WI Life Insurance Exam
According to the Fair Credit Reporting Act, consumer reports are prohibited from reporting negative information about a customer after how many years?
7 years
The maximum number of employees allowed for a SIMPLE plan is
100
an agent who offers a cash reward to prospect for buying a policy is guilty of
rebating
The point at which an insurer issues a policy is known as
Acceptance
What is the main purpose of the Gramm-Leach-Bliley Act?
Consumer privacy protection
Which of the following losses would likely be covered under the Accidental Death rider?
Death caused by a head-on collision
Avoiding tax consequences when transferring assets from one IRA to another can be accomplished by which of the following?
a direct rollover from one plan to the other
The chance of loss without any possibility for gain is known as a/an
pure risk
Term life insurance provides
temporary coverage
Which of the following is NOT an IRS requirement for a qualified retirement plan?
the plan must favor shareholders
A person who knowingly obtains information on a consumer from a consumer reporting agency under false pretenses may be imprisoned for up to how many years?
2 years
To comply with the timely payment of claims provision, insurers must pay a claim within how many days of receiving proof of loss?
30 days
An insured has policy in which the death benefit remains level while the premium increases, and is renewable without proof of insurability. What kind of policy is this?
annually renewable term
Which of the following actions would be considered an offer?
an applicant submitting the application
Which of the following is a characteristic of a revocable beneficiary designation?
policy owner can change beneficiary designation anytime without the beneficiary's consent
Which of the following describes twisting?
policy replacement that is to the detriment of the policy owner
Of $10,000 in premiums a producer wrote over the past year, $3,000 came from sales to a business which employs the producer's spouse. This is considered
a legal practice
Unused premiums are returned to policy owners tax free in the form of
dividends
Which of the following is an intermediary who acts on behalf of the insured in insurance transactions?
insurance agent
how often must individual agents pay their licensing fees?
every 2 years
An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority?
apparent
unlike the dividend itself, the interest earned on dividends is
taxable
Which of the following statements is TRUE regarding an annuitant?
the annuitant must be a natural person
term insurance provides coverage for
a specified period of time
which of the following is NOT considered a rebate?
offering a prospective insured a multi-policy discount
Which of the following entities is responsible for paying the producer's appointment renewal fee?
the appointing insurer
All of the following are requirements for an intermediary's place of business EXCEPT
it may be located in another state
Which of the following terms means the frequency of premium payment?
mode
Term insurance pays the death benefit to the beneficiary if the insured dies while the policy is in effect, but pays nothing if the insured dies after the policy's cancellation or expiration. This is known as
pure death protection
An agent who offers a cash reward to a prospect for buying a policy is guilty of
rebating
An annuity pays a monthly amount for the remainder of the annuitant's life. If death occurs before the principal is exhausted, the remaining amount will be paid to a designated beneficiary. Which payment option ha the annuitant selected?
refund life
Which of the following individuals must have insurable interest in the insured?
policy owner
Which of the following is a characteristic of an equity indexed annuity?
intrest rates are often associated with a stock index
If a life insurance policy is not solicited through an intermediary, and if the policy offers a 30-day free-look period, which of the following is true regarding the buyer's guide delivery to the policy owner?
it must be provided at the time of application
A married couple near retirement want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose?
joint and survivor
In which of the following types of temporary insurance protection does the death benefit NOT change throughout the life of the policy?
level term
Which of the following settlement options does NOT guarantee that the entire principal will be paid out to the beneficiary?
life income
Life insurance intermediaries must hold a securities license if they want to transact what type of insurance products?
variable policies
Which of the following types of insurance companies issue participating policies?
mutual
A fixed annuity has a guaranteed interest rate of 4%. The means that the annuitant will
never receive less than 4% interest
regular premium payments made to purchase an individual non qualified annuity are
nondeductible
The Spendthrift Clause of a life insurance policy is designed to do all of the following EXCEPT
prevent the beneficiary's reckless spending of the death benefit
According to the general statutes and rules for insurance contracts issued in this state, who should receive notice of right to file a complaint?
all policy owners when a policy is issued
A producer CANNOT act as an agent of an insurer without which of the following?
an appointment by the insurer
An insured cashes in a life insurance policy and purchases a Single Premium Immediate Annuity. The monthly income amount will be impacted all of the following EXCEPT
lifestyle
Under which of the following risers will the insurer both waive policy premiums and pay monthly income to the insured if the insured is disabled?
disability income benefit rider
Which of the following riders usually expires when the covered insured reaches a specific age?
children's term
A warranty under which certain things will be done or not be done after the policy takes effect is a(n)
conditional warranty
Which of the following nonforfeiture options of a life insurance policy allows a policy owner to use the cash value to purchase additional insurance of the same type?
extended term
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
incontestability clause
If an insurer requires that an applicant or insure undergo a physical examination in order to obtain or continue coverage, who must pay the cost of such examination?
insurer
Which of the following is true regarding the annuity period?
it may last for the lifetime of the annuitant
An insured would like to reactivate a life insurance policy that lapsed 2 years ago by paying all missed premiums and providing evidence of insurability. Which provision allows the insured to do this?
reinstatement
which of the following falls under an agent's fiduciary responsibilities?
submitting premiums to the insurer
The Commissioner obtains a restraining order against a person who has violated an insurance law. The person continues the violation for 15 days. The person will have to pay a fine of
$5,000
All of the following transactions would be allowed EXCEPT
a friend buying life insurance on a friend
A whole life policy's cash value will equal the face account when the insured reaches what age?
100
Another name for a Keogh Plan is
HR-10
A life insurance producer may share commissions with
Another life producer
which of the following would be considered a senior consumer in this state?
Any person age 65 or older
Which of the following is responsible for paying premiums on an insurance policy?
policy owner
Which of the following acts protects consumers against the distribution of incorrect and obsolete personal or financial information?
the fair credit reporting act
If the insurer failed to pay a claim within the required period of time, all overdue payments will be charged an annual interest of
7.5%
In insurance, the uncertainty of an individual sustaining a loss in the future is classified as a/an
risk
to secure a lower premium, an applicant for insurance may choose to backdate the application up to
6 months
when replacing a life insurance policy, a producer has all of the following EXCEPT
send a written communication to existing insurers advising them of the proposed replacement
Which of the following is INCORRECT regarding whole life insurance?
policy loans are tax deductible
In a decreasing term policy, the term "decreasing" refers to
the premium
Which of the following would be considered a peril?
Fire
What type of life insurance policy is used by insurance companies to fund certain riders?
annually renewable term
Which of the following means "liquidity" in a life insurance contract?
the cash value available to the policy owner
Which of the following methods of calculating the amount of life insurance needed takes into account the insured's salary and years until retirement?
the human life value approach
Who maintains the rights in an annuity?
the owner
In life insurance, an insurable interest between the policy owner and the insured must exist
at the time of application
Which of the following nonforfeiture options would be automatically implemented by the insurer if none of the other options has been selected but the policyowner?
extended term
which of the following are the features of a variable life insurance policy?
fixed premium, guaranteed minimum death benefit, separate accounts
Which of the following is a person who has authority to bind, or manages all or part of the assumed reinsurance business of a reinsurer and acts as an agent for th reinsurer?
reinsurance manager
Which of the following is not true regarding the policy summary?
the policy summary may be part of the policy
The agent's personal observations regarding the applicant are included in
the producer's report
Which of the following terms will be permissible in describing a life insurance policy in company advertisements?
variable plan
During which of the following annuity periods does an insured make monthly contributions to the annuity for retirement purpose?
accumulation
If the Department issues a cease and desist order, that means the insurer must do which of the following?
stop committing a particular violation
A life insurance policy was classified as a Modified Endowment Contract(MEC) in its third year. Wen will it lose this classification?
when the beneficiary changes
All of the following affect a policy's loan value EXCEPT
number of beneficiaries
Which of the following riders provides for a waiver of premium when the policy owner and the insured are NOT the same person?
payor benefit
If an insurer makes a statement misrepresenting or incompletely comparing the terms of any insurance policy to induce a policyholder to drop an existing policy, what unfair practice has occurred?
twisting
In Wisconsin, the required grace period in group life insurance policies is
31 days
The General Information section of the life insurance application includes all of the following information about the applicant EXCEPT
income
How long is the grace period for an individual life insurance policy?
1 month
Over several years, a policy owner paid $10,000 in premiums for his insurance policy. When he suffered a loss, the insurance company paid out $50,000 in benefits. What characteristics of an insurance contract does this describe?
Aleatory
An individual purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?
immediate
The face amount of a life insurance policy will be included in the insured's taxable estate if the insured transfers ownership of the policy
in the 3 years before his or her death
In whole life insurance, which of the following terms describes features such as cash values and loan provisions?
living benefits
the insurance component of a universal life policy is what type of insurance?
flexible premium adjustable life
which rule would apply if an insured wants to cash in an old policy and use the funds to purchase a new policy?
replacement rule
Who bears the investment risk in variable life insurance products?
the policy owner
The practice of making sure that the purchase of an annuity product is correct for the purchaser's investment objectives, financial status, tax status, and needs is called
suitability
Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
universal life