Virginia life insurance exam 0000
The automatic premium loan provision is activated at the end of the a)Elimination period. b)Policy period. c)Grace period. d)Free-look period
c)Grace period.
In Virginia, after 3 years of ownership, policyholders of whole life insurance policies are able to borrow cash values in excess of the mandated reserves at an interest rate that is a)Fixed or Variable. b)Prime plus 3%. c)Fixed. d)Variable.
a)Fixed or Variable.
Insurance is the transfer of a)Loss. b)Hazard. c)Peril. d)Risk.
d)Risk.
Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT? a)100% participation of members is required in noncontributory plans. b)Each member covered receives a policy. c)Coverage cannot be converted when an individual leaves the group. d)Premiums are determined by age, occupation, and individual underwriting.
a)100% participation of members is required in noncontributory plans.
Once the agent's appointment with the insurer has been terminated, how soon must the insurer mail a notice of termination to the agent?a)15 calendar days b)30 days c)5 business days d)10 days
a)15 calendar days
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a)5 days b)7 days c)10 days d)3 days
a)5 days
When an insurance producer is to charge an administrative fee to an insured, all of the following must be done EXCEPT a)A copy of any fee disclosure must be provided to the insured. b)The agent must disclose the fees in writing. c)The insured must provide a signature on any fee disclosure. d)A schedule of fees must be posted in the office.
a)A copy of any fee disclosure must be provided to the insured.
The term "illustration" in a life insurance policy refers to a)A presentation of nonguaranteed elements of a policy. b)A depiction of policy benefits and guarantees. c)Pictures accompanying a policy. d)Charts and graphs.
a)A presentation of nonguaranteed elements of a policy.
Employer contributions made to a qualified plan a)Are subject to vesting requirements. b)May discriminate in favor of highly paid employees. c)Are after-tax contributions. d)Are taxed annually as salary
a)Are subject to vesting requirements.
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner? a)Cash surrender b)Reduced paid-up c)Paid-up options d)Extended term
a)Cash surrender
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?a)Conditional b)Adhesion c)Personal d)Unilateral
a)Conditional
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT a)Conditions. b)Consideration. c)Legal purpose. d)Offer and acceptance.
a)Conditions.
According to the entire contract provision, what document must be made part of the insurance policy? a)Copy of the original application b)Buyer's Guide c)Agent's report d)Outline of coverage
a)Copy of the original application
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid a)For 20 years or until death, whichever occurs first. b)Until the policyowner reaches age 65. c)For 20 years. d)Until the policyowner's age 100, when the policy matures.
a)For 20 years or until death, whichever occurs first.
If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is a)Fully insured. b)Partially insured. c)Correctly insured. d)Permanently insured.
a)Fully insured.
Which of the following best describes annually renewable term insurance? a)It is level term insurance. b)It requires proof of insurability at each renewal. c)Neither the premium nor the death benefit is affected by the insured's age. d)It provides an annually increasing death benefit.
a)It is level term insurance.
All of the following are required of an association in order to qualify as a group life insurance coverage EXCEPT a)Longevity of at least 10 years .b)A constitution and by-laws. c)A good faith purpose. d)Membership of 100 or more.
a)Longevity of at least 10 years.
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the a)Other-insured rider. b)Change of insured rider. c)Juvenile rider. d)Payor rider.
a)Other-insured rider.
Which of the following is another term for the accumulation period of an annuity? a)Pay-in period b)Premium period c)Liquidation period d)Annuity period
a)Pay-in period
All of the following are true regarding rebates EXCEPT a)Rebates are allowed if it's in the best interest of the client. b)Rebates are only allowed if specifically stated in the policy. c)Rebating can be anything of economic value, given as an inducement to buy .d)Dividends are not considered to be rebates.
a)Rebates are allowed if it's in the best interest of the client.
The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this? a)Reduction of premium b)Paid-up addition c)Accumulation at interest d)Cash option
a)Reduction of premium
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?a)Replacement rule b)Reinstatement rule c)Conversion rule d)Disclosure rule
a)Replacement rule
Who may contribute to an HR-10 plan? a)Self-employed plumber b)Manager of a store c)Corporate executive d)Partner with at least 5% ownership
a)Self-employed plumber
Your client was insured under her employer's group life insurance plan at her place of employment. She contacted you as she was terminated from her job. She wants to convert her group policy to an individual policy. All of the following statements about her situation are correct EXCEPT a)She will be able to convert to term insurance. b)She would not need to prove insurability for a conversion policy. c)Application for an individual policy and the first premium payment must be made within 31 days of termination of employment. d)Should she convert to individual coverage, the premium will be based upon her current age and risk class.
a)She will be able to convert to term insurance.
Which of the following would provide an underwriter with information concerning an applicant's health history? a)The Medical Information Bureau b)A medical examination c)The agent's report d)The inspection report
a)The Medical Information Bureau
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then a)The benefit is received tax free. b)The benefit is subject to the exclusionary rule. c)IRS has no jurisdiction. d)The benefit is received as taxable income.
a)The benefit is received tax free.
Most methods used to determine the suitability of a particular annuity recommendation to a client are based on information regarding all of the following EXCEPT a)The client's insurability. b)The client's tax status. c)The client's investment objectives. d)The client's financial status.
a)The client's insurability.
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date? a)The date of medical exam b)The date of policy delivery c)The date of issue d)The date of application
a)The date of medical exam
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a)Nonforfeiture option. b)Guaranteed insurability rider. c)Paid-up additions option. d)Cost of living provision.
b)Guaranteed insurability rider.
Which is true about a spouse term rider? a)The rider is usually level term insurance. b)Coverage is allowed for an unlimited time. c)The rider is decreasing term insurance. d)Coverage is allowed up to age 75.
a)The rider is usually level term insurance.
Which of the following is TRUE for both equity indexed annuities and fixed annuities? a)They have a guaranteed minimum interest rate .b)They are both tied to an equity index. c)Both are considered to be more risky than variable annuities. d)They invest on a conservative basis. While equity indexed annuities earn higher interest rates than fixed annuities, both types of annuities guarantee a specific minimum interest rate.
a)They have a guaranteed minimum interest rate.
All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT a)Upon conversion, the death benefit of the permanent policy will be reduced by 50%. b)Evidence of insurability is not required. c)Most term policies contain a convertibility option. d)Upon conversion, the premium for the permanent policy will be based upon attained age.
a)Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with the upcoming medical expenses. What option could the insured utilize? a)Viatical settlement b)Estate liquidation c)Nonpayment of premium d)Change of beneficiary
a)Viatical settlement
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years? a)1 year b)2 years c)5 years d)7 years
b)2 years
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe? a)Personal b)Adhesion c)Unilateral d)Conditional
b)Adhesion
Who can make a fully deductible contribution to a traditional IRA? a)A person whose contributions are funded by a return on investment b)An individual not covered by an employer-sponsored plan who has earned income c)Anybody: all IRA contributions are fully deductible regardless of income level d)Someone making contributions to an educational IRA
b)An individual not covered by an employer-sponsored plan who has earned income
When must insurable interest exist in a life insurance policy? a)At the time of loss b)At the time of application c)At the time of policy delivery d)When there is a change of the beneficiary
b)At the time of application
What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident? a)Nonforfeiture Clause b)Common Disaster Clause c)Spendthrift Clause d)Settlement Clause
b)Common Disaster Clause
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? a)The same as the original policy minus the cash value b)Equal to the original policy for as long as the cash values will purchase. c)In lesser amounts for the remaining policy term of age 100. d)Equal to the cash value surrendered from the policy
b)Equal to the original policy for as long as the cash values will purchase.
Which of the following is NOT a duty of the Commission of Insurance? a)Suspending or revoking licenses of Insurance Code violators b)Examining each domestic insurer at least once a year c)Appointing the Commissioner of Insurance d)Enforcing the Insurance Code
b)Examining each domestic insurer at least once a year
Both Universal Life and Variable Universal Life have a a)Increasing premium. b)Flexible premium. c)Level fixed premium. d)Decreasing premium.
b)Flexible premium.
What type of insurance would be used for a Return of Premium rider? a)Annually Renewable Term b)Increasing Term c)Level Term d)Decreasing Term
b)Increasing Term
What is the purpose of a conditional receipt? a)It is given only to applicants who fully prepay the premium b)It is intended to provide coverage on a date prior to the policy issue. c)It guarantees that a policy will be issued in the amount applied for. d)It serves as proof that the applicant has been determined insurable.
b)It is intended to provide coverage on a date prior to the policy issue.
Which of the following is true about the premium on the children's rider in a life insurance policy? a)It decreases when an adopted child is added to the policy. b)It remains the same no matter how many children are added to the policy. c)It decreases when the oldest child reaches the age of 21. d)It increases when a newborn baby is added to the policy.
b)It remains the same no matter how many children are added to the policy.
Which of the following is NOT true regarding the accumulation period of an annuity? a)It is also known as the pay-in period. b)It would not occur in a deferred annuity. c)It is the period during which the annuity payments earn interest. d)It is the period over which the owner makes payments into an annuity.
b)It would not occur in a deferred annuity.
Which of the following settlement options in life insurance is known as straight life? a)Fixed amount b)Life income c)Single life d)Life with period certain
b)Life income
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it? a)Graded Premium Life b)Limited-pay Life c)Variable Life d)Adjustable Life
b)Limited-pay Life
According to the Virginia rules regulating the advertisement of life insurance, advertisement does NOT include which of the following?a)Published advertisement in a local newspaper b)Material prepared by the insurer for training new agents c)Descriptive literature utilized by an agent in the sales process d)Prepared leaflet given to a prospective client
b)Material prepared by the insurer for training new agents
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the a)Payor rider. b)Other-insured rider. c)Change of insured rider. d)Juvenile rider.
b)Other-insured rider.
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called a)Reduction of premiums. b)Paid-up additions. c)One-year term purchase. d)Accumulation at interest.
b)Paid-up additions.
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? a)Waiver of Premium b)Payor Benefit c)Jumping Juvenile d)Juvenile Premium Provision
b)Payor Benefit
What are the disclosure requirements if an insurance producer wishes to charge a fee? a)Obtaining a signature on a schedule of fees, issuing premium fee receipts to the client, providing copies of deposit statements to client. b)Posting a schedule of fees in the producer's office, disclosing the fees to the client in writing, and obtaining a signature on the disclosure from the client c)At least verbally disclosing the fees to the client, issuing a fee receipt to the client d)Issuing a conditional premium fee receipt, giving written notice of the premium, obtaining a signature of the insurer
b)Posting a schedule of fees in the producer's office, disclosing the fees to the client in writing, and obtaining a signature on the disclosure from the client
All of the following are characteristics of group life insurance EXCEPT a)Certificate holders may convert coverage to an individual policy without evidence of insurability. b)Premiums are determined by the age, sex and occupation of each individual certificate holder. c)Amount of coverage is determined according to nondiscriminatory rules. d)Individuals covered under the policy receive a certificate of insurance.
b)Premiums are determined by the age, sex and occupation of each individual certificate holder.
Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? a)Premiums are taxable to the employee. b)Premiums are not tax deductible as a business expense. c)Premiums are tax deductible by the key employee. d)Premiums are tax deductible as a business expense.
b)Premiums are not tax deductible as a business expense.
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability? a)Medical exam and parents' medical history b)Proof of insurability is not required. c)Medical exam d)Her parents' federal income tax receipts
b)Proof of insurability is not required.
Which nonforfeiture option provides coverage for the longest period of time? a)Accumulated at interest b)Reduced paid-up c)Extended term d)Paid-up option
b)Reduced paid-up
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy a)Decreased death benefit at each renewal. b)Required a premium increase each renewal. c)Built cash values. d)Required proof of insurability every year.
b)Required a premium increase each renewal.
An IRA purchased by a small employer to cover employees is known as a a)403(b) plan. b)Simplified Employee Pension plan. c)401(k) plan. d)Defined contribution plan.
b)Simplified Employee Pension plan.
Which two terms are associated directly with the way an annuity is funded? a)Renewable or convertible b)Single payment or periodic payments c)Increasing or decreasing d)Immediate or deferred
b)Single payment or periodic payment
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as a)Juvenile protection provision b)Survivor protection c)Life planning d)Survivorship insurance
b)Survivor protection
All of the following entities regulate variable life policies EXCEPT a)The Insurance Department. b)The Guaranty Association. c)Federal government. d)The SEC.
b)The Guaranty Association.
All of the following entities regulate variable life policies EXCEPT a)The Insurance Department. b)The Guaranty Association. c)Federal government. d)The SEC.
b)The Guaranty Association.
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true? a)The contract can be issued without an annuitant. b)The annuitant must be a natural person. c)A corporation can be an annuitant as long as it is also the owner. d)A corporation can be an annuitant as long as the beneficiary is a natural person.
b)The annuitant must be a natural person.
A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy? a)Nothing, since the insured was killed as a result of a war b)The full death benefit c)The policy's cash value d)A refund of premiums
b)The full death benefit
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? a)Those who have no history of claims b)Those who have been insured under the plan for at least 5 years c)Those who have worked in the company for at least 3 years d)Those who have dependents
b)Those who have been insured under the plan for at least 5 years
Which of the following is the best reason to purchase life insurance rather than annuities? a)To liquidate a sum of money over a lifetime b)To create an estate c)To liquidate a sum of money over a period of years d)To create regular income payments
b)To create an estate
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive? a)$0 b)$50,000 (50% of the policy value) c)$100,000 d)$300,000 (triple the amount of policy value)
c)$100,000
An agent is licensed for life and property insurance. How many hours of CE is the agent required to earn every 2 years? a)10 b)16 c)24 d)40
c)24
Under which of the following circumstances would an insurer pay accelerated benefits? a)An insured is looking for a way to put her daughter through college. b)A couple wants to build a house and would like to make a larger down payment. c)An insured is diagnosed with cancer and needs help paying for her medical treatment. d)A couple is nearing retirement and needs a steady stream of income.
c)An insured is diagnosed with cancer and needs help paying for her medical treatment.
If a policyholder takes a policy loan after the 4th year of the policy, and dies before the loan is repaid, what portion of the death benefit will be paid? a)Any outstanding policy loan balance plus interest, plus 7.5% of the total loan, will be deducted from the policy death benefit. b)If a policy loan is outstanding at the time of death, no death benefit will be paid until the loan is repaid from the estate of the insured. c)Any outstanding policy loan balance plus interest will be deducted from the policy death benefit. d)The full death benefit will be paid.
c)Any outstanding policy loan balance plus interest will be deducted from the policy death benefit.
At what time may the Insurance Commissioner inspect records pertaining to insurance transactions? a)At any business time in the 5 years immediately following the relevant transaction b)At least 5 years after the transaction c)At any business time in the 3 years immediately following the relevant transaction d)At least 3 years after the transaction
c)At any business time in the 3 years immediately following the relevant transaction
An insurance contract must contain all of the following to be considered legally binding EXCEPT a)Consideration. b)Competent parties. c)Beneficiary's consent. d)Offer and acceptance.
c)Beneficiary's consent.
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? a)Representation b)Adhesion c)Consideration d)Good faith
c)Consideration
Which of the following terms is used to name the nontaxed return of unused premiums? a)Interest b)Surrender c)Dividend d)Premium return
c)Dividend
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a)Stocks, securities, or bonds. b)An offer to share in commissions generated by the sale .c)Dividends from a mutual insurer. d)An offer of employment.
c)Dividends from a mutual insurer.
All companies authorized and licensed to transact the business of insurance in this state are subject to inspection, supervision and regulation by a)The NAIC. b)The State Bureau of Insurance Regulation. c)The Commission. d)The Federal Insurance Regulation Board.
c)The Commission.
Which is TRUE about the cash surrender nonforfeiture option? a)The policy remains active for some time after the policyholder opts for cash surrender. b)The policyholder receives the original cash value of the policy. c)Funds exceeding the premium paid are taxable as ordinary income. d)After the cash surrender, the insured is covered for a grace period of 1 month.
c)Funds exceeding the premium paid are taxable as ordinary income.
Which of the following is an eligibility requirement for all Social Security Disability Income benefits? a)Have permanent kidney failure b)Be at least age 50 c)Have attained fully insured status d)Be disabled for at least 1 year
c)Have attained fully insured status
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act? a)Illegal until endorsed by the Guaranty Association b)Legal, provided that the other insurers are paid royalties for the usage of their names c)Illegal under any circumstances d)Legal, provided that the information can be verified
c)Illegal under any circumstances
Which of the following best describes annually renewable term insurance? a)Neither the premium nor the death benefit is affected by the insured's age. b)It provides an annually increasing death benefit. c)It is level term insurance. d)It requires proof of insurability at each renewal.
c)It is level term insurance.
Which of the following is an example of a limited-pay life policy?a)Level Term Life b)Straight Life c)Life Paid-up at Age 65 d)Renewable Term to Age 70
c)Life Paid-up at Age 65
To what organization must all admitted insurers belong? a)The Commissioner's Association b)The Virginia Insurance Department Association c)Life, Accident and Sickness Insurance Guaranty Association d)The Virginia Insurers Association
c)Life, Accident and Sickness Insurance Guaranty Association
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy? a)As high b)Half the amount c)Lower d)Higher
c)Lower
Which of the following is NOT true regarding Equity Indexed Annuities? a)They have guaranteed minimum interest rates. b)They are less risky than variable annuities. c)They earn lower interest rates than fixed annuities. d)The insurance company keeps a percentage of the returns.
c)They earn lower interest rates than fixed annuities.
Which of the following riders would NOT cause the Death Benefit to increase? a)Cost of Living Rider b)Accidental Death Rider c)Payor Benefit Rider d)Guaranteed Insurability Rider
c)Payor Benefit Rider
Another name for a substandard risk classification is a)Declined. b)Elevated. c)Rated. d)Controlled.
c)Rated.
Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as a)Unlawful distribution of dividends. b)Coercion. c)Rebating. d)Twisting.
c)Rebating.
Which of the following would be considered a nonqualified retirement plan? a)Keogh plan b)Roth IRA c)Split-dollar plan d)401(k)
c)Split-dollar plan
Which of the following is called a "second-to-die" policy? a)Juvenile life b)Joint life c)Survivorship life d)Family income
c)Survivorship life
Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?a)Guaranteed insurability rider b)Change of insured rider c)Term rider d)Accidental death and dismemberment rider
c)Term rider
Which of the following is TRUE regarding variable annuities? a)The company guarantees a minimum interest rate. b)A person selling variable annuities is required to have only a life agent's license. c)The annuitant assumes the risks on investment. d)The funds are invested in the company's general account.
c)The annuitant assumes the risks on investment.
In a life settlement contract, whom does the life settlement broker represent? a)The beneficiary b)The life settlement intermediary c)The owner d)The insurer
c)The owner
All of the following are true regarding a decreasing term policy EXCEPT a)The contract pays only in the event of death during the term and there is no cash value. b)The face amount steadily declines throughout the duration of the contract. c)The payable premium amount steadily declines throughout the duration of the contract. d)The death benefit is $0 at the end of the policy term.
c)The payable premium amount steadily declines throughout the duration of the contract.
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE? a)The policy will be void. b)The insurer may deny coverage later, because of the information missing on the application. c)The policy will be interpreted as if the insurer waived its right to have an answer on the application. d)The policy will be interpreted as if the insured did not have an answer to the question.
c)The policy will be interpreted as if the insurer waived its right to have an answer on the application.
Which is generally true regarding insureds who have been classified as preferred risks? a)They can decide when to pay their monthly premiums. b)They keep a higher percentage of any interest earned on their policies. c)Their premiums are lower. d)They can borrow higher amounts off of their policies.
c)Their premiums are lower.
The paid-up addition option uses the dividend a)To reduce the next year's premium. b)To accumulate additional savings for retirement. c)To purchase a smaller amount of the same type of insurance as the original policy. d)To purchase a one-year term insurance in the amount of the cash value.
c)To purchase a smaller amount of the same type of insurance as the original policy.
Which of the following terms is used to describe a person, other than a viator, that enters into or effectuates a viatical settlement contract?a)Viatical settlement broker b)Viatical settlement effectuator c)Viatical settlement provider d)Viatical settlement purchaser
c)Viatical settlement provider
In which instance may 3 licensees share commissions? a)Three licensees may never share a commission. b)Sharing of commissions is at the discretion of the insurer. c)When all 3 are licensed for the same line of insurance from which the commission comes d)When at least 2 are licensed for the appropriate line of insurance from which the commission comes
c)When all 3 are licensed for the same line of insurance from which the commission comes
When would a 20-pay whole life policy endow? a)After 20 payments b)In 20 years c)When the insured reaches age 100 d)At the insured's age 65
c)When the insured reaches age 100
If an agent's appointment is terminated, suspended or revoked, the agent must cease selling or soliciting on behalf of the insurer within a)15 calendar days. b)30 calendar days. c)5 calendar days. d)10 calendar days.
d)10 calendar days.
An agent is convicted of a felony in another jurisdiction. Within what period of time must the agent report the felony charge to the Commission? a)Immediately b)5 days c)10 days d)30 days
d)30 days
All of the following must be included in the report to the Commissioner after any felony conviction or administrative action is taken against a licensed insurance agent EXCEPT a)Consent to the order. b)General facts and circumstances surrounding the conviction/action. c)Specific facts and circumstance surrounding the conviction/action. d)A copy of the agent's license.
d)A copy of the agent's license.
An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information? a)Interviews b)State records c)Medical records d)Application
d)Application
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is a)Aleatory. b)Personal. c)Unilateral. d)Conditional.
d)Conditional.
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n) a)Key person policy. b)Fraternal association. c)Aleatory contract. d)Executive bonus.
d)Executive bonus.
Which nonforfeiture option has the highest amount of insurance protection? a)Conversion b)Decreasing Term c)Reduced Paid-up d)Extended Term
d)Extended Term
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?a)Life with period certain b)Fixed amount c)Interest only d)Fixed period
d)Fixed period
When an employee terminates coverage under a group insurance policy, coverage continues in force a)For 60 days. b)Until the employee can obtain coverage under a new group plan. c)Until the employee notifies the group insurance provider that coverage conversion policy is issued. d)For 31 days.
d)For 31 days.
Which of the following riders would NOT cause the Death Benefit to increase? a)Guaranteed Insurability Rider b)Cost of Living Rider c)Accidental Death Rider d)Payor Benefit Rider
d)Payor Benefit Rider
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice? a)A legal advertising strategy b)Unfair Discrimination c)Defamation d)Illegal
d)Illegal
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an a)Credit Life b)Annual Renewable Term. c)Adjustable Life. d)Interest-sensitive Whole Life.
d)Interest-sensitive Whole Life.
Which of the following statements about the reinstatement provision is true? a)It permits reinstatement within 10 years after a policy has lapsed. b)It provides for reinstatement of a policy regardless of the insured's health. c)It guarantees the reinstatement of a policy that has been surrendered for cash. d)It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
d)It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
Which of the following statements is TRUE concerning whole life insurance? a)Dividend interest is not taxable. b)Premiums are tax deductible. c)Policy loans are tax deductible. d)Lump-sum death benefits are not taxable.
d)Lump-sum death benefits are not taxable.
Which of the following will be included in a policy summary?a)Copies of illustrations and application b)Comparisons with similar policies c)Primary and secondary beneficiary designations d)Premium amounts and surrender values
d)Premium amounts and surrender values
An insured committed suicide one year after his life insurance policy was issued. The insurer will a)Pay the policy's cash value. b)Pay the full death benefit to the beneficiary. c)Pay nothing. d)Refund the premiums paid.
d)Refund the premiums paid.
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called a)Modified Endowment Contract (MEC). b)Level term life. c)Graded premium whole life. d)Single premium whole life.
d)Single premium whole life.
Which of the following is a risk classification used by underwriters for life insurance? a)Poor b)Normal c)Excellent d)Standard
d)Standard
The premiums paid by the employer in a business life insurance policy are a)Tax deductible by the employee. b)Always taxable to the employee. c)Never taxable to the employee. d)Tax deductible by the employer.
d)Tax deductible by the employer.
Which of the following information will be stated in the consideration clause of a life insurance policy? a)The parties to the contract b)The time period allowed for the payment of premium c)The conditions for insurability d)The amount of premium payment
d)The amount of premium payment
If a life insurance policy has an irrevocable beneficiary designation, a)The beneficiary cannot be changed for at least 2 years. b)The owner can always change the beneficiary at will. c)The beneficiary cannot be changed. d)The beneficiary can only be changed with written permission of the beneficiary.
d)The beneficiary can only be changed with written permission of the beneficiary.
Which of the following determines the cash value of a variable life policy? a)The company's general account b)The policy's guarantees. c)The premium mode d)The performance of the policy portfolio
d)The performance of the policy portfolio
What is the purpose of a fixed-period settlement option? a)To settle the insurance company's liability b)To provide a guaranteed income for life c)To provide a guaranteed amount of money each month d)To provide a guaranteed income for a certain amount of time
d)To provide a guaranteed income for a certain amount of time
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?a)Switching b)False advertising c)Rebating d)Twisting
d)Twisting
When is the earliest a policy may go into effect? a)When the first premium is paid and the policy has been delivered b)When the insurer approves the application c)After the underwriter reviews the policy d)When the application is signed and a check is given to the agent
d)When the application is signed and a check is given to the agent
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant a)Upon issuance of the policy. b)Within 30 days after the first premium payment was collected. c)Prior to filling out an application for insurance. d)With the policy.
d)With the policy.
