State exam 215
Q and H are co-primary beneficiaries on the 100,000 Accidental Death and Dismemberment policy insuring their mother. Their father is the contingent beneficiary . If Q dies of cancer and the mother is killed in an auto accident two months later, the father will receive a Maximum of
$0
An insured purchased a $20,000 Whole life policy with Accidental Death and Dismemberment (AD&D). Three years later, the insured purposely took an overdose of sleeping pills which resulted in the insured's death. The insurance company will pay Maximum
$20,000
J, a 30 year old proposed insured, plans to retire at age 60 and wants to purchase life insurance that offers level premiums and life-long protection. If J also wants the policy to be paid -up when J retires,J should buy
30-pay Life
L is injured from a fall and permanently disabled. L will be eligible to file for Social Security benefits after he has been disabled for how many months?
5
A person may first become eligible for benefits under Social Security after having been disabled
5 months
Which of the following items may be used to include coverage or children under their parent's insurance policy?
A Term Rider
A variable Whole Life policy offers which of the following features?
A fixed, level Premium
Which of the following situations is an example of insurable interest?
A husband purchases a life insurance policy on his wife top pay off debts in the event of herdeath
WHich of the following parts of a life policy is guaranteed to be CORRECT?
A warranty
The Payor Clause of an insurance policy on a Juvenile provides which of the following benefits?
A wavier of premium if the payor becomes disabled
Which of the following provisions of a life insurance policy will pay a stated amount to an insured if the insured is blinded in an accident?
Accidental death and Dismembermentclause
N takes out a loan against a life insurance policy which is equal to one-half of the cash value. If N decides not to pay the interest when it is due, the insurance company will automatically
Add to the loan balance the amount of the interest due
All of the following provisions are required in a group life policy EXCEPT
An Accidental Death and Dismemberment Provision
Which of the following would be certificate holder under a trustee group life policy?
An employee
The feature of life insurance policy stating that the policy will not cover certain risks is called
An exclusion
The total cost of a policy is lowest when the premiums are paid on which of the following schedules?
Annually
Disability, as defined for social security purposes, describes an employee who is unable to engage in
Any occupation
If a life policy owner wants to take out a bank loan and the bank insist on collateral, the insured may
Assign the policy to the bank
A policy owner may change a revocable beneficiary at which of the following times?
At any time
A guaranteed insurability rider allows an insured to purchase additional insurance
At specified future dates without submitting proof of insurabulity
To be eligible for an association group life policy, a group MUST meet which of the following requirements?
Be formed for a purpose other than obtaining insurance
All of the following are distinguishing characteristics of group credit life programs EXCEPT
Benefits are paid to the borrower's Beneficiary
An insured bought an annuity for $80,000. The inured died after receiving only $50,000. The balance is paid in a lump sum to the insured's beneficiary. This is known as the
Cash Refund option
The concept of level premiums
Charges more than needed in early years
Coverage will begin on the day an insured signs a non medical application only if the producer takes which of the following actions on the same day?
Collects the initial premium
W applies for life insurance on W's five year old child and submits the initial annual premium. The producer issues W a receipt and says that coverage will be effective immediately if the application is approved, because no medial examination is required. Which of the following types of receipts did the producer issue?
Conditional
Which of the following features of a group Term Life Policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?
Conversion Priviege
Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?
Conversion Privilege
Which of the following policy sections enables a policy-owner to exchange one insurance policy for a policy of a different kind?
Conversion Privilege
Which pf the following policies provide temporary coverage that may be changed to permanent coverage without regard to the insured's health?
Convertible term
Which of the following factors are Most important when an insured owner is trying to decide whether to convert term insurance at the insured'd original age or the insured'd attained age?
Cost of insurance
Social Security provides all the following types of benefits EXCEPT
Dismemberment
The Pension Protection Act of 2006 is designed to
Encourages employee to increase contributions to their employer-sponsored retirement plans
Which of the following sections of a life insurance contract states that the application is part contract
Entire Contract Provision
Which of the following features would be used in a life insurance policy to limit benefits for loss occurring while the insured is flying as a student pilot?
Exclusion
The authority behind the requirements that an applicant for an Accident and Health policy MUST be notified of an investigation concerning the applicant's character, general reputation and mode of living is known as the
Fair Credit Reporting Act
What following are system that support the sale of insurance through agents and brokers EXCEPT?
Fraternal Benefit Society System
Which of the following is NOT considered to be group permanent plan?
Group credit
Which of the following statements is CORRECT about conversion of a group term life insurance on termination of employment?
If death occurs during the conversion period, the death benefit must be paid
Which of the following statements about Equity Indexed Life insurance is INCORRECT?
If the Actual investments differs from what was expected, the premiums will be either lowed of raised
Classification of Variable Annuities include
Immediate and Deferred
Which of the following statements is CORRECT about a minor beneficiary?
In most cases, insurers require that guardian be appointed in the beneficiary clause of the policy or that a guardian be designated in the will
An Adjustable Life policy owner may take all of the following actions without providing proof insurability EXCEPT
Increase the Face amount
What type of agent may represent a number of insurance companies under separate contractual agreement?
Independent Agent
All of the following conditions are included in group credit life programs EXPECT
Individual Policies
Which of the following clauses of an insurance contract states that a specified amount of money will be paid to a designated person on the death of a insured?
Insuring Agreement
Which life insurance arrangement is used to circumvent state insurable interest statutes Key Person Insurance?
Investor-Originated Life INsurance
Which of the following statement s about an incontestable clause is CORRECT
It allows an insurer to contest a claim during the contestable period
Which of the following statements id CORRECT about a Variable insurance contract?
It does not guarantee a return on the investment accounts
Which of the following statements is CORRECT about Credit life insurance?
It shall be issued in an amount not to exceed the total amount of indebtedness
J and K are married and have several children. J is the primary beneficiary on K's Accidental Death and Dismemberment (AD&D) policy and k's Sibling L is the contingent beneficiary. J, K, and L are involved in a train accident and K and L are killed instantly. The Accident Death benefits will be paid to
J only
A 40 year old insured who buys a Single Premium Whole Life policy and lives to age 85 will have paid total out-of-pocket cost that is
Less than the premiums paid for a Straight Life Policy
An Example of a Limited_pay Life policy is
Life Paid-Up at 65
An underwriter would use consumer reports to determine an applicant's
Likelihood of making premium payments
A policy that is overfunded, according to IRS tables, is classified as which of the following types pf policies?
Modified Endowment Contract
Which of the following statement describe the income tax treatment of policy owner dividends?
Only interest on accumulation is taxed
Investors-Originated Life Insurance (IOLI) is arrangement in which the death of the insured benefits the
Owner
Dividends from a stock company are paid to stockholders, whereas in a mutual company dividend are?
Paid to the Policyowner
The annual premium on an insured's life policy due September 4. If he died on September 21 without paying the premium, the insurance company would take which of the following actions?
Pay the death benefit less the past-due premium
IN a life insurance policy, the Consideration clause states that the policy owner's consideration consist of completing the application and
Paying the initial premium
An agent who sell a Juvenile Life Policy should recommend which of the following provisions to ensure that premiums will be waived if the policy owner becomes disabled?
Payor clause
The governing body of a mutual insurance company is elected by the
Policyholders
Who is considered the owner of mutual insurance company?
Policyholders
The policy feature that permits the policy owner to select the timing of payment is
Premium Mode
Which of the following statements is CORRECT about a Limited-Pay Life Policy?
Premium payment are limited to a specified number of a years
Which of the following is Correct about about the premium payment schedule for Whole Life Policy?
Premiums are payable throughout the insured's lifetime, and coverage continues until the insured's death
Which of the following statements is correct when comparing participating policies with non-participating policies ?
Premiums for participating policies are usually higher than for non-participating policies
Under Social Security, which of the following determines the full amount of retirement benefits for an eligible person?
Primary Insurance Amount (PIA)
The insured and sole beneficiary are involved in an accident in which the insured dies before the beneficiary. Under the Common Disaster provision of life insurance contract, which of the following statements must be correct.
Proceeds will be payable to the estate of the decreased beneficiary
The primary purpose of including a Suicide provision in a life insurance policy is to
Protect the insurer against the purchase of a policy in contemplation of Suicide
An insured must present evidence of insurability within a reasonable time after a policy has lapsed to excise which of the following provisions
Reinstatement
Which of the following provisions can an insured use to put a policy in force that has lapsed as a result of nonpayment of premium?
Reinstatement
An insured lapsed a life insurance policy one year ago and now wants to reestablish this coverage. The policy can be placed in force under the
Reinstatement Provision
Amounts of money that together with future premiums, interest, and survivorship benefits will fulfill an insurance company's obligations to pay future claims known as
Reserves
An insurance company will take which of the following actions if a producer submits an incomplete application for life insurance?
Return the application to the producer
A producer who discovers that answers to a series of questions on a life insurance application were omitted should take which of the following actions?
Schedule another appointment with the applicant to complete the unanswered Questions
Which of the following statements about Suicide clause is CORRECT with regard to an individual Life Policy?
Suicide may be excluded up to a year from a date issue of coverage while sane or insane
During the payout period of an annuity, the interest portion of the payment is
Taxed ordinary income
Credit policies MUST be issued in which of the following forms?
Term
Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period?
Term
Which type of coverage when selected will allow an applicant to have excess life insurance coverage?
Term rider
If an insurance company obtains an inspection report on a prospective insured, it must inform the prospect that it permitted to do so under which of the following federal laws?
The Fair Credit Report Act
Which of the following reflects the definition of a Modified Endowment Contract (MEC)?
The Guideline Level Premiums being the maximum level that can be paid into a policy and still have it qualify as a life insurance contract.
a policy owner decides to use dividends from a life insurance policy to purchase paid-up additions. The policy owner asks an agent to explain how the amount of the paid-up addition that is purchased each year will be determined. The agent;s explanation includes all of the following facts EXCEPT?
The age of the beneficiary
Changes made on an insurance application should be signed or initialed by which of the following parties
The applicant
L purchased a life insurance contract on July 16, 2004. L became severely depressed and on November 1, 2004 took his own life. Which of the following statement best describe how the insurance company settled the claim with l's beneficiaries?
The claim was denied under the suicide clause of the policy
A insured named his wife beneficiary and his son as contingent beneficiary. If the insured and his wife are killed in the same accident, the Common Disaster clause provides for payment to whom?
The insure's son
Which of the following features is typical of the Term Insurance?
The policy expires at the end of the Policy Period
Which of the following statement is Correct about Whole Life policy?
The policy owner may borrow against the cash value of the policy
Under a group Credit Life Policy, the amount of insurance on the life of a debtor is limited to
The total amount of the insured's loan
Proceeds from which of the following policies are subject to federal income tax?
Those Payable in installments
What is the purpose of insurance?
To replace the uncertainty of risk with Guarantees
The applicant's signature is required on life insurance application for which of the following reasons?
To represent that the statements on the Application are true to the best of the applicant's knowledge
An agent is required to register with the National Association of Securities Dealer (NASD) in order to sell which of the following policies?
Variable Life
An applicant for life insurance must be informed of their rights under the Fair Credit Report Act at which of the following times?
When the producer completes the insured's application
Which of the following policies guarantees to pay the face value either to the beneficiary when the insured dies or the insured when age 100 is attained?
Whole life
All of the following rights are extended to a policy owner EXCEPT
change a contract provision
An immediate annuity contract providers for
liquidation of principal sum
The dollar value of an annuity unit based on
returned on the equity portfolio supporting the annuity
Under a Limited-Pay Life policy, the death benefit coverage usually continues
to age 100
