State exam simulator- weighted exam
In Virginia, once a life insurance policy has been in force for _____year(s), it becomes incontestable.
2 years
Every _____year(s), an agents license in Virginia must be renewed.
2 years
Virginia required that an insurance agent must complete ___ hour(s) of continuing education on the subject of ethics every reporting period.
3
An agent who informs an applicant that there are no exclusions in an insurance policy has engaged in
Misrepresentation
Life insurance premiums are computed on what three factors ?
Mortality, interest, expenses
When must a producer provide disclosure about information practices to an applicant?
Prior to or at the time of signing the application
Giving up a known right on a voluntary basis is called a(n)
waiver
Any person who unknowingly violates Virginia insurance law may be punished for each violation by a penalty not to exceed
$1,000 with $10,000 cap
A teacher recently retired at age 63 and has a tax sheltered annuity (TSA). Periodic deposits total $120,000 and the value of the contract is now worth $200,000. How much is taxed if the current value is surrendered today?
$200,000
An agent who willfully violates the insurance code may, after a hearing, pay up to ______ per violation as a penalty
$5,000
An individual working part-time has a gross income of $5,000 for the year. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?
$5,000
The free look period provided in a life insurance policy is usually
10 days
Greg had recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy?
31 days
A life insurance policy can be backdated before the application date for up to _____ month(s)
6 months
According to ERSA regulations, a summary plan description must be provided to a new plan member within_______ days of the member's eligibility date.
90 days
Which of these is an accurate statement regarding the fixed period settlement option on a life insurance policy?
A portion of the payments paid to the beneficiary comes from interest calculated on the proceeds of the policy
The IRS has a "minimum coverage" rule regarding qualified retirement plans. This rule states that each qualified plan is required to
Benefit a braid cross-section of employees
Who normally pays the premium for group credit life insurance
Borrower
Tom the agent negotiates an agreement that unreasonably restrains the business of insurance. He has likely committed a violation of insurance law that falls under
Boycott, coercion and intimidation
Which of these is true regarding the exchange of consideration among parties involved in an insurance contract
Can be unequal
Which of these is NOT a true statement of the war exclusion
Civil insurrections apply
______ is the attempt made by an agent to intimidate or use force.
Coercion
What action may the Bureau of insurance take when it finds that a license applicant is not competent or untrustworthy
Decline to issue the license
In what way is a life insurance policy affected by an accelerated benefit payment?
Decreases the death benefit
Which of the following is BOT guaranteed in a whole life policy?
Dividend scale
Group life plans sold in Virginia typically contain a conversion option. If the insured elects this option, the new policy
Does NOT require evidence of insurability
An example of misrepresentation is:
Falsifying terms, benefits, advantages, or conditions of an insurance policy
Which settlement option makes minimum guaranteed dollar payments over a states number of years?
Fixed period
An annuity contract may be returned for a full refund during the
Free-look period
What is considered a valid reason for small corporations to insure the lives of its major stockholders?
Fund a buy-sell agreement
The administrator for a corporate pension plan bought an accumulation annuity contract for its 2,000 employees. All 2,000 participating employees received certificates of participation. What kind of contract is this?
Group deferred annuity
What is the name of the rider that provides an additional purchase option in a life insurance policy
Guaranteed insurability rider
If a group is considering applying for a group life policy it, Must
Have a minimum number of eligible persons
Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?
If Tom's employment is terminated, 20% of the funds would be forfeited
Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a states period of time has passed
Incontestable clause
A business may purchase an annuity for all of the following reasons EXCEPT Structuring a liability settlement payment Funding a non-qualified deferred compensation plan Accumulating assets on a tax-deferred basis Providing a pension to employees
Informally funding a non-qualified deferred compensation plan
How much is normally paid to a policyowner in a life (viatical) settlement? Total premiums paid plus interest Full face amount More than the face amount Less than the death benefit
Less than the death benefit
What is another teen used for a "pure" life annuity?
Life income
Which of these is NOT a common life insurance non feed either option?
Life income annuity
According to the federal fraud and false settlement act, which of these is considered to be an intentional violation
Making false entries in a company's books
An insurable interest in each others lives may exist in absence of an economic interest when the individuals are
Marriage partners
An agent advertising a life insurance policy MUST disclose the
Name of the actual insurer
During the sale of a life insurance policy, an agent may provide an incomplete illustration
Never
Paul is an agent who is licensed in Virginia but a resident of Maryland. P is considered to be a(n) ______ agent
Non resident
Rick the agent handles insurance premiums in an untrustworthy manner. His actions could find him guilty of
Not acting as a fiduciary
Which of these would likely be considered an Unfair Claims Settlement Practice?
Offering settlements that are less than the fair value to offset insurer expenses
Which of these is NOT an unfair claims settlement practice?
Offering to settle a claim by arbitration
When an insurer discovers ( during the claim process) that the insureds age was accidentally misstated on the life insurance application, the insurer will likely
Pay an amount the premiums would have purchased at the insureds actual age
The beneficiary of a life insurance policy is normally selected by whom
Policyowner
A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a
Profit-sharing plan
Which of these occurrences could improve an insurers ability to reduce premiums
Rate of earnings on investments increase
Which of these is NOT an unfair claim settlement practice
Refusing to pay persons bringing false or fraudulent claims
A transaction in which a new annuity is purchased and an old one is terminated is called
Replacement
According to the IRS, a company may NOT do which of the following in regards to funds in a qualified retirement plan?
Repossess the funds for business purposes
Switching Life insurance policies without tax consequence is permitted under
Section 1035 rules
Security laws passed by Congress are enforced by which Federal agency?
Security and Exchange Commission
XYZ Corp gives money to an employee to purchase a life insurance policy and allows the employee to select the beneficiary. What kind of plan is this?
Split-dollar
Which of the following entities does NOT establish regulations for variable insurance products
State Attorney General
What happens to the cash value of a market value adjusted annuity if it's surrendered prior to the end of the state guarantee period
Subject to market value adjustment
How are monthly life annuity benefit payments treated under a tax sheltered annuity (TSA)?
Taxed as ordinary income in the year received
When testing for the human immunodeficiency virus (HIV), Virginia law requires a consent form
That discloses who may receive a copy of the results
All of these statements concerning group credit life insurance are false EXCEPT
The face amount is based on the outstanding loan balance
Which of the following statements about the installments for a fixed period settlement option in life insurance policies is NOT true
The periodic payment amount is determined by the beneficiary's age
What happens when a policy owner borrows against the cash value of his life insurance policy?
The policy proceeds would be reduced by the outstanding loan balance
Who is the beneficiary in a life insurance policy
The stated person or entity who is designated to receive the death proceeds
Insurance crimes which affect interstate commerce are prosecuted by the
US Attorney General
Which of the following statements about universal life insurance is NOT true?
Universal life insurance normally has a minimum guaranteed cash value for duration of the policy
An agents insurance records must be provided to the state corporation commission
Upon request of the State Corporation Comission
An insurance policy that can also be classified as a securities product is called
Variable Life
A contract is considered void in all of the following situations except
When consideration is unequal
Life insurance replacement can be best defined as
a transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered
An individual who purchases a modified life insurance policy expects
an improvement in future income
An agreement is reached when an insurance contract is formed. Which of the following is NOT considered to be an element of an agreement?
equity
Death benefits from a life insurance policy are normally considered to be
exempt from federal income tax
Death proceeds from a life insurance policy are typically included in a deceased insured's gross estate
for federal income tax reasons
The powers directly given to a producer in an agency contract are called
to express
Upon meeting company requirements, a lapsed life insurance policy may be reinstated within ____ year(s)
3 years
A(n) ____ is a person appointed by an insurer that represents the company and presents policies on its behalf
Agent
An insurance application requires an applicant to make a full, accurate disclosure of the risk factor involved. Using this criteria, an insurance policy is considered what type of contract?
Contract of utmost good faith
A prospective client was intimidated by an agent to purchase an insurance contract. The agent could be found guilty of
Corecion
The _______ is required to notify the State Corporation Commission in the event of appointment termination
Insurer
U see federal law, which of the following actions may result in a producer becoming imprisoned?
Producer embezzling funds from an insurer
Which of the following actions may result in an agents license being suspended?
Rebating a portion of the commission to the insured
Which of the following is not a dividend option for a life insurance policy
Receiving the entire policy cash value
Which statement regarding the joint and survivor life insurance settlement option is NOT true
The amount of each installment is larger than the single life income option
Someone who is licensed to negotiate a viatical settlement contract is called a(n)
Viatical settlement broker
Which type of life insurance policy allows a policy owner the choice of investments along with flexible premium payments
Variable Universal Life
An insurer will typically assess a back-end load on a deferred annuity that is cancelled during the early contract years. What is this back-end load referred to as?
surrender charge
The owners cost basis for a non-qualified deferred annuity is typically the same as the
total premiums paid
Which of the following is generally a form of group credit life insurance?
Decreasing term insurance