PassNow CA Life

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

Telling a client that his first premium will be waived if he purchased the insurance policy today

Which of the following is NOT a goal of risk retention?

To minimize the insured's level of liability in the event of loss

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

Twisting

A life insurance policy illustration may NOT include

Vanishing premiums if the policy becomes paid up with nonguarenteed elements paying future premiums

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium.

When would a 20-pay whole life policy endow?

When the insured reaches age 100

Which option provides a single beneficiary with income for the rest of his/her life?

Single Life Option

Any person who engages in any unfair method of competition or deceptive act is liable to the state for a civil penalty and a fine of $5,000 for each act. In addition, if it is determined that the act is willful the fine will NOT exceed

$10,000.

J purchased a $100,000 Joint Life policy that covered his life and the life of his wife. Eight years later, he died in an automobile accident. How much will the wife receive from the policy?

$100,000

M is the owner of a $100,000 life policy with a triple indemnity rider for accidental death. When M is killed in a car accident, it is determined that the accident was his fault. The triple indemnity rider in M's 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?

$100,000

An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds

$50,000

What is the limiting age for dependent children of the insured employee in a group life plan (other than disabled children)?

26

Replacement of life insurance and annuities policies requires for the replacing and existing insurers to retain evidence of all signed applications and disclosures for no less than

3 years.

Every policy of individual life insurance must include a notice of right to cancel the policy, stating the specific time frame for the free-look period. Once the insured has cancelled the policy, within how many days must the insurer refund all premiums and policy fees?

30 days.

All of the following could own group life insurance EXCEPT

A group needing low-cost life insurance.

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

Aleatory

Mortality cost is used to determine

An insured's premium.

The death protection component of Universal Life Insurance is always

Annually Renewable Term

Carol is insured under her employer's group life insurance plan at her place of employment. All of the following statements about her coverage are true EXCEPT

Carol could choose what type of insurance her conversion policy provided (Term or Permanent).

Which of the following entities or individuals evaluates requests for payment by insureds after a loss has occurred?

Claims department

Which of the following is true regarding dividend-related taxation?

Dividends are not taxable.

Which of the following best describes the aleatory nature of an insurance contract?

Exchange of unequal values

Insurer X charges the premium from its insured customers, passing on operating expenses for the company. The operating expenses plus the premium equals the "gross" premium. What is another name for the operating costs for Insurer X?

Expense loading

A family's need for income is greatest during the

Family Dependency Period.

If taken as a lump sum, life insurance proceeds to beneficiaries are passed

Free of federal income taxation.

An insured who is less than 60 years of age has the right to cancel his insurance policy

From the date of policy delivery through a period of 10 to 30 days and receive a full refund of premium and policy fees.

The insured's right to cancel an insurance policy, in which all premiums will be refunded, extends

From the date of policy delivery to the insured through a period of 10 to 30 days after that date.

What kind of policy does NOT typically require proof of insurability?

Group insurance

What kind of policy issues certificates of insurance to insureds?

Group insurance

If Tom's policy allows him to make periodic additions to the face amount at standard rates, without proving insurability, his policy includes a

Guaranteed insurability option.

An individual delays buying life insurance for himself. As time passes, which factor is likely to raise the cost of his life insurance when he finally purchases it?

He is 3 years older than he was when he first considered buying insurance.

Which of the following is true about a defined benefit plan?

High-salaried employees with only a few years until retirement receive the highest contribution.

A projection of insurance needs that is based upon the capitalization of an applicant's future earnings is

Human life value approach.

Which of the following is true regarding a policy with a face value less than $10,000?

If it's returned during the free look period, the agreement will be void.

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an

Interest-sensitive Whole Life.

Which of the following best describes the MIB?

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

An insurer has been found guilty of a Code violation regarding replacement. The insurer then repeats the violation. Which of the following is true?

It will be liable for penalties of no less than $30,000 and no more than $300,000 per violation.

Which statement is NOT true regarding a Straight Life policy?

Its premium steadily decreases over time, in response to its growing cash value.

Paul is the policyowner of a life insurance policy which will increase significantly in face amount (death benefit) when the insured reaches an age specified in the policy. This policy is referred to as a

Jumping juvenile policy.

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?

Lower

Which of the following is NOT true regarding the Needs Approach method of determining the value of an individual's life?

Need is predicted using the number of years until the insured's retirement.

Tom is a licensed insurance agent. While at lunch, he overhears a conversation that leads him to believe a person is committing Worker's Compensation fraud. If Tom makes a written report to a law enforcement agency and the person is investigated, but it turns out that Tom was mistaken, he can be sued for

Nothing. The Code gives Tom legal immunity.

What is a definition of a unilateral contract?

One-sided; only one party makes an enforceable promise

All of the following statements are true regarding group insurance EXCEPT

Participants in the policy each receive a policy.

Which of the following are established by the employer to provide specific benefits to eligible employees at retirement?

Pension plans

All of the following are examples of risk retention EXCEPT

Premiums

During the process of reinsurance an insurance company that has its property risks reinsured by another provider is called

Primary insurer.

Which of the following distinguishes a Group Life Policy from an Individual Life Insurance Policy?

Reduced adverse selection

Monthly payments to workers age 62 or older who have worked long enough under the Social Security System to become fully insured are

Retirement benefits.

Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?

SEPs limit participation to members of closely held corporations.

What is the purpose of a fixed-period settlement option?

To provide a guaranteed income for a certain amount of time

An insured files a $100,000 claim for disability income benefits from her nonoccupational disability policy. Her injury is work-related, but she tells both her doctor and her insurance company that the injury occurred while she was on vacation. The maximum fine that the insured could be ordered to pay if convicted of insurance fraud is

$200,000.

Concerning AIDS and HIV risks, all of the following acts may subject an insurer to liability claims or fines EXCEPT

Declining applicant for a positive HIV test result.

Concerning Juvenile Life insurance, which of the following statements is INCORRECT?

Juvenile Life is classified as any life insurance purchased by a minor.

Which of the following would most likely start a tax-sheltered annuity?

The elderly

Of the following statements, which is FALSE concerning Social Security Disability Benefits?

The individual must be unable to perform the duties of any occupation for which he/she is reasonably suited or trained.

Richard is the Vice-President of a major toy company. The President of the company has offered him a special individual annuity plan that is unavailable to lower-echelon employees. This plan would involve using before-tax corporate dollars to fund, and it does not meet government approval standards. This annuity plan is

A nonqualified annuity plan.

In compliance with the California Insurance Code, individual life insurance policies that are delivered in this state must include a disclosure notice on the cover page. This notice should provide all of the following information EXCEPT

Agent's commissions.

What is reinsurance?

An agreement between a ceding insurer and assuming insurer

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

Depreciation period

Annually renewable term policies provide a level death benefit for a premium that

Increases annually.

An immediate annuity purchased with the face amount at death or with the cash value at surrender can be referred as which one of the following?

Settlement option

The advantage of qualified plans to employers is

Tax deductible contributions.

Which of the following would provide an underwriter with information concerning an applicant's health history?

The Medical Information Bureau

According to California law, all of the following may be covered as dependents under group life insurance EXCEPT

The insured's elderly parents living with the insured.

If Karen suspects that one of her clients may be attempting to collect on a false claim, she should report this to

The insurer's fraud prevention unit.

All of the following are true of an annuity owner EXCEPT

The owner must be the party to receive benefits