Exam

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority.

All of the following information about a customer must be used in determining annuity suitability EXCEPT

beneficiary's age

Events or conditions that increase the chances of an insured loss occurring are referred to as

hazards

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

payor benefit rider

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may

require evidence of insurability

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?

Automatic premium loan- automatic premium loan provision is not required, but is commonly added to contracts with a cash value at no additional charge. This is a special type of loan that prevents the unintentional lapse to a policy due to nonpayment of the premium

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years

If the benefits from a life insurance policy are not paid to the beneficiary within 90 days, what is the minimum interest rate the insurer will have to pay on the 91st day?

11%. Benefits payable that have not been paid to the beneficiary within 90 days of the receipt of proof of death will accrue interest, starting on the 91st day, at the stated rate (8% minimum) plus 3%.

What limits the amount that a policyowner may borrow from a whole life insurance policy?

Cash value plus loan interest

Which of the following is NOT typically excluded from life policies?

Death due to plane crash for a fare-paying passenger

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 determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Size of each installment

Group life insurance policies delivered in this state must contain all of the following provisions EXCEPT

Statements of the applicant are considered warranties

Nonforfeiture values guarantee which of the following for the policyowner

That the cash value will not be lost. Because permanent life insurance policies have cash values, there are certain guarantees built into the policy that cannot be forfeited by the policyowner. Nonforfeiture values give the insured the right to the cash value even if the policy lapses or is surrendered.

Which of the following statements is correct regarding the separate account for collected premiums established and maintained by a producer?

The account may be interest bearing.

n a survivorship life policy, when does the insurer pay the death benefit?

Upon the last death

All of the following statements concerning dividends are true EXCEPT

Dividend amounts are guaranteed in the policy

The general powers and duties of the Insurance Department include all of the following EXCEPT

Enacting statutes to regulate the insurance industry

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

Life Income

Which nonforfeiture option provides coverage for the longest period of time? a)

Reduced paid-up. The reduced paid-up nonforfeiture option would provide protection until the insured reaches 100, but the face amount is reduced to what the cash would buy.

Upon reinstatement or renewal of a policy, after a written request by the insured, how soon must an insurer provide a copy of the policy application?

15 days

When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy for

3 years

Within how many days of receipt of proof of death must the insurer pay the death benefit to the beneficiary to avoid paying an interest penalty?

90 days Benefits payable that have not been paid to the beneficiary within 90 days of the receipt of proof of death will accrue interest, starting on the 91st day, at the stated rate (8% minimum) plus 3%.

All of the following events will terminate a producer's appointment with an insurer EXCEPT

A new Commissioner is put into office.

An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?

A portion of the benefit up to a limit is tax free; the rest is taxable income

Any life insurance policy that accumulates cash values must include a provision for policy loans after a certain period of time. In the state of Washington, that period of time is

After 3 full years of premium payments.

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyway and pay the face value to the beneficiary

The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option in this case?

The beneficiary- If a settlement option is not selected by the policyowner before the insured dies, then the beneficiary can choose the option

The annuity owner dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following is TRUE?

The cash value will be paid to the annuitant's estate.

All of the following statements are true regarding installments for a fixed amount EXCEPT

The payments will stop when the annuitant dies.

The paid-up addition option uses the dividend?

To purchase a smaller amount of the same type of insurance as the original policy.

Which of the following is a feature of a variable annuity?

Benefit payment amounts are not guaranteed

When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

Fixed amount. When the fixed amount settlement option is chosen, the policyowner sets the amount of each installment. The insurer will determine how long the installments are to be paid.

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. The guaranteed insurability option allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability.

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

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

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount- the accidental death rider pays 2 or 3 times the face amount if death is the result of an accident as defined in the policy and occurs writhing 90 days of such an accident

All of the following are required to be included in all life insurance policy illustrations EXCEPT

Marital status of the insured

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report

The following are features of the Indexed Universal Life EXCEPT

Sale of this product requires a securities license.

Which of the following is a key distinction between variable whole life and variable universal life products?

Variable whole life has a guaranteed death benefit

The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called

Life income with period certain