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An IRA purchased by a small employer to cover employees is known as a

sep simplified employee pension plan

Which of the following is a risk classification used by underwriters for life insurance?

standard

Which of the following documents must be provided to the policyowner or applicant during policy replacement

Notice Regarding Replacement

Which of the following is a producer's fiduciary duty

Handling premiums

The LEAST expensive first-year premium is found in which of the following policies?

Annually renewable term

all insurance companies doing business in the state of Colorado must file a financial statement with the Commissioner

Annually, on or before March 1

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance available

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?

The death benefit will be smaller

If a governmental agency in this state files an administrative action against an insurance licensee, the report of the action to the Commissioner must include all of the following EXCEPT

The producers production records for the prior year

an applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day, which of the following is TRUE?

beneficiary gets full death benefit

Whenever the Commissioner issues a cease and desist order, how will that order be delivered to the person in violation?

by certified mail

which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

family term rider

Which is TRUE about the cash surrender nonforfeiture option?

funds which exceed premium paid are taxed as ordinary income

The minimum number of credits required for partially insured status for Social Security disability benefits is

6

What provision in an insurance policy extends coverage beyond the premium due date?

Grace period

All of the following are unfair claims settlement practices EXCEPT

Suggesting negotiations in settling the claim.

If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?

The balance of the loan will be taken out of the death benefit

Which of the following is true regarding policy loans?

money borrowed from the cash value is NOT taxable

In insurance, an offer is usually made when

the application is submitted

what is the advantage of reinstating a policy instead of applying for a new one?

the original age is used to determine premium

Acting in a fiduciary capacity.

Acting in a fiduciary capacity is a producer's responsibility. All of the other answers are examples of violations that may result in license suspension, revocation, or refusal.

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation

Decreasing Term

Which of the following terms is used to name the nontaxed return of unused premiums?

Dividend

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While 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

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?

Proof of insurability is not needed

which of the following applicants would NOT qualify for a Keogh Plan?

Someone who works 400 hours per year

The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the

The entire contract

What is the purpose of a fixed-period settlement option?

to provide fixed periods of income for a fixed period of time

Which of the following is TRUE regarding the premium in term policies?

the premium is level

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

third owner partnership

What is the purpose of the buyer's guide?

to allow the consumer to compare the costs of different policies

What are the two components of a universal policy?

Insurance and cash account

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?

inspection report

Variable Whole Life insurance is based on what type of premium?

level fixed

All of the following provisions must be included in an insurer's anti-fraud plan EXCEPT

suspension of licesons

What does "level" refer to in level term insurance?

Face Amount

To obtain a nonresident producer's license in this state, a prospective licensee must

Have a similar license in his or her home state

Fixed annuities provide all of the following EXCEPT

hedge against inflation

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

Interest only option

Which of the following riders would NOT cause the Death Benefit to increase?

the payor

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract.

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

making comparisons between different policies

A purchaser of life insurance policy has the right to return the policy for a full refund of the premium if done within

15 days of policy being delivered

death benefits payable to a beneficiary under a life insurance policy are generally

not subject to tax by the federal government

Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

universal life

How many days do producers have to report administrative actions taken against them in another jurisdiction?

30 days

An insurer who willfully violates a single provision of an unfair trade practice regulation may be fined

30,000

When an insurance producer receives an application for an annuity contract, the producer must give the applicant a copy of which of the following documents?

All disclosure documents and the Buyer's Guide

When group life insurance policies are issued in this state by a company not organized under the laws of Colorado, they may contain which of the following provisions

Any provision required by the law of the state under which the company is organized

Which of the following explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy?

Owner's Rights

All of the following are the duties of the replacing producer where replacement is involved EXCEPT

Send a letter to the policyowner of the right to receive information regarding the existing policy

the act of trying to discourage a policyholder from dropping his/her existing policy is called

Conversation effort

When the Commissioner believes that a person has engaged in an unfair method of competition or an unfair trade practice, before issuing a cease and desist order, the Commissioner must

Hold a hearing

When an annuity is written, whose life expectancy is taken into account?

annuit

A Return of Premium term life policy is written as what type of term coverage?

increasing

Which of the following settlement options in life insurance is known as straight life?

Life income

in forming an insurance contract, when does acceptance usually occur?

when insurers underwriter approves

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?

reduction of premium

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?

term rider

Which of the following best describes what the annuity period is?

the period of time during which accumlated money is converted into income payments