Study 3
Which of the following is the required number of Participants in a contributory group plan
75%
Which of the following is the required number of participants in a contributory group plan?
75%
Insurance policies are not drawn up through negotiations and an insured has little to say about his provisions what contract characteristic does this describe?
Adhesion
Insurance policies are not drawn up through negotiations and and insured has little to say about its provisions. What contract characteristic does this describe?
Adhesion
All of the following are true of the federal tax advantages of a qualified plan except
At distribution, all amounts received by the employee are free of taxes.
Simple plans require all the following except
At least 1,000 employees.
A policy owner fails to pay the premium doing his whole life policy after the grace period passes but the policy remains in force this is due to a provision?
Automatic premium loan
All the following employees may use a 403(b) Plan for their retirement except
CEO of private corporation.
What does liquidy referred to in a life insurance policy
Cash values can be borrowed at any time
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable the contract is
Conditional
Contracts that are prepared by one party and submitted to the other party on a take it or leave it bases are Classified as
Contract of adhesion
When an individual teens and insurance license for the primary purpose of writing insurance on him or herself or for members of his or her immediate family or business this is called
Control business
According to the entire contract provision what document must be part of the insurance policy
Copy of the original application
Which of the following actions is not in violation of the unfair claims settlement practices act?
Denying an unsubstantiated claim
An individual is purchasing a permanent life insurance policy with a face value of $25,000. Well this is all the insurance that he can afford at this time he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed insurability option
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate
What is the benefit of choosing extended term As a nonforfeiture option
It has the highest amount of insurance protection
Which of the following is not true regarding a certificate of authority?
It is issued to group insurance participants
Which of the following is not true regarding a non-qualified retirement plan
It needs IRS approval
Which of the following is not true regarding a non-qualified retirement plan?
It needs IRS approval
On a participating insurance policy issued by mutual insurance company dividends paid to policyholders are
Not taxable since the IRS treats them as a return of a portion of the premium paid
The dividend option was the policy owner uses dividends to purchase a term policy for one year is referred to as the
One year term option
The dividend option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the
One-year term option.
Which of the following explains a policy owners right to change beneficiaries choose options and receive proceeds of a policy
Owner's Rights
Which of the following explains the policy owners right to change beneficiaries choose options and receive proceeds of a policy?
Owner's Rights
If a person is compensated for a testimonial in an advertisement which of the following statements should be included in the advertisement?
Paid endorsement
Which of the following writers would not cause the death benefit to increase?
Pay your benefit rider
Which of the following is correct concerning the taxation of premiums in a key person life insurance policy?
Premiums are not tax deductible as a business expense.
In which of the following instances where the premium be tax deductible?
Premiums paid by an employer on a $30,000 group term life insurance plan for employees
Which nonforfeiture Option provides coverage for the longest period of time?
Reduced Paid-Up
A man decided to purchase a $100,000 annually renewable term life policy to provide additional protection and to his children finish college. He discovered that his policy
Required a premium increase each renewal
A man decided to purchase a $100,000 annually renewable term life policy to provide additional protection until his children finish college. He discovered that his policy
Required a premium increase each renewal
The ownership provision entitles a policy owner to do all the following except
Set premium rates
Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?
Standard risk is representative of the majority of people.
Which of the following riders is often used in business life Insurance policies when the policy owner needs to change the insured under the policy?
Substitute insured rider
Which of the following writers is often used in business life insurance policies when the policy owner needs to change the insured under the policy?
Substitute insured rider
The advantage of qualified plans to employers is
Tax-deductible contributions
The interest earned on policy dividends is
Taxable
Which of the following when attached to a permanent life insurance policy allows the policy owner to customize a policy to provide an additional amount of temporary insurance on the insured or allows amounts of temporary insurance to cover other family members
Term rider
Which of the following is true regarding variable annuities?
The annuitant assumes the risk on investment
Which of the following is true regarding variable annuities?
The annuitant assumes the risks on investment
Which is Not true about beneficiary designations?
The beneficiary must have insurable interest in the insured.
A 40 year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarried and dies at age 61, leaving 2 grown-up children. Assuming he never changed the beneficiary, The policy proceeds will go to
The insured's state
Which of the following is not required on an illustration used in the sale of a life insurance policy
The name of the primary and secondary beneficiaries
What is the advantage of reinstating a policy instead of applying for a new one
The original age is used for premium determination
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination
If an insured issued a policy based on the application that had unanswered questions which of the following will be true
The policy will be interpreted as if the insure waived his right to have an answer on the application
Which of the following best defines target premium in a universal life policy?
The recommended amount to keep the policy in force throughout its lifetime
How are contributions to a tax sheltered annuity treated with regards to taxation?
They are not included as income for the employee, but are taxable upon distribution.
Which of the following is not true regarding equity indexed annuity's
They earn lower interest rates then fixed annuities
Under simple plans participating employees may differ up to a specified amount each year and the employer then makes a matching contribution up to an amount equal to what percent of the employees annual wages?
Three
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
How long is he incontestability group life insurance policies issued in Texas?
Two years
Which of the following is a basic source of information used by the company in the risk selection process
application
The term fixed in a fixed annuity refers to all the following except
death benefit
Which two terms are associated directly with the premium
level or flexible
The interest earned on policy dividends is
taxable
All the following are true regarding a decreasing term policy except
the payable premium amount steadily declines throughout the duration of the contract
All of the following are true about variable products except
the premiums are invested in the insurer's general account
