quiz 2
A licensed life agent may present an application to an insurer for which they are not appointed. Not more than ____ days after the agent submits an application for which the insurer issues a policy, the insurer shall forward a notice of appointment to the Commissioner.
14
All of the following are true regarding convertible term life insurance EXCEPT:
All term life is convertible
Which type of life insurance is most expensive in the long run?
Term life
All of the following are required to be included in all insurance policies EXCEPT:
The financial rating of the insurance company
Life-only agents or accident and health agents who are also licensed as property/casualty broker-agents must complete ____ hours of continuing education each two-year licensing period.
24
All life insurance policies and annuities offered for sale to individuals age 60 or older in this state shall provide a free look period of at least ____ days.
30
Replacing insurers shall provide its new policyowners with the right to an unconditional refund of all premiums paid during a ____-day free look period starting from the date of delivery of the new policy.
30
It shall be the obligation of each agent to preserve and maintain all applicable records in their possession, in addition to those records transmitted to the insurer, at their principal place of business for a minimum of ____ years:
5
An insurer organized under the laws of another state who is legally transacting insurance in this state is known as:
A foreign insurer
All of the following definitions are correct EXCEPT:
A hazard is a cause of loss
All of the following are true regarding warranties EXCEPT:
A particular form of words is necessary to create a warranty
All of the following are true regarding warranties in an insurance contract EXCEPT:
A particular form of words is necessary to create a warranty
On an annuity, the person whose life the contract is based upon is known as the:
Annuitant
All of the following are nonforfeiture provisions in a cash value life insurance policy EXCEPT
Automatic premium loan
A conscious decision not to participate in situations, events or circumstances which could create the possibility of loss is a risk management method known as risk:
Avoidance
When can a representation be altered or withdrawn?
Before the insurance is effected, but not afterwards
A person shall not solicit, negotiate, or effect contracts of insurance unless the person holds a valid license from the Commissioner authorizing them to act in that capacity. Any person who transacts insurance without a valid license to do so is guilty of a misdemeanor punishable by:
Both a fine not exceeding $50,000 and up to 1 year in a county jail
Life insurance may consist of all of the following EXCEPT:
Buy/sell agreements
All of the following are ways to reduce risk EXCEPT:
Buying insurance
All of the following are true regarding representations EXCEPT:
California Department of Managed Health Care
An individual who assists consumers with enrollment into the programs administered by the California Health Benefit Exchange is known as a(n)?
Certified insurance agent
An agent must provide to all applicants at the time of application or receipt of premium monies the effective date of coverage when selling all of the following types of insurance EXCEPT:
Commercial General Liability
A person who has been convicted of a felony involving breach of trust, dishonesty, or insurance crimes defined in U.S. Code Section 1033 is a prohibited person and cannot engage in insurance activities in this state without the prior written consent of the _______.
Commissioner
The life insurance provision that protects the contingent beneficiary by presuming that the insured was the last person to die when the insured and the primary beneficiary both die as a result of the same accident is known as the ________ clause.
Common disaster
Transacting insurance includes all of the following activities EXCEPT:
Compiling a list of prospects
Any attempt by an existing insurer or its agent to dissuade a policyowner from the replacement of existing life insurance is known as:
Conservation
On what type of life insurance is the policyholder also the beneficiary?
Credit life
A hazard is defined as something that increases the risk. Which of the following is considered to be a morale hazard?
Driving recklessly
Which life insurance policy provides protection for the insured's entire family?
Family life policy
Upon termination of all appointments, the permanent license of an agent shall not be canceled, but shall become inactive. A license may be reactivated at any time prior to its expiration by:
Filing a new appointment
In order to get the free look period started, insurers may deliver the policy by any of the following methods EXCEPT:
First class mail
What is the first Whole life insurance policy provision that applies when the insured does not pay their premium when due?
Grace period
Neglecting to communicate that which a party knows and ought to communicate is known as:
Grounds for rescission
The Insurance Commissioner may deny an insurance license application without a hearing:
If the applicant has a final conviction of a felony
Which type of annuity has no accumulation period?
Immediate
When must a licensee notify the Insurance Commissioner of a change of address?
Immediately
Under the California Insurance Code (CIC), neither party to a contract of insurance is bound to communicate any of the following EXCEPT:
Information known to be material
Which of the following must be communicated to an insurance underwriter by an applicant for an insurance contract?
Information that may affect the material perils contemplated
When an insurer can no longer meet its financial obligations when they are due, the insurer is considered to be:
Insolvent
The party covered by an individual or group life insurance policy is known as the:
Insured
The neglect to communicate that which a party knows, and ought to communicate, is concealment. Concealment entitles the injured party to rescind the insurance if it is:
Intentional or unintentional
Every licensee shall file with the Commissioner his or her true name and also all fictitious names under which he or she conducts business. The Commissioner may disapprove the use of any true or fictitious name for all of the following reasons EXCEPT:
It is the bona fide natural name of an individual
All of the following are true regarding life insurance insurable interest EXCEPT:
It must exist at the time of loss
Under Section 1669 of the California Insurance Code (CIC), the Commissioner may, without a hearing, deny an application or suspend or revoke any permanent license for all of the following reasons EXCEPT:
Lack of integrity or good business reputation
A written agreement between a provider and an owner with no health problems under which the owner agrees to sell their life insurance policy for compensation that is greater than their cash surrender value but less than their death benefit is known as a(n):
Life Settlement contract
Which annuity payout option has no beneficiary?
Life income
The rules regarding replacement are designed to protect the interests of:
Life insurance and annuity purchasers
A life settlement broker represents and owes a fiduciary duty only to the ______.
Life insurance policyowner
Fixed annuities may offer all of the following advantages EXCEPT:
Life insurance protection
Which of the following life insurance settlement options has no tax implications?
Lump sum
An insurer or agent who makes any statement which is misleading for the purpose of inducing another person to take out a policy of insurance or for the purpose of inducing them to lapse, forfeit or surrender their insurance may be guilty of _______.
Misrepresentation
Your license will be considered to be inactive when you:
No longer have any appointments
If an annuity owner with a 20-year lifespan annuitizes with a Life income with 10-year period certain payout option dies after 11 years, their beneficiary will receive:
Nothing
Any person who transacts insurance without a valid license is guilty of a misdemeanor punishable by a fine not exceeding $50,000 or by imprisonment in a county jail for a period not exceeding ____ year(s), or by both a fine and imprisonment:
One (1)
A deferred annuity always has a beneficiary during the:
Pay-in period
The accumulation period on a deferred annuity is also known as the:
Pay-in period
A cause of loss is also known as a(n):
Peril
A false representation on a signed claim form may subject the insured to _________.
Perjury
A written instrument in which a contract of insurance is set forth is a(n):
Policy
A Life settlement broker represents a life insurance:
Policyowner
All of the following are true regarding Universal life EXCEPT:
Premiums are invested in the insurer's separate account
Agents must provide prospective life insurance purchasers a Buyer's Guide:
Prior to accepting the applicant's initial premium
The main purpose of life insurance is:
Protection
Since level term policies often lapse at the end of a term due to the increase in premium, some insurers have attempted to improve their "persistency" by offering their insureds a:
Re-entry option
Which nonforfeiture option provides the insured with the longest period of coverage?
Reduced paid up
When an insurer voids an insurance contract due to an intentionally fraudulent omission by the insured of a material fact, it is known as:
Rescission
A life insurance plan where the employer pays that part of the premium that is allocated to the cash value and the employee pays the difference is known as a:
Split dollar plan
Acting as an agent for a nonadmitted insurer in the transaction of insurance in this state is considered to be a misdemeanor unless acting as a:
Surplus lines broker
Acting as an agent for a nonadmitted insurer is considered to be a misdemeanor in this state EXCEPT when acting as a ______.
Surplus lines broker
All of the following must be specified in all insurance policies EXCEPT
The financial rating of the insurer
All of the following must be specified in an insurance policy EXCEPT:
The financial rating of the insurer
All of the following are false about Group life insurance EXCEPT:
The grace period is 31 days
A Life Settlement broker represents the:
The life insurance policyowner
All of the following are true regarding the reinstatement of a lapsed life insurance policy EXCEPT:
The premium on a reinstated policy is based upon the insured's current age
An example of a fiduciary duty is:
The trust that your client places in you in regard to handling premiums
Which of the following does NOT allow an insurer to rescind a contract?
The violation of an immaterial warranty by either party
All premiums received by any person acting as a licensee are received and held by that person in a fiduciary capacity. Any such person who diverts those fiduciary funds to their own use is guilty of:
Theft
Any licensee who diverts fiduciary funds to his or her own use is guilty of:
Theft
As specified by the California Insurance Code (CIC), every person must have insurable interest in the person insured at the time of application. Every person has an insurable interest in the life or health of all of the following persons EXCEPT:
Their best friend
Which of the following must be printed on every licensee's business cards, written price quotations and printed advertisements:
Their insurance license number
All of the following are true regarding life insurance mortality tables EXCEPT:
They are used to determine which people will die this year
All of the following are true regarding life insurance policies issued by mutual insurers EXCEPT:
They may pay dividends to their stockholders
All of the following are true regarding representations EXCEPT:
They may qualify as an express provision in a contract of insurance
All of the following are true regarding an insurance solicitor EXCEPT:
They must be appointed by an admitted insurer
All of the following are true regarding representations EXCEPT:
They must be in writing
All of the following are true regarding an insurance broker EXCEPT:
They transact insurance other than property & casualty
Making an insured whole again after a loss is known as:
To indemnify
The uncertainty about loss that exists whenever more than one outcome is possible is called:
Transacting without a license is a felony
Buying life insurance is a form of risk:
Transfer
The Department within an insurer that is responsible for the evaluation, selection and classification of insurable risks in a manner that is equitable for insureds and profitable for the insurer is known as the ________ Department:
Underwriting
The California Life and Health Insurance Guarantee Association will provide coverage for which of the following types of insurance?
Universal life
The rules regarding replacement apply when replacing which of the following types of life insurance?
Universal life
Agents selling which of the following types of life insurance products would have to be licensed by FINRA?
Variable/Universal life
A licensee shall notify the Commissioner in writing within ____ days of the date they learn of any change in their background information.
30
If a Life insurer issues a policy based upon an application submitted by an agent who is not their appointee, the insurer must send a Notice of Appointment to the Commissioner within:
14 days
A 30-year-old male is considering buying a $100,000 Whole life insurance policy. Which contract would have the highest annual premium?
20 pay life
If a currently insured Social Security participant dies and leaves a 30-year-old spouse and 10-year-old child as survivors, how long is the "black-out" period?
24 years
On group life insurance, dependent children may be covered up to age:
26
Where replacement is involved, every life insurer that uses an agent in a life insurance or annuity sale shall send to the existing life insurer a written communication advising of the replacement within ____ working days of the date the application was received.
3
Life insurance policies and annuities sold to persons age 60 or older must contain an examination period of ____ days after receipt of the policy for purposes of review, at which time the applicant may return the contract for a full refund of premium.
30
Under social security, being fully insured entitles a worker and family to full benefits. To achieve fully insured status, an individual must attain at least ____ quarters of coverage.
40
The main source of life insurance underwriting information is the:
: Application
Which of the following would not be considered to be ordinary life insurance?
: Group
If a corporation and a shareholder enter into an agreement that requires the corporation to buy the shareholder's shares upon his or her death, they have entered into:
A buy/sell agreement
All of following are required nonforfeiture options or provisions on a cash value life insurance policy EXCEPT:
Absolute assignment
Group life insurance policies may exclude all of the following EXCEPT:
Accidents
The incontestability clause in a life insurance policy protects the insured by preventing an insurer from denying a claim:
After the policy has been in effect for a specified period of time
The person upon whose life an annuity is based is known as the:
Annuitant
The owner of a life insurance policy may do all of the following EXCEPT:
Change the dividend scale
Agents must send all of the following to the replacing insurer when replacing life insurance EXCEPT:
Copies of all printed communications used for presentation to the applicant
An individual who obtains a 30 year mortgage and would like insurance coverage which would pay off the mortgage in the event of his or her death and no more and no less, would purchase:
Decreasing term
====Under a long-term care rider, which of the following are considered to be activities of daily living?
Dressing and eating
The purchase of insurance does all of the following EXCEPT:
Eliminates risk
A representation that fails to correspond with its assertions or stipulations is:
False
If the beneficiary of a life insurance policy wants $1,000 per month for as long as the money lasts, they should choose the ________ settlement option.
Fixed amount
If the beneficiary of a life insurance policy wants to take the proceeds over a 5 year period, they should select the ______ settlement option.
Fixed period
When using the needs approach to determine how much life insurance a client should buy, producers should consider all of the following EXCEPT:
Future earnings potential
The life insurance rate-making components "Mortality + Expenses - Investment Income" equal the life insurance:
Gross premium
Which type of life insurance has a tax-deductible premium?
Group life
All of the following are true regarding social security disability income benefits EXCEPT:
Individuals must meet the own job definition of total disability
The person upon whose life a life insurance policy is based is known as the:
Insured
Which of the following life insurance settlement options enables the beneficiary to conserve the proceeds of a life insurance policy?
Interest only
If a whole life policy is being kept in force by use of the waiver of premium rider, what happens to the policyowner's cash value?
It will accumulate in the usual manner
The greater the number of similar exposure units insured, the easier it will be to predict future claims based upon the law of:
Large numbers
Loans are taxable on which of the following types of life insurance?
Modified Endowments
List in order from the lowest annual premium to the highest:
Modified, ordinary, limited pay, single premium
Which mode of premium payment would have the highest overall annual cost?
Monthly
All of the following are dividend options on a participating life insurance policy EXCEPT:
Monthly income
Which risk classification will have the highest premium?
Non-standard
Adding a comprehensive long-term care rider to a life insurance policy will provide the insured with which of the following coverages:
Nursing home and home based care
All of the following are true regarding employee Group life insurance EXCEPT:
On a contributory group plan, 100% of the eligible employees must enroll
If an insured's medical conditions indicate that more information is needed, the underwriter will:
Order an attending physician's statement
Social security provides protection for all of the following EXCEPT:
Poor investments
Which of the following annuity benefit payment options would generate the highest monthly payments to the contract owner upon annuitization?
Pure or straight life
The chance of loss without any possibility for gain is known as:
Pure risk
When a policyowner uses the cash value in their policy to buy a lesser amount of permanent life insurance, they have exercised which nonforfeiture option:
Reduced paid-up
Which type of term life insurance has a level face amount but a premium that increases each year as the insured gets older?
Renewable
An appointment as an agent of an insurer becomes effective on the date it is:
Signed by the insurer
A person who receives a bonus at work and elects to use the money to buy an annuity that will start paying monthly payments right away has purchased a:
Single premium immediate annuity
The premium that an employer pays for group life insurance coverage for an employee that exceeds $50,000 in coverage is:
Taxable as income to the employee
In the case of a variable annuity sold to a senior citizen in this state for which the owner has directed that the premium be invested in the mutual funds underlying the contract during the 30-day cancellation period, cancellation during that period entitles the owner to a refund of:
The account value
The transfer of risk to an insurance company is an effective risk management technique when:
The amount and frequency of future losses are unknown
All of the following are true regarding employee Group life insurance EXCEPT:
The beneficiary is the employer
All of the following are true regarding annuities EXCEPT:
The contract owner and the annuitant must be the same person
Which of the following is not eligible for tax deferral under IRC Section 1035?
The exchange of an annuity for life insurance
Which of the following best describes the entire contract clause as it relates to life insurance?
The policy and the application, if attached at issue
A life settlement broker represents which of the following in a life settlement transaction:
The policyowner
All of the following are true regarding the reinstatement of a lapsed life insurance policy EXCEPT:
The policyowner has up to three (3) years to apply to reinstate a policy that was surrendered for cash
All of the following are true regarding key person life insurance EXCEPT:
The premium is tax deductible for the employer as a business expense
All of the following are true about the guaranteed insurability rider EXCEPT:
The premiums charged for the additional coverage is based upon the insured's original age
vAll of the following are true regarding participating life insurers EXCEPT:
They are owned by their stock holders
All of the following are true regarding life insurance company underwriting requirements EXCEPT
They are standardized by the Commissioner
All of the following are true regarding mutual insurance companies EXCEPT:
They issue non-participating policies
All of the following are true regarding dividends paid by a mutual life insurance company EXCEPT:
They must be paid in cash
If an employer offers employees the option of voluntarily increasing their group life coverage to an amount that is more than the group life policy normally covers, who is responsible for paying the premium for the elective coverage?
Those employees who elect to increase coverage
The department of an insurer that is responsible for classifying risks is:
Underwriting
If a client has to multiply the value of an accumulation unit by the number of units he or she owns in the separate account in order to determine the value of his or her annuity, he or she must have a(an):
Variable annuity
A client who wants life insurance protection and cash values that fluctuate in value based upon the performance of a separate account should purchase:
Variable life
Applicant
Which of the following completes the application for life insurance?
The source of dividends paid to the owners of participating life insurance policies issued by mutual insurers is:
vEarned surplus