
The theory of probability is applied to life insurance through the use of
Mortality tables
Which of the following statements regarding risk is true
Only pure risks are insurable
People commonly purchase an annuity to protect against the risk of
Outliving their financial resources
Which type of life insurance policy gives an owner the right to share in the insurer's surplus
Participating
The life insurance grace period allows the insured to
Pay the premium after the due date without loss of coverage
Which benefits are provided by key employee insurance
Payment to a business when an important employee dies
When used in the california insurance code, the word may is intended to be
Permissive
Insurer expenses include all of the following Except
Policy Premiums
Loss retention is an effective risk management technique when all of the following conditions exist EXCEPT the
Probability of loss is unknown
Governing claim settlement practices prohibits all of the following acts of unfair discrimination Except denial of claim based on
Reckless Behavior
If an insurer must have its rates accepted by the Insurance Department prior to using them, the insurer would be operating in which of the following types of jurisdictions
Reckless Behavior
Which is an agreement in which an insurer contracts with a third party to insure itself against losses from insurance policies it issues
Reinsurance
Which type of insurance guarantees the right to renew the policy each year, regardless of health, but at an increased premium
Renewable term
What recourse does an insurer have if violation of a material warranty on the part of the insured is discovered
Rescission of the policy
Policies covered under the California life and health insurance guarantee
Self-funded group life
Which policy provision protects the insurer against possible adverse selection
Suicide clause
Which of the following is a characteristic of nonqualified annuities
Tax-deferred earnings
The direct response distribution of insurance utilizes all of the following to promote the sale of insurance except
Telephone call from an agent
The more times of an event is repeated, the more predictable the outcome becomes. This is an example of
The Law of Large Numbers
Which of the following is an express power given to the agent in an agency agreement
The authority to represent the insurer
A $50,000 whole life policy with a cash value of $10,000 has been in force for eleven years. The policyowner is unable to continue the premium payments. Which of the following describes the reduced paid-up nonforfeiture option
The cash value is used to select a $20,000 paid-up nonfeiture option
All of the following statements about contingent beneficiaries are true except
The contingent beneficiaries shares death proceeds equally with the primary beneficiary
The purchase of an insurance policy may accomplish all of the following for the insured except
The elimination of the risk
What is used to determine the amount of an annuity distribution that is exempt from taxation
The exclusion ratio
Why is the delivery of a life insurance policy important
The free-look period begins on the policy delivery date
All of the following statements about aleatory contracts are true except
The insured and insurer contribute equally to the contract
What rule is used to determine the importance of a representation
The materiality of concealment
In group life insurance, who is issued a certificate of insurance
The participant
The required contents of a policy include all of the following except
The probability of loss
Which policy provision allows an insured to continue coverage under a previously lapsed policy
The reinstatement provision
What does the statement life insurance creates an immediate estate mean
The total death benefit is paid whenever the insured dies
All of the following are requirements of a contract Except
There must be equal consideration between the parties
The insurer's department with primary responsibility for the risk selection process is called
Underwriting
What do we call the process whereby insurers decide which customers to insure and what coverage to offer
Underwriting
What is it called when an insurer uses high rates for an individual solely based on religion, race, or ethnic group
Unfair discrmination
The policyowner, age 50, has been paying the premiums on his whole life policy for fifteen years. He needs the equivalent of one-third of his policy's cash value for two years. He wants to continue to have the same amount of life insurance protection and he can afford to continue to pay the polices premium. Which of the following appear to be his best course of action
Use the policy loan provision to borrow money from the policy, but keep making the premium payments to keep the policy in force
According to the California insurance code, if an insurer's certificate of authority is revoked, the commissioner can proceed with any of the following actions except
Using guarantee funds to pay salaries
The insured bought an annuity ten years ago. He will retire in five years. To determine the value of his annuity, he must multiply the value of the accumulation units he own, times the value of the separate account. This type of annuity is known as a
Variable annuity
Which of the following contracts provides benefits that fluctuate automatically with investment results
Variable life insurance
The insured is totally and permanently disabled. The insured's policy continues in force without payment of further premium because the policy contains a
Waiver of premium provision
An insurance solicitor is a person authorized to
assist a broker or agent in selling insurance