Excel Solutions
If the beneficiary dies from the same accident as the insured individual, the insurer will proceed as if the insured outlived the beneficiary the beneficiary outlived the insured both the insured and beneficiary died at the same time the estate was listed as beneficiary
the insured outlived the beneficiary
An example of rebating would be
A producer who shares commissions with a client
Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?
Accumulation at Interest Option
Of the following dividend options, which of these is taxable? Reduction of premium One year term Paid-up additions Accumulation at interest
Accumulation at interest
Holding premium funds for timely submission to the insurer is an example of Theft Acting in fiduciary capacity Misappropriation of funds Commingling
Acting in fiduciary capacity
An underwriter's primary responsibility to an insurer is to protect against
Adverse selection
Which of the following is considered to be the. When the accumulated value and annuity is paid out? Annuitization phase Accumulation phase Principal phase Period certain phase
Annuitization phase
How are annuities given favorable tax treatment?
Gains are taxed at distribution
How are annuities given favorable tax treatment? Gains are tax deductible Gains are tax exempt at distribution Gains are taxed at distribution Gains are converted to tax credits
Gains are taxed at distribution
An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? Incontestable period Probation period Reinstatement period Grace period
Grace period
A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) Guaranteed term rider Guaranteed insurability rider Accelerated benefit rider Cost of living rider
Guaranteed insurability rider
An annuitant is guaranteed to NOT outlive their benefits with a(n) Survivorship clause Guaranteed lifetime withdrawal benefit Period certain provision Guaranteed minimum accumulation benefit
Guaranteed lifetime withdrawal benefit
Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?
Guaranteed lifetime withdrawal benefit
Which of the following is considered to be an event or condition that increases the probability of an insurance loss?
Hazard
Which approach predicts a person's earning potential and determines how much of that would be devoted to dependents.
Human life value approach
Which of the following provisions protects a Pennsylvania policyowner from an innocent mistake on the application over two years ago? Entire contract provision Nonforfeiture provision Spendthrift provision Incontestability provision
Incontestability provision
Which of the following protects a policyowner from a misrepresentation caused by an innocent mistake? Reinstatement clause Entire contract clause Incontestable clause Nonforfeiture clause
Incontestable clause
When a producer offers something of value in return for the purchase of an insurance policy, which prohibited sales practice has been committed? Defamation Inducement Twisting Misrepresentation
Inducement
The principle of insurable interest in regards to a life insurance contract is accurately described in which statement? An agent establishes insurable interest An individual does not have insurable interest on his or her own life Insurable interest only pertains to business arrangements Insurable interest can be based on love and affection of individuals by blood or law
Insurable interest can be based on love and affection of individuals by blood or law
Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary? Interest only Dividends only Extended interest Fixed period
Interest only
A non-admitted insurer
Is not afforded protection by the guaranty fund
What happens to interest earned if the annuitant dies before the payout start date?
It is taxable
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
Life Income
Which type of annuity guarantees a stated number of income payments, whether or not the new one is still alive to receive them?
Life annuity certain
Defamation can be BEST described as Making a statement that is falsely or maliciously critical of the financial condition of an insurer Replacing an existing policy with another by using misrepresentation Offering anything of value not see it in the insurance contract to secure an order of business Using threats as a means of obstructing competition
Making a statement that is falsely or maliciously critical of the financial condition of an insurer
All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT
National Association of Insurance Underwriters
A non-participating policy will
Not pay dividends
How do interest earnings accumulate in a deferred annuity?
On a tax-deferred basis
What is an insurer required to do when faced with an error made under the misstatement of age provision? Cancel the policy Pay age-corrected benefits Pay full benefits as stated in the policy Bill the policyowner for back premiums
Pay age-corrected benefits
During the accumulation period, who can surrender an annuity? Payor Annuitant Beneficiary Policyowner
Policyowner
How are survivorship life insurance policies helpful in estate planning? Provide Funds to help fund retirement Provide funds to help pay taxes Provide funds for funeral expenses Provide tax deductions for premium payments
Provide funds to help pay taxes
Dana is an employee who deposits a percentage of her income into her individual annuity. Her company also contributes a percentage into a separate company pension plan. What kind of annuity is this considered? Qualified retirement annuity Key employee retirement annuity Executive compensation plan Keogh annuity plan
Qualified retirement annuity
All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT
Reduction of Premium
A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? Reduction of premium dividend option Extended term option Paid-up option Cash dividend option
Reduction of premium dividend option
According to Pennsylvania law, group life insurance conversion privileges must NOT allow a new policy to be issued Allow a time period to convert group life coverage to an individual life policy Allow a rate increase Require evidence of insurability
Require evidence of insurability
Which of the following enables of life policy to be replaced with another life policy and results in the postponement of the tax consequence?
Section 1035 exchange
In an insurance contract, the applicant's "consideration" is the
Statements made in the application and the premium
A producer does NOT have a fiduciary responsibility to
The Pennsylvania guaranty association
Which of these statements regarding the annuitant is CORRECT? The contract can only be signed by the annuitant The annuitant is the only individual who can surrender the contract The annuitant must be the beneficiary The annuitants life expectancy determines the annuity payments
The annuitant's life expectancy determines the annuity payments
What does a life insurance policy guarantee to the stated beneficiary upon the death of the insured?
a specified amount of money
An individual most likely will have an insurable interest in insuring a persons life if
an economic interest exists for the continuance of the insured's life
Fixed period settlement options are considered to be a form of a(n) Cash loan value Variable life policy Annuity Endowment
annuity
The deeds and actions of a producer indicate what kind of authority? Express Apparent Implied Conditional
apparent
Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT
beneficiary
Under a group life policy, the insurer will issue an individual _____ to the policyowner for delivery to each person insured. policy certificate application rider
certificate
Level premium permanent insurance accumulates a reserve that will eventually equal the face amount of the policy pay a dividend to the policyowner require the policyowner to make periodic withdrawals become larger than the face amount
equal the face amount of the policy
Under a non-qualified annuity, interest is taxed after the Deposits have been made Death of an annuitant Distribution of payments Exclusion ratio has been calculated
exclusion ratio has been calculated
Which of the following is present when an applicant stands to lose value if the insured dies? Insurability Offer and acceptance Insurable interest Consideration
insurable interest
Who assumes the investment risk with a fixed annuity contract? The owner The annuitant The insurer The beneficiary
insurer
Which contract element is insurable interest a component of?
legal purpose
Which type of annuity stops all payments upon the death of the annuitant? Life annuity Period certain annuity Cash refund annuity Joint and survivor annuity
life annuity
A life insurance policy that has premiums fully paid up within a stated time period is called
limited payment insurance
A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n) insuring clause payor provision reinstatement provision nonforfeiture provision
nonforfeiture provision
How are contributions made to a Roth IRA handled for tax purposes? Fully tax deductible Not tax deductible Partially tax deductible Conditionally tax deductible
not tax deductible
In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST remit all past-due premiums within the grace period provide evidence of insurability to the insurer resubmit a new life insurance application provide a valid reason for the lapse
provide evidence of insurability to the insurer
An annuity is primarily used to provide retirement income disability income long-term care benefits death benefits
retirement income
A whole life insurance policy accumulates cash value that becomes The policy loan value which of the insured may borrow against The death benefit The source of funding for administration fees A source of funding a term rider to the policy
the policy loan value which the insured may borrow against
Loans obtained by a policyowner against the cash value of a life insurance policy are treated as taxable income would not be treated as taxable income are limited by the face amount of the policy would be subject to a Federal estate tax
would not be treated as taxable income
The free look period provided in a life insurance policy is usually
10 days
A rollover from a Traditional IRA to another IRA MUST be done within ___ days to avoid tax consequences. 15 30 60 90
60
Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application? A waiver of premium A replacement form A good health statement An exclusion
A good health statement
How soon can the benefit payments begin with a deferred annuity?
A minimum of 12 months after date of purchase
A producer's license CANNOT be revoked without
A hearing given to the producer
Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider? Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value
Can be converted to permanent coverage without evidence of insurability
Which of the following is a requirement for ANY change in an insurance application? Change must be initialed by the agent Change must be initialed by the applicant Change must be approved by the insurer Change must be notorized
Change must be initialed by the applicant
A provision that allows a policy owner to temporarily give up ownership rights to secure a loan is called a(n)
Collateral assignment
In Pennsylvania, who is responsible for continuing education course content approval Pennsylvania department of education Naic Commissioner NIPR
Commissioner
Which of the following would be considered an underwriting duty of an agent? Requesting medical information from the medical information bureau Completing all applications and collecting initial premiums Excepting or declining an application Assigning a risk classification
Completing all applications and collecting initial premiums
Intentional withholding of material facts that would affect and insurance policies validity is called a(n)
Concealment
Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity? Payments cease 5 years after the annuitant's death During periods of inflation, annuitants will experience an increase in purchasing power of their payments During periods of inflation, annuitants will experience a decrease in purchasing power of their payments Payment amounts can be unpredictable from month to month
During periods of inflation, annuitants will experience a decrease in purchasing power of their payments
Which of these statements concerning Traditional IRAs is CORRECT?
Earnings are taxable when withdrawn
What is the name of the provision which states that a copy of the application must be attached to the policy when issued
Entire Contract
Craig purchased a life insurance policy to enable his heirs to pay estate taxes. What is this called? Estate conservation Liquidity maintenance Survivor fund Human value protection
Estate conservation
Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called estate funding capital withholding capital gains estate conservation
Estate conservation
Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true? The policy automatically converts to whole life after the 10-year period The face amount will remain constant and the premium will increase over the 10-year period The premium will remain constant and the face amount will increase over the 10-year period The face amount and premium will remain constant over the 10-year period
The face amount and premium will remain constant over the 10-year period
Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true? The policy may be paid up early by using accumulated cash values The policy my be paid up early by using policy dividends The policy's premiums will increase after 20 years The policy's cash values steadily decrease after 20 years
The policy may be paid up early by using policy dividends
All of the following riders can increase the death benefit amount EXCEPT
Waiver of Premium
All of these statements concerning whole life insurance or false EXCEPT
When a whole life policy surrendered, income taxes may be owed