Exam
Which of the following describes the process of selection, classification, and rating of risks? A. Underwriting. B. Cost of Management. C. Adverse selection. D. Claims experience.
A. Underwriting.
The Insurance Commissioner does NOT have authority to examine the business affairs and financial conditionsof A. Foreign insurance companies B. Multi-line insurance agencies C. Group policyowners D. Surplus lines agents
C. Group policyowners
Which statement is NOT a characteristic of a Group Life Insurance Plan? A. A master contract. B. Probationary periods. C. Individual underwriting. D. Certificate of insurance.
C. Individual underwriting.
The insured chose not to purchase physical damage coverage on a golfcart. Which method of handling risk does this describe? A. Avoidance B. Reduction C. Retention D. Transfer
A. Avoidance
The Insurance Security Fund protects insureds from an insurer's: A. Underwriting practices B. Liquidation C. Premium increases D. Benefit reductions
B. Liquidation
An insurance company may contest a life policy within a MAXIMUM of how many years after the policy's effective date? A. One B. Two C. Three D. Four
B. Two
An insured has a 5-year Renewable Term Life Insurance Policy. Upon exercising the renewable privilege, the insured MUST A. Provide evidence of insurability. B. Renew for at least 10 years. C. Pay an annual premium that may be higher. D. Covert to a whole life policy.
C. Pay an annual premium that may be higher.
Which kind of retirement plan can 75-employee for profit corporation establish? A. Roth IRA. B. 403(b). C. SIMPLE IRA. D. Keogh.
C. SIMPLE IRA.
In Wisconsin what is the MINIMUM grace period required on life insurance policies? A. Seven days B. Ten days C. Thirty-one days D. Forty-five days
C. Thirty-one days
All of the following statements regarding the concept of insurable interest, as related to the life insurance contract are true EXCEPT A. Insurable interest can be based on a financial interest. B. The life insurance definition of insurable interest is broad enough to recognize a sentimental interest based on love and affections. C. Sentimental attachment alone is sufficient for establishing insurable interest. D. A court of law must establish the insurable interest relationship.
D. A court of law must establish the insurable interest relationship
The period after an annuity is purchased but before distributions begin is referred to as the A. Annuity phase. B. Build-up phase. C. Endowment phase. D. Accumulation phase.
D. Accumulation phase.
Who can surrender an annuity during the accumulation period? A. The company. B. The beneficiary. C. The annuitant D. The policyowner.
D. The policyowner.
Which of the following is a potential DISADVANTAGE of a fixed annuity? A. Annuitants could experience a decrease in in the purchase power of their payments over a period of years due to inflation. B. There is no guaranteed specific benefit amount to the annuitant. C. The insured invests payments in variable securities, and the return fluctuates with an uncertain economic market. D. Payments continue only for a maximum of 2 years after the annuitant's death.
D. Payments continue only for a maximum of 2 years after the annuitant's death.
Keogh (HR 10) plans were designed to provide retirement benefits for A. Educators. B. Federal employees. C. Healthcare workers. D. Self-employed individuals.
D. Self-employed individuals.
Which of the following terms describes the fact that both parties of a contract may NOT receive the same value? A. Aleatory B. Indemnity C. Personal D. Unilateral
A. Aleatory
Rob, Joe, and Mike are brothers who have a $60,000 "first-to-die" joint life policy covering all three of their lives. If Joe dies first, the policy proceeds A. Will not provide further insurance protection. B. Must be shared equally by Rob and Joe's wife. C. Will accumulate with interest until another brother dies and then be awarded to the surviving brother. D. Must be awarded to Joe's estate.
A. Will not provide further insurance protection.
An open peril policy provides coverage for all of the following A. Perils specifically named in the policy. B. Risks of direct physical loss except those excluded. C. Risk of direct physical loss except theft. D. Perils listed in the insuring agreement.
B. Risks of direct physical loss except those excluded.
An intermediary MUST complete and have the applicant sign a notice regarding replacement of life insurance if a new life insurance policy or a new annuity will replace A. Credit line insurance B. A group annuity contract C. A variable life policy D. Group life insurance
C. A variable life policy
A life insurance policy's double indemnity provision would apply when the policyowner's death accors due to A. War. B. Illness. C. An accident. D. Natural causes.
C. An accident.
Which term describes naming a contingent beneficiary as "all of my children"? A. Successive beneficiary. B. Tertiary Designation. C. Class Designation. D. Trust Arrangement.
C. Class Designation.
In Wisconsin the intermediary holding which of the following licenses is exempt from continuing education replacements? A. Life B. Accident and Health C. Credit Insurance D. Property and Casualty
C. Credit Insurance
Which of the following is typically NOT a source of underwriting information for life or health insurance? A. Application. B. Attending physician's statement. C. Disclosure authorization response. D. Medical information Bureau (MIB) reports.
C. Disclosure authorization response.
The taxable portion of a monthly income benefit paid during the annuity phase A. 7-pay test. B. Mortality table. C. Exclusion ratio. D. 1035 exchange.
C. Exclusion ratio.
In which of the following fixed annuity features is the surrender value tied to the interest rates? A. Fixed value rates B. Variable sub accounts C. Market value adjustments D. Interest sensitive trigger
C. Market value adjustments
All forms of insurance determine exposure though A. The affordable Care Act. B. Data from population tables. C. Risk pooling and the law of large numbers. D. Knowledge of the average age and gender of a specific area.
C. Risk pooling and the law of large numbers.
Which of the following statements is true about Certificates of Insurance? A. They summarize the coverages provided by the underlying policy B. They can affirmatively amend or alter coverage provided by the underlying policy C. They can negatively amend or alter coverage provided by the underlying policy D. They can extend the coverage provided by the underlying policy
A. They summarize the coverages provided by the underlying policy
A violation of the US Code 1033, crimes by or affecting persons engaged in the business of insurance whose activities affect interstate commerce, is processed through A. US Attorney General. B. State Attorney General. C. National Association of Insurance Commissioners. D. Director of the National Insurance Crime Bureau.
A. US Attorney General.
Under Wisconsin law, which of the following is NOT required to be licensed? A. An employee of a collection agency who collects delinquent premiums B. A person who solicits insurance on a door-to-door basis C. A person who advises another person about insurance needs and coverage and is directly compensated by the insured only D. A person who advises another person about insurance needs and coverage and directly compensated by an insurance company
A. An employee of a collection agency who collects delinquent premiums
Regulations on life insurance advertising apply to which of the following insurance company materials? A. An internal report that describes a new product to its intermediaries B. An announcement from a group life policyholder to eligible person about coverage C. A radio commercial that promotes the benefits of a specific company's life insurance products D. A summary plan description issued to a group certificate holder
A. An internal report that describes a new product to its intermediaries
Which of the following products is designed to pay benefits that can provide a stream of retirement income to the purchaser? A. Annuity contract B. Tax-deferred growth C. Variable life insurance D. Modified endowment contract
A. Annuity contract
An insurance intermediary may share commissions received on the sale of an insurance policy with: A. Another intermediary licensed in the same line of insurance B. An insurance company representative C. A financial planner D. An attorney
A. Another intermediary licensed in the same line of insurance.
Which of the following is CORRECT about an intermediary's sales presentation of a participating life policy? A. Any reference to dividends must include a statement that dividends are not guaranteed. B. The intermediary must present the mortality table used for the policy. C. The intermediary must explain the applicable Nonforfeiture values. D. The intermediary must explain Surrender Cost Indexes for five and ten years.
A. Any reference to dividends must include a statement that dividends are not guaranteed.
When an intermediary's license is revoked for failure to meet continuing education requirements the intermediary CANNOT A. Be present during the solicitation of insurance by another intermediary B. Reapply for an intermediary's license for one year C. Be employed as a claims adjuster for an insurance company D. Be employed to sell stocks and bonds
A. Be present during the solicitation of insurance by another intermediary
The grace period is a period of time A. Between the death of the insured individual and the payment of the benefits. B. After the premium is paid and before the policy is issued. C. After the premium is received and before the policy is issued. D. After the premium is due but while the policy remains in force.
A. Between the death of the insured individual and the payment of the benefits.
When a policy owner requests a partial surrender from her Universal Life Policy she is requesting which of the following? A. Cash Withdrawal. B. A loan from the policy. C. Surrender of the policy. D. Decrease in the coverage amount.
A. Cash Withdrawal.
If an intermediary's license has been revoked for nonpayment of fees, the EARLIEST that the intermediary may apply for reinstatement is: A. Immediately after the revocation B. One year after the revocation C. Three years after the revocation D. Five years after the revocation
A. Immediately after the revocation
The settlement option that allows proceeds to remain with the insurer and the earnings to be paid to the beneficiary on a monthly basis is called A. Interest only. B. Lump sum. C. Fixed period. D. Fixed amount.
A. Interest only.
Which of the following statements BEST describes a single premium cash value policy? A. It requires only one payment to make the policy paid up. B. It provides for only premium if the owner becomes disabled. C. It waives one future premium if the owner becomes disable. D. It requires the policyowner to pay one premium annually.
A. It requires only one payment to make the policy paid up.
Which of the following statements BEST describes a single premium cash value policy? A. It requires only one payment to make the policy paid. B. It provided for only on premium to paid without evidence of insurability. C. It waives one future premium if the owner becomes disabled. D. It requires the policyowner to pay one premium annually.
A. It requires only one payment to make the policy paid.
The purpose of the replacement regulation is to: A. Keep policy substitutions to a minimum B. Limit the opportunities for misrepresentation by intermediaries C. Protect the insurance commissioner from lawsuits filed by insureds D. Protect intermediaries from lawsuits filed by insureds
A. Keep policy substitutions to a minimum
Which of the following is an approach to calculate the appropriate amount of life insurance coverage? A. Needs approach B. Capital liquidation method C. Policy cost comparison method D. Life style maximization approach
A. Needs approach
What element of a contract does the application represent? A. Offer B. Acceptance C. Consideration D. Competent parties
A. Offer
The accumulated cash value of a whole life insurance policy becomes the: A. Policy loan value upon which the insured may borrow. B. Amount used to purchase paid up additions to the insured's policy C. Funds used to offset policy administration and conversion expenses. D. Face amount payable upon the insured's death.
A. Policy loan value upon which the insured may borrow.
A reinstatement clause outlines reinstatement conditions that include A. Proof of insurability. B. A higher premium charge. C. A decrease in policy limits. D. Premiums based on current age.
A. Proof of insurability.
A single premium immediate annuity is MOST often used for A. Retirement income. B. Children's college expenses. C. Mortgage payments. D. Vacation expenses.
A. Retirement income.
How many days does a terminated employee have to convert his group life insurance policy to an individual policy? A. 15 B. 31 C. 45 D. 60
B. 31
In Wisconsin, an "intermediary" is defined as a representative of: A. A broker B. A solicitor C. An insured D. An insurance company
B. A solicitor
An annuity product linked to a market-related rate of return is called A. A fixed annuity. B. An indexed annuity C. A deferred annuity D. A tax-sheltered annuity
B. An indexed annuity
Loans may generally be obtained against the cash value of a personal life insurance policy and policy loan proceeds: A. Accelerate the benefits under the policy. B. Are not treated as taxable income. C. Are subject to Federal estate tax. D. Generate nontaxable interest income.
B. Are not treated as taxable income.
Implied authority is defined as the A. Power specifically granted in writing to the agent in the agency agreement. B. Authority that an agent can reasonably assume to accomplish the day-to-day activities of the job. C. Capability to collect past due premiums and reinstate lapse policies. D. Ability to act outside the authority specifically granted in an agency agreement and extend the company's liability.
B. Authority that an agent can reasonably assume to accomplish the day-to-day activities of the job.
What type of insurance is the cheapest option to pay off a 30-year mortgage balance? A. Increase term insurance. B. Decrease term insurance. C. Level term insurance. D. Variable life insurance.
B. Decrease term insurance.
The Internal Revenue Code (IRC) enables a tax-free, Section 1035 exchange of a life insurance policy to a different policy if its occurs A. From agent to agent within the same insurance company. B. Directly from the policyowner to the insurance company. C. From insurer to insurer and the policyowner does not receive any cash. D. With a 6-month period and any additional cash is reported to the IRS.
B. Directly from the policyowner to the insurance company.
Who would NOT be covered under an additional insured rider attached to the life insurance policy? A. A spouse. B. Employees. C. Minor children. D. Dependent parents.
B. Employees
Generally, all of the following apply to group life insurance EXCEPT A. Individual underwriting is not required. B. Evident of insurability is not required. C. It is priced according to the risk factors of the group. D. The insured pays a higher rate of the group policy.
B. Evident of insurability is not required.
Which of the following provides a death benefit if the spouse of the insured dies? A. Accelerated death benefit rider. B. Family Term insurance rider. C. Guaranteed insurability rider. D. Long-term care insurance rider.
B. Family Term insurance rider.
Which of the following entities is responsible for providing insureds notice of their right to file a complaint with the Office of the Commissioner of Insurance? A. Attorney General B. Insurer C. Intermediary D. Office of the Commissioner of Insurance
B. Insurer
The purpose of licensing insurance intermediaries is to show to the satisfaction of the Commissioner all of the following EXCEPT that the applicant A. Intends, in good faith, to do business as an intermediary B. Is competent and trustworthy C. Has not filed for bankruptcy within the last 3 years D. Intends to abide by Wisconsin Insurance Law in writing controlled business
B. Is competent and trustworthy
The purpose of licensing insurance intermediaries is to show to the satisfaction of the Commissioner all the following Except that the applicant: A. Intends, in good faith, to do business as an intermediary B. Is competent and trustworthy C. Has not filed for bankruptcy within the last 3 years D. Intends to abide by Wisconsin Insurance Law in writing controlled business
B. Is competent and trustworthy
All of the following factors are used in life insurance premium determination EXCEPT A. Expense. B. Morbidity C. Mortality D. Interest
B. Morbidity
Extended term insurance can be selected under which whole life policy provision? A. Interest-only B. Nonforfeiture C. Cash value D. Settlement
B. Nonforfeiture
Contributions made to a Roth IRA are A. Partially tax deductible. B. Not tax deductible. C. Only tax deductible at age 50 or older. D. Tax deductible at retirement.
B. Not tax deductible.
When an intermediary has changed mailing address, the intermediary MUST notify the: A. Office of the Commissioner of Insurance by telephone of the address change within a maximum of thirty days. B. Office of the Commissioner of Insurance in writing of the address change with a maximum of thirty days C. Office of the Commissioner of Insurance in writing of the address change within a maximum of sixty days D. Company the intermediary is listed with the address change within a maximum of sixty days
B. Office of the Commissioner of Insurance in writing of the address change with a maximum of thirty days
Which of the following is an example of an unfair trade practice by an intermediary? A. Reducing the premium by increasing the deductible with full disclosure B. Paying the premium for an insured C. Referring an insured to another insurance company D. Accepting a lower commission for mass marketing
B. Paying the premium for an insured
The insurance commissioner's request for information from an insurance intermediary or other individual licensed under insurance law requires that A. The individual carefully studies and takes action B. The individual reply promptly in writing or in any other designated form C. An individual representing the insurer respond within sixty days D. An individual representing the insurer respond within ninety days
B. The individual reply promptly in writing or in any other designated form
Which of the following statements is CORRECT about an application for the life insurance that contains a misstatement of age? A. The insurance company is always liable for benefits. B. The insurer may correct the age at any time. C. The insurance company is liable for benefits only if the policy's contestable period has elapsed. D. The insurance company is liable only for the amount of the premiums paid.
B. The insurer may correct the age at any time.
Which of the following is an element of insurable risks? A. Risk must be expected B. The loss must be calculated C. Risk must be financially significant D. Cost of insurance must be unaffordable
B. The loss must be calculated
Which of the following is NOT a requirement of a qualified plan? A. It must be permanent. B. It must have a vesting schedule. C. It must discriminate as to who can participate. D. It must be written and communicated to all participants.
C. It must discriminate as to who can participate.
Term life insurance is more appropriate than whole life insurance when the A. Policyowner wants to know borrow against the life insurance policy values. B. Policyowner desires an accumulation of cash value. C. Maximum protection is needed, but the insured cannot afford premium payments for permanent insurance. D. Insured needs low cost permanent life insurance protection.
C. Maximum protection is needed, but the insured cannot afford premium payments for permanent insurance.
An accelerated death benefit A. Pays an additional benefit if the policyholder dies as a result of an accident. B. Allows the policyowner to sell their policy to a third party. C. Pays a portion of the face amount when a policyowner is determined to be terminally ill. D. Pays only in the event of an accident resulting in death.
C. Pays a portion of the face amount when a policyowner is determined to be terminally ill.
The PRIMARY purpose of the Fair Credit Reporting Act is to: A. Forewarn an issuer about an applicant's recent bankruptcy. B. Protect consumers from insurers who have filed for bankruptcy. C. Protect consumers with guidelines regarding credit reporting and distribution D. Alert insurers regarding applicants who may have poor credit histories and may be adverse rights to the company.
C. Protect consumers with guidelines regarding credit reporting and distribution
Statements by an application concerning personal health history, family health history, occupation, and hobbies are referred to as A. Depictions. B. Certifications. C. Representations. D. Personal characteristics.
C. Representations.
All forms of insurance determine exposure through A. The Affordable Care Act. B. Data from population tables. C. Risk pooling and the law of large numbers. D. Knowledge of the average age and gender of a specific area.
C. Risk pooling and the law of large numbers.
Once an insurance company's liability on a claim is established, the company MUST: A. File a report with the Office of the Commissioner of Insurance B. Review the policy's coverage provisions C. Settle the claim in good faith D. Increase the insured's rates on an equitable level
C. Settle the claim in good faith
Insurance applicants with an average life expectancy without higher than normal risk factors are considered which type of risk? A. Declined B. Preferred C. Standard D. Substandard
C. Standard
The interstate Insurance Product Regulation Commission was established to develop: A. A national database of all insurance companies B. A uniform national database of all insurance policy forms C. Uniform national standards for certain insurance policy forms D. A network of all insurance companies writing similar policy forms
C. Uniform national standards for certain insurance policy forms
Which is the name of the policy that combines a universal life policy with investment choices? A. Interest-sensitive universal life policy. B. Straight universal life policy. C. Variable universal life policy. D. Flexible universal life policy.
C. Variable universal life policy.
Specified statements made on an application that the insured guarantee to be TRUE are A. Policy provisions. B. Declarations. C. Warranties. D. Waivers.
C. Warranties.
Without written consent, a policyowner CANNOT change the beneficiary if he has named A. A contingent beneficiary. B. A revocable beneficiary. C. A permanent beneficiary. D. An irrevocable beneficiary.
D. An irrevocable beneficiary.
An intermediary who omits information on an insurance application without the applicant's knowledge and submits the application to the insurer may be guilty of A. Discrimination B. Coercion C. Misrepresentation D. Collusion
D. Collusion
If an annuity is making premium payments on a periodic basis, which type of annuity have they purchased? A. Deferred. B. Immediate. C. Fixed Period. D. Fixed Amount.
D. Fixed Amount.
When a beneficiary inherits a traditional IRA, which of the following is TRUE about taxation when the money is withdrawn? The beneficiary pays A. No tax. B. An estate tax. C. Capital gains tax. D. Income tax.
D. Income tax.
Which of the following statement is CORRECT about an insured's failure to report a claim in a timely manner based on the advice of an intermediary? A. It is a material misrepresentation. B. It affects the insured's claim settlement. C. It invalidates the claim. D. It does not affect the insurance company's obligations.
D. It does not affect the insurance company's obligations.
Universal life and variable life insurance policies contain many similar features. Which of the following features is unique to variable universal life insurance? A. It includes an option to increase, decrease, or skip premium payments. B. It allows for the option to contribute large amounts of money into the plan. C. It allows for the option to increase or decrease the amount of insurance. D. It includes the right to select the investment which will provide the greatest return.
D. It includes the right to select the investment which will provide the greatest return.
Which type of insurance policy is characterized by premiums that are fully paid up within a stated period, after which is no further premiums are Required A. Lump sum insurance. B. Basic installment insurance. C. Prepaid premium insurance. D. Limited payment life insurance.
D. Limited payment life insurance.
Which type of insurance policy is characterized by premiums that are fully paid up within a stated period, after which no further presentation are required A. Lump sum insurance. B. Basic Installment insurance. C. Prepaid premium insurance. D. Limited payment life insurance.
D. Limited payment life insurance.
An immediate annuity is designed to make its first benefit payment to the annuitant typical A. When the accumulation period, of at least 24 months, ends. B. In the form of the a lump sum payment. C. Only after all cash surrender values, with interest, have been calculated. D. One month from the annuity's purchase date.
D. One month from the annuity's purchase date.
An immediate annuity is designed to make its first benefit payment to the annuitant typically A. When the accumulation period, of at least 24 months, ends. B. In the form of a lump sum payment. C. Only after all cash surrender values, with interest, have been calculated. D. One month from the annuity's purchase date.
D. One month from the annuity's purchase date.
A common purpose for purchasing a fixed annuity is to A. Make take-free investments. B. Provide benefits to a beneficiary if the annuity holder dies. C. Allow for flexibility in terms of investment opportunities. D. Provide future economic security, as payments do no fluctuate.
D. Provide future economic security, as payments do no fluctuate.
Which kind of retirement plan can 1,500-empolyee for-profit corporation establish? A. 401(k). B. 403(b). C. Keogh. D. Simplified Employee Pension Plan.
D. Simplified Employee Pension Plan.
Who is allowed to make changes to a life insurance contract terms? A. The beneficiary B. An agent for the insurer C. An officer of the company D. The commissioner of insurance
D. The commissioner of insurance
All the following are true concerning group life policies EXCEPT A. A master policy is issued to the company. B. Individual insureds receive a certificate of insurance. C. The group must contain a specified number of members. D. The group must be formed for insurance purposes.
D. The group must be formed for insurance purposes.
An insurance company is deemed to know any facts material to a risk in which of the following situations? A. An intermediary's secretary learns of a material fact after the application is taken but fails to inform the intermediary. B. An intermediary learns of a material fact when delivering the policy. C. An intermediary's neighbor knows about a material fact but fails to inform the intermediary. D. The insured knows about a material fact but fails to inform the intermediary.
D. The insured knows about a material fact but fails to inform the intermediary.
The authorization used to obtain the applicant's medical information that will be sued by the insurer for the primary purpose of determining eligibility A. The time frame in which the insurer must release the eligibility decision to the agent. B. The name and address of the applicant's primary doctor C. The time frame in which the authorization is valid D. The name and location of the person at the insurance company that will be reviewing the records and determining eligibility
D. The name and location of the person at the insurance company that will be reviewing the records and determining eligibility
The authorization used to obtain the applicant's medical information that will be used by the Insurer for the primary purpose of determining eligibility A. The time frame in which the insurer must release the eligibility decision to the agent B. The name and address of the applicant's primary doctor C. The time frame in which the authorization is valid D. The name and location of the person at the insurance company that will be reviewing the records and determining eligibility
D. The name and location of the person at the insurance company that will be reviewing the records and determining eligibility
Which of the following is TRUE of a 10-year level term life insurance policy with a face amount of $100,000? A. The policy will be converted to a whole life policy at the end of the 10-year period. B. The face amount will remain constant as the premium increases over the 10-year period. C. The face amount will increase as dividends on the policy accumulate over the 10-year period. D. The premium and the face amount will remain constant for the 10-year period.
D. The premium and the face amount will remain constant for the 10-year period.
If the insurance Commissioner issues and order without holding an hearing, the party who is subject to the order has a MAXIMUM of how many days to dispute? A. Five B. Ten C. Twenty D. Thirty
D. Thirty
An intermediary may receive compensation from an insurer for insuring the intermediary's own life if: A. Intermediary notifies the Office of the Commissioner of Insurance B. Compensation is less than 10% of the total compensation from the insurer C. Compensation is less than 50% of the total compensation from the insurer D. Total premiums on other lives written with the same insurer in the prior year exceed the premium on the intermediary's life.
D. Total premiums on other lives written with the same insurer in the prior year exceed the premium on the intermediary's life.
The life insurance illustration rule applies to: A. Variable life B. Credit life C. Group annuities D. Universal life
D. Universal life
If an insurer determines the insured is totally disabled, the policyowner is relieved of paying the policy premiums as long as the disability continues. The statement describes the A. Double indemnity rider. B. Disability income rider. C. Return of premium rider. D. Waiver of premium rider.
D. Waiver of premium rider.
If Term Life Insurance is renewable, the policyowner is purchasing the right to renew the policy A. With proof of insurability. B. Without an increase in premiums at renewal. C. For an unlimited number of times. D. Without showing proof of insurability.
D. Without showing proof of insurability.
