Review Missed Questions Life Insurance Exam

Premiums

All of the following are examples of risk retention EXCEPT

Buy-sell agreement

All of the following are personal uses of life insurance EXCEPT

It is a life contingency option

All of the following statements are true regarding installments for fixed period annuity settlement option EXCEPT

Pay the policy proceeds only if it would have issued the policy

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Predicted needs of the family after the insured's death

Based on the Human Life Value Approach, which of the following is not used to calculate an individuals life value?

Seek higher returns

Equity Indexed Annuities

Agents contract with the principal

What documentation grants express authority to an agent?

Coverage ends and the policy cannot be reinstated

What happens when a policy is surrendered for its cash value?

Universal Life

What kind of policy allows withdrawals or partial surrenders?

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

What of the following is not a goal of risk retention?

Purchase a single premium policy for a reduced face amount

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Producer

Which of the following licensees is classified as a representatives of the insurance company and now allowed to represent an insured or claimant?

Calls based from outside of the US

Which of the following would not be considered an exception to the National Do Not Call List

Other-insured rider

A rider attached to a life insurance policy that provides coverage on the insureds family members is called the

The insurer will pay the full death benefit from the group policy to the beneficiary

An employee quits his job on May 15 and doesn't convert his Group Life Policy to an individual policy for 2 weeks. He dies in a car accident on June 1. What will happen?

Rebating

Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as

By state and federal agencies

How are variable annuities regulated

Until the beneficiary's death

How long will the beneficiary receive payments under the single life settlement option?

$3,000(income taxable as interest)

If a $100,000 of life insurance proceeds were used in a settlement option paying $13,000 per year for 10 years, which of the following would be taxable annually?

The annuitant will receive the higher of either the guaranteed minimum rate or current rate

In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?

90 days

Nonresident producers may become resident producers if they submit a completed application within how many days of establishing residence in PA

20 days

Once a viatical settlement contract has been completed, how long does the viatical settlement provider have to notify the insurance company that the life policy has been viaticated?

To create an estate

The best reason to purchase life insurance rather than annuities?

Annually Renewable Term

The death protection component of Universal Life Insurance is always

Annually Renewable Term

The death protection component of Universal Life insurance is always

$100,000

The insured under a $100,000 life insurance policy with triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity 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?

To purchase a smaller amount of the same type of insurance as the original policy

The paid up addition option uses the dividend

Interest only option

The policy owner wants to make sure that upon his death the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policy owner choose?

Fixed Amount

Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay the benefits

Signed waiver of premium

Upon policy delivery, the producer may be required to obtain any of the following except

Refund the premium paid

An insured committed suicide one year after his life insurance policy was issued. The insurer will

The beneficiary will only receive payments of the interest earned on the death benefit

Upon the death of the insured, the primary beneficiary discovers that the insured chose the INTEREST ONLY settlement option. What does this mean?

The application being given to a prospective insured

Which of the following is NOT the consideration in a policy?

Variable annuities are regulated solely by the state Department of Insurance

Which of the following is NOT true regarding the regulation of variable annuities?

It is a period during which the payments into the annuity grow tax deferred

Which of the following is TRUE regarding the accumulation period of an annuity

A claims adjuster advises that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

Which of the following would be considered an unfair claims settlement practice?

Option B

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Insurers

Who makes up the Medical Information Bureau

Costs of training a replacement

A key person insurance policy can pay for which of the following?

The date of medical exam

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. 5 Days later the applicant had to submit a medical exam. If the policy is issued what would be the policy's effective date?

The policy will not be affected.

An individual applies for a life policy. Two years ago he suffered a head injury from an accident. so he cannot remember parts from his past, but otherwise is competent.The insurer issues the policy and learns of his history one year later. What will probably happen?

A portion of the benefit up to a limit is tax free, the rest is taxable income

An individual has been diagnosed with Alzheimers. He is insured under life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?

Executive is the owner, Executive pays the premium

In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?

Death benefit

Which component increases in the increasing term insurance?

Insurance Guaranty Association

Which entity protects policy owners, insureds, and beneficiaries under life insurance policies, health insurance policies, annuity contracts, and supplemental contracts when insurers fail to perform contractual obligations due to financial impairment

Reduced paid-up

Which nonforfeiture option provides coverage for the longest period of time?

Viatical settlement providers

Which of the following are the people/entities who effectuate a viatical settlement contract?

It allows the owner to surrender the annuity without a charge

Which of the following best describes a bail-out provision?

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

Which of the following best describes the MIB?

They earn lower interest rates than fixed annuities

Which of the following is not true regarding Equity Indexed Annuities?

Pay a reduced death benefit

An insured has had a life insurance policy that he purchased 3 years ago when he was 40. He is killed in a car accident and it is discovered that he is actually 45 and not 43 as stated on the application. What will the company do?

It is used to lower premiums

An insurer invest the money it receives from premiums paid by its insureds. Which of the following is TRUe regarding the interest earned on the investments?

It is used to lower premiums

An insurer invests the money it receives from premiums paid by its insureds. &

Decreasing Term (Mortgage)

An individual has just borrowed $10,000 from his bank on a 5-yr installment loan requiring monthly payments. What type of life insurance policy would be best?

The insured may renew the policy for another 10 years but at a higher premium rate

An insured purchased a 10 year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10 year term?

False Advertising

Circulating deceptive sales material to the public is what type of Unfair Trade practice?

A certificate of authority

In order for a foreign insurer to do business in this state, it must apply for and obtain

The Insurance Department

In order to become a viatical settlement provide, an application must be made with

Reduced paid-up

Which nonforfeiture options provides coverage for the longest period of time?