test
all of the following are general requirements of a qualified plan except
the plan must be temporary
An insurer incorporated under the laws of another state but doing business in this state is considered
foreign
what is primary duty of the commissioner of insurance?
approve policy forms and rates
sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death
insuring clause
insurance contracts are unilateral in nature. what does that mean
only one party makes a promise.
All of the following are true of annually renewable term insurance EXCEPT
Proof of insurability must be provided at each renewal
All of the following are true regarding a producer's fiduciary responsibilities EXCEPT
producers may commingle personal funds with company funds.
to qualify for an original certificate of authority, what minimum capital stock or surplus must an insurer have
1.5 million
What would the insurance company do if an insured under a whole life policy with an accidental death rider intentionally kills himself a couple months after purchasing the policy?
deny the death benefit but pay the premium
how many hours of continuing education must licensees complete every renewal period on the subject of ethics
3 hours
when the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?
paid-up additions
14) Because of an injury, an insured has been unable to work for 7 months. He wasn't able to pay his life insurance policy premium, yet the policy remained in force. The policy includes
waiver of premium rider
when an insured terminates membership in the insured group, the insured can convert to
whole life without proof of insurability
what is a specific requirement regarding the number of employees in a simple plan?
no more than 100 employees.
which statement best describes agreement as it relates to insurance contracts?
one party accepts the exact terms of the other party's offer.
which of the following is not an indicator of a competent party?
business profession
If the policy summary for a life insurance policy is not given when the application is taken, when must the policy summary be given to the policyowner?
when the policy is delivered
To be valid, an insurance policy must have all of the following EXCEPT
consideration
which of the following is true of level term insurance?
it is temporary protection
which of the following is true regarding pure life annuity settlement option?
it provides the highest monthly benefit
which of the following types of insurance products would be appropriate for an individual with a low income and high insurance needs?
term insurance
which method of dealing with risk is applied when insurance is purchased
transfer
An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change of surrender a life insurance policy of annuity has committed an illegal practice known as:
twisting
Which of the following best describes life annuity with period certain option?
It guarantees benefit payments for life of the annuitant and for a specified period for the beneficiary. When an insured terminates membership in the insured group, the insured can convert to
the family term rider incorporates
Spouse term and children's term
which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity?
accumulation period
all of the following statements are true regarding an ordinary (straight) life policy except
it does not have a guaranteed death benefit
In contrasting stock insurers with mutual insurers, which statement is true?
stock insurers are owned by the shareholders and issue nonparticipating policies.
if an applicant submits the initial premium with an application, which action constitutes acceptance?
the underwriters approve the application.
when a hearing regarding an insurance matter is requested, all parties must receive
15 days notice
under what circumstances will the contingent beneficiary receive the death benefit
if the primary beneficiary dies before the insured.
when an insurer tries to discourage a policyholder from dropping his/her excising policy, this is called
conservation effort
which of the following elements of an insurance contract requires payment of premium?
consideration
if an individual willfully violates provisions of the fair credit reporting act, what is the maximum civil penalty?
$2500
In a noncontributory group health plan, what percentage of eligible employees must participate before the plan can be put in force?
100% of eligible employees must participate.
all of the following statements about mutual insurance companies are correct except
Policy dividends issued by mutual companies are guaranteed and not taxable
When an individual obtains an 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
controlled business
*Policy loan requests, except for loan requests for payment of due premiums, may be deferred for a period of up to
six months
The owner of a deferred annuity pays $100 in premium one month, and $130 the next month. Which of the following terms best describes this premium payment arrangement?
flexible premium
which of the following is not true regarding a deferred annuity
income payments begin within 1 year from the date of the purchase.
Guaranteeing future dividends is considered to be an unfair or deceptive act known as
misrepresentation
which of the following actions does not constitute false advertising?
requiring applications more quickly than what's reasonablee-state that dividends are not guaranteed
an insurance agent visits a potential client and explains various types of policies. the customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. which term describes what the agent has done?
misrepresentation
when is the company responsible for actions of its agents?
whenever the agent is acting within the conditions of the contract.
An insured decides to surrender his Whole Life insurance policy. the cash value at surrender is higher than the premiums paid into the policy due to interest. what part of surrender value would be income taxable?
The difference between the premiums paid and the cash value
An annuitant pays the annuity premium on the 14th of each month. Which of the following best describes this arrangement?
level
in which of the following cases the insured must consent in writing to the life insurance contract?
an employer is purchasing life insurance on the key employee.
considering the principles of liquidity, how would the policy owner use todays cash values in a life insurance policy?
use it for emergency expenses
Which of the following would be likely to establish a SEP
small employers
An individual has a $200,00 convertible term life insurance policy. If he chooses, he can:
Convert to a whole life policy for the same face amount without proof of insurability
the entire contract includes all of the following Except
a buyers guide
An insurer mails an insurance policy to a new policyowner. When the insurer relinquishes control of the policy, the policy is considered
delivered
what is the main purpose of requiring licenses for people who transact insurance?
protect the general public
According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?
the primary beneficiary died before the insured
at what point would an automatic premium loan be generated?
following the grace period
Which dividend option increases the death benefit?
Paid-up additions increase the death benefit of the original policy by whatever amount the dividend will buy.
38. The policy owner has an option pledge the life insurance policy as collateral for the blank. This is called:
a collateral assignment
In a life insurance application, all of the following signatures will be required EXCEPT
the home office underwriter
Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this Policyowner select?
joint and survivor
what is the most common name for a single policy that is designed to insure two or more lives with a standard premium and that pays the death benefit upon the first death
joint life
an insurace company that is owned by the policyholders is called a
mutual insurance company
dividends received on participating life insurance policies are
not taxable because they are a return of unused premiums
Among the applicants in the same class and life expectancy, which of the following factors can be used to influence premium rates?
occupation
which of the following would not trigger the payment of accelerated death benefits?
permanently disabled
which of the following will not be included in the buyers guide?
specific info about the policy.
Refusing to pay a claim without conducting a reasonable investigation of all available information where material facts are in dispute
cease
insurers cannot transact insurance in this state without a
certificate of authority
Two individuals of the same age, health status, and life expectancy apply for Individual insurance coverage. When policies are issued by the same insurer, the premium rates are different based on the insureds race. What practice does this describe?
unfair discrimination
With Adjustable Life, the owner can change all of the following EXCEPT:
the insured
how often will the commissioner examine domestic insurers?
at least once every 5 years.
an individual receives a lump-sum inheritance. he would like to use the money to create a lifetime income since he'll be retiring soon. he purchases an annuity and wishes to receive payments beginning in 2 months. what did he buy?
single premium immediate annuity
An individual purchases a life insurance policy and lists his parents as the beneficiaries. He is able to change beneficiaries at any time. What type of beneficiary designation does the policy have?
revocable
life insurance creates an immediate estate. which of the following best explains this statement?
the face value of the policy is payable to the beneficiary upon the death of the insured.
which of the following has the right to change the settlement option in a life insurance policy?
the policy owner at any time during the life of the insured.
A loss resulting from which of the following would qualify for the accidental death rider coverage?
an automobile accident
what is the difference between a straight life policy and a 20 pay whole life policy
premium payment period
what happens to the face amount of a whole life policy if the insured reaches the age of 100?
the face amount is paid to the insured.
During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of
defamation
according to the states rules regulating the advertisement of life insurance, advertisement does not include which of the following?
material prepared by the insurer for training new agents
an example of alien insurer doing business in this state is one of formed under the laws of
mexico
which of the following types of policies would not be subject to the life insurance solicitation regulation?
annuities
an insurer who transacts insurance in this state but whose articles of incorporation are registered in canada is considered what type of insurer?
alien
an applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer no to the question pertaining to heart problems on their application. their answer is considered to be
representation
the renewable provision allows the policyowner to renew the coverage at the expiration date
without evidence of insurability
prior to soliciting an insurance application the insurer must provide which of the following to all prospective purchasers
buyer's guide
which of the following are characteristics of term life insurance?
temporary protection, renewability, no cash value