Exam FX Test
An individual not covered by an employer sponsored plan who has earned income.
Who can make a fully deductible contribution to a traditional IRA?
Premiums are determined by the age, sex and occupation of each individual certificate holder.
All of the following are characteristics of group life insurance, EXCEPT
The plan is funded by permanent insurance only
All of the following are true key person insurance Except
Refund the premiums paid
An insured committed suicide one year after his life insurance policy was issued. The insurer will
9,800
An insured had a 10000 term life policy. The annual premium of 200 was due on February 1 however, the insured failed to pay the premium. He died on February 28 How much would the beneficiary receive from the policy
Hazards
Events or conditions that increase the chances of an insured loss occurring are referred to as
"Not taxable" since the IRS treats them as a return of a portion of the premium paid.
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
180 days
Temporary licenses can last for how long?
The beneficiary will receive the greater of the money paid into the annuity or the cash value
The annuitant dies while the annuity is still in the accumulation stage. Which of the following is true
Express Authority
The autority granted to an agent through the agent contract is referred to as
gradually increases each year by the amount that the cash value increases
The death benefit under the Universal Life Option B
Annually Renewable Term
The least expensive first year premium is found in which of the following polices
Signed waiver of premium
Upon policy delivery, the producer may be required to obtain any of the following except
The owner will receive the surrender value of the annuity
What happens if a deferred annuity is surrendered before the annuities action period
To protect the public
What is the main justification for the existence of the State Insurance Department?
15
What is the minimum age for purchasing life insurance policy in this state?
An applicant who is a smoker
Which of the following appliicants could the insuer charge a higher rate of premium and not violate regulations regairing unfair discrimation?
The insureds medical history
Which of the following are generally not considered when underwriting group insurance
They earn lower interest rates than fixed annuities
Which of the following is NOT true regarding Equity Indexed Annuities?
It needs IRS approval
Which of the following is Not true regarding a non qualified retirement plan
The annuitant assumes the risks of investment
Which of the following is TRUE regrading variable annuities
single life
Which settlement option provides a single beneficiary with income for the rest of his/her life?
It has a guaranteed minimum interest rate
Why is an equity indexed annuity considered to b e fixed annuity
the refund of the original amount minus payments already made
With the cash refund option, when the annuitant dies, what would the beneficiary receive
Survivor Protection
A producer is helping a married couple determine the financial needs of their children in the event one or both die prematurely. This is a personal use of life insurance known as
Insurer
All advertisements are the responsibility of the
the interest is not taxable since it remains inside the insurance policy
All of the following are True statements regarding the accumulation at interest option Except
specified
All of the following are beneficiary designations except
They are not included as income for the employee, but are taxable upon distribution
How are contributions to a tax-sheltered annuity treated with regards to taxation?
Increasing
A return of premium term life poilcv is written as what type of coverage?
Guaranteed surrender value
According to the nonforfeiture law. If the owner decides to surrender a deffered annuity prior to annuitization, the owner is entitled to which of the following
The plan is funded by permanent insurance only
All of the following are true of Key Person insurance EXCEPT
The plan is funded by the permanent insurance only
All of the following are true of Key Person insurance EXCEPT
At distribution, all amounts received by the employee are tax free
All of the following are true regarding a qualified annuity EXCEPT
This rider is available to all insureds with no additional premium
All of the following are true regarding the guaranteed insurability rider EXCEPT
Suggesting negotiations in settling the claim
All of the following are unfair claims settlement practices except
A new Commissioner is put into office.
All of the following events will terminate a producers certificate of appointment Except
The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy
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,
The insurer will pay the full death benefit from the group policv to the beneficiary
An employee quits his job on May15 and doesn't convert his group life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
profit-sharing plan
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this term called?
Common Disaster
An insured an his wife are both involved in a head on collision. The husband dies instantly, and the wife dies 15 days later. The comapny pays the death benefit to the estate of the insured. This indicates that the life insu rance policy had what provision
Paid-Up Additions
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?
2 years
How long must an insurer keep the receipt of a policy delivery to the policy owner if the delivery was by mail?
The balance of the loan will be taken out of the death benefit
If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?
The policy will terminate when the cash value is reduced to nothing
If an insured continually uses the automatic premium loan option to pay the policy premium
cease and desist order
If the commissioner believes that a producer may be in violation of an incurance law or regulation what may be issued
Amount of premium
In flexible premium payment annuities, the term flexible refers to what?
False Financial Statements
When an insurance agency published an advertising brochure , it emphasized the company financial stability and sound business practices. In reality, it's financial health is terrible and the company will soon have to file for bankruptcy which of the following terms best describes the advertisement
Extended Term
Which nonforfeiture option has the highest amount of insurance protection?
Notice Regarding Replacement
Which of the following documents must be provided to the policyowner or applicant during policy replacement?
Life Paid-up at Age 65
Which of the following is an example of a limited pay policy?
Premiums are not tax-deductible as a business expense
Which of the following is correct concerning the taxation of the premiums in a key person life insurance policy?
The annuitant cannot be the same person as the annuity owner
Which of the following is not true regrading the annuitant
It remains the same no matter how many children are added to the policy
Which of the following is true about the premium on the children's rider in a life insurance policy
Both annuities and life insurance use mortality tables
Which of the following is true comparison between annuities and life insurance?
Universal Life OptionA
Which of the following policies would have IRS required corridor or gap between the cash value and the death benefit?
It transfers rights of ownership from the owner to another person
Which of the following statments is true about a policy assignment?
After more than 1 year
With a single Premium Deferred Annuity SPDA when are the benefits paid?
Benefits are paid to the borrower's beneficiary.
All of the following statements are correct regarding Credit Life Insurance EXCEPT
An agent misrepresents policy benefits to convince a policy owner to replace policies
All of the following would be considered rebating EXCEPT
An agent misrepresents policy benefits to convince a policy owner to replace policies
All of the following would be considered rebating except
100.000
An individual purchased a 100000 joint life policy on himself and his wife. Eight years later he died in a automobile accident. How much will his wife receive from the policy
Fraud
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?
Whether an insurable interest exists between the individuals
If an applicant for life insurance policy and person to be insured by the e policy are two different people, the underwriter would be concerned about
As of the application date
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
Reduction of premium
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?
Interest Only Option
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. What settlement option should the policyowner choose?
The insured estate
The sole beneficiary of a life insurance policy dies before the insured if the policy owner fails to change the beneficiary before the insureds death, the proceeds of the policy will go to
It is intended to provide coverage on a date prior to the policy issue
What is the purpose of a conditional recipt?
Increasing term
What type of insurance would be used for a Return of Premium rider?
Payor Benefit
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?
Taxation on accumulation
All of the following would be different between qualified and nonqualified retirement plans except
Reduced Paid-Up
Which nonforfeiture option provides coverage for the longest period of time?
To provide a guaranteed income of a certain amount of life
What is the purpose of a fixed period settlement option
Income tax on distributions and no penalty.
What is the tax consequence of the amounts received from a Traditional IRA after the money was left in the tax deferred account for the beneficiary
Inspection Report
An underwriter may obtain information on an applicants hobbies, financial status, and habits by ordering an
30 days
When a resident producer changes his residence address, the insurance department must be notified within
A producers retirement
This states provided for a temporary license for all the following except
Fixed amount
When the policy owner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option
An insured is diagnosed with cancer and needs help paying for her medical treatment.
Under which of the following circumstances would an insurer pay accelerated benefits?
It is level term insurance
Which of the following best describes annually renewable term insurance
They have a guaranteed minimum interest rate
Which of the following is true for both equity indexed annuities and fixed annuities?
It allows the owner to surrender the annuity without a charge
Which of the following best describes a bail out provision?
Joint and Survivor
A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select
Automatic Premium Loan
A policy owner fails to pay the premium due on his whole life policy after the grace period passes but the policy still remains in force. This is due to what provision?
The producer
A producer is charged with committing several crimes in Louisiana. Who is required to report the charges to the commissioner?
They are tax deferred until withdrawn
Under a SIMPLE plan, which of the following is true regrading taxation on both contributions and earnings?
The same face amount as in the whole life policy
Under an extended term nonforfeiture option, the policy cash value is converted to
Respond to the consumer's complaint.
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must...
Reduction of premium
The policy owner 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 presentation of nonguaranteed elements of a policy
The term Illustration in a life insurance policy refers to
The insured estate
The sole beneficiary of a life insurance policy dies before the insured. If the policy owner fails to change the beneficiary before the insured death the proceeds of the policy will go to
2 years
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?
The application given to a prospective insured
Which of the following is not the consideration in a policy?
Variable Universal Life Insurance
Which of the following types of policies allows for flexible premium and a variable investment group
Option B
Which option for universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Face Amount
Which policy component decreases in decreasing term insurance?
