Study 4

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

Common Disaster

Which of the following types of insurance policies is most commonly used in credit life insurance?

Decreasing term

Which of the following best describes the aleatory Nature of an insurance contract?

Exchange of unequal values

Which policy component decreases in decreasing term insurance?

Face amount

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

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

Interest only option

And insured has chosen joint and 2/3 Survivor as the settlement option what does it mean to the beneficiaries

The surviving beneficiary will continue receiving tothird of the benefit paid when both beneficiaries were alive

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

The paid up addition option uses the dividend

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

All the following statements about equity index annuities are correct except

the annuitant receives a fixed amount of return

All the following are true about variable products except

the premiums are invested in the insurer's general account

Which of the following allows the insured to relieve a minor insured from premium payments if the miners parents have died or become disabled?

Payor benefit

Who might receive dividends from a mutual insured?

Policyholders

If the policy owner the insured and the beneficiary under a life insurance policy are three different people who has the ownership policy right

Policyowner

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.

Which non-forfeiture option provides coverage for the longest period of time?

Reduced Paid-Up

An individual has been making periodic premium payments on an annuity the annuity income payments are scheduled to begin after one year since the annuity was purchased what type of annuity is it?

Referred

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

Replacement rule

For how long is an insurance company allowed to differ policy loan request?

Six months

Hey 60 year old participant in a 401 (k) plan takes a distribution and rolls it over to an IRA within 60 days which of the following is true

The amount of the distribution is reduced by the amount of a 20% withholding tax

The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the day of her husband's death who was elected the settlement option in this case

The beneficiary

If a life insurance policy has an irrevocable beneficiary designation,

The beneficiary can only be changed with written permission of the beneficiary

Which is not true about beneficiary designations?

The beneficiary must have insurable interest in the insured

Which is not true about beneficiary Designations?

The beneficiary must have insurable interest in the insured. A beneficiary is the person or interest to whom the policy proceeds will be paid upon the death of the insured. Beneficiaries do not have interest in the policy holder.

A corporation is the owner and beneficiary of the key person life policy if the corporation collects the policy benefit then

The benefit is received tax free

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects a policy benefit then

The benefit is received tax free

Which of the following is not true regarding a variable universal life policy?

The death benefit is fixed

Which of the following describes a tax advantage of a qualified retirement plan?

The earnings in the plan accumulate tax deferred.

Which of the following is incorrect concerning a non-contributory group plan?

The employees receive individual policies

Which of the following protects consumers against the circulation of an accurate or obsolete Personal or financial information

The fair credit reporting act

Which of the following insurance arrangements will be appropriate for a parent buying life insurance policy on a child where the parent is a policy owner?

Third-party ownership

After filing a claim and insured tells the insuer that there is more than one insurance policy in force. The insurer set aside the claim until he hears what the other company will paint. The insurers action will be classified as

Unfair

All the following are true regarding the convertibility option under a term life insurance policy except

Upon conversion the death benefit of the permanent policy will be reduced by 50%.

Which of the following cannot be included along with illustrations used to sell life insurance?

Vanishing premium information

When would a 20-pay whole life policy endow?

When the insured reaches age 100

The type of policy that can be changed from one that does not accumulate cash value to the one that does, is a

convertible term policy

All the following statements are true regarding tax qualified annuities except

employer contributions are not tax deductible

What do individuals use to transfer the risk of loss to a larger group

insurance

Which of the following is another term for the accumulation period of an annuity

pay in period

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

refund the premiums paid

And insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy stock performance declined in the cash value film to $10,000 if the insured dies how much will be paid out?

$50,000

And insured had a 10,000 term life policy the annual premium of 200 was due on February 1 however the insured failed to pay the premium he died on February 28 how much were the beneficiary receive from the policy

$9800

If an agent suspects that insurance fraud is being committed within how many days must the agent notify the insurance fraud unit of the department of insurance?

30 days

The commissioner of insurance issues a cease and desist order to an agent if the agent wishes to contest the charges in court how many days after the order was issued does the agent have to make the request

30 days

To attain currently insured status under Social Security a worker must have earned at least how many credits during the last 13 quarters

6 credits

Insurance policies are not drawn up through negotiations and an insured has little to say about its provisions were correct characteristic does this describe

Adhesion

All the following statements are Correct regarding credit life insurance except

Benefits are paid to the borrower's beneficiary.

What is a clause That describes a method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

Common disaster clause

And insured pays an annual premium to his insurer in return the insurer Promises to pay benefits in accordance with the terms of the contract. This is called

Consideration

Which of the following reports will provide the underwriter with the information about any insurance applicants credit?

Consumer report

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

Which of the following is used to compare the cost of one life insurance policy against another in order to guide prospective purchasers to policies that are competitively priced?

Cost comparison methods

And insurance professional advisor client regarding the benefits of her life insurance policy in exchange for a fee which of the following terms best describes this type of insurance professional?

Counselor

The usage of words or symbols that are similar to what entity is prohibited in life insurance advertisement?

Federal government

When doing business in the state and insurance company that is formed under the laws of another state is known as which type of insurer

Foreign

Which of the following occupations were not directly help to qualify someone for the office of commissioner of insurance

Insurance agent

As a field underwriter a producer is responsible for all the following tasks except

Issue the policy that is requested

Variable whole life insurance is based on what type of premium

Level fixed

Which of the following information about the applicant is not included in the general information section of the application for insurance?

Medical background

All the following would be considered an insurance transaction except

Obtaining an insurance license

What is the official name for the Social Security program?

Old-Age, Survivors, and Disability Insurance

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

Option B

An insured purchased a life policy in 2010 and died in 2017 the insurance company discovers at that time that the insured had missed stated information during the application process what can they do?

Pay the death benefit