final exam west virginia life only
a group life insurance policy insured may assign up to ____ of the insureds coverage
100%
a group life insurance policy may assign up to ____ of the insureds coverage
100%
the insurance commissioner must give at least ____ days notice prior to holding a hearing regarding a producers license
15
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
20,000 death benefit
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?
20-pay life accumulates cash value faster than striaght life
a labor union must have at LEAST _____ members to be issued a group life policy
25
if a life insurance policy's cash value is subject to loans exceeding _____ replacement is said to have occured
25%
once the insurance commissioner makes a ruling after a hearing, an insured or insurer may request a hearing within ____ days
30
When an employee is terminated, how long does this employee have to convert group life coverage to an individual plan
31 days
Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?
5
a producer who intentionally violates an unfair trade practice law could receive a fine up to _____ per violation
5,000
S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?
50,000
An insurer may normally delay the payment of a cash value loan or surrender value for up to
6 months
how long may an insurer defer granting a policy loan after receiving the loan application
6 months
a life policy loan in west virginia cannot charge a fixed rate of interest higher than
8%
C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true?
ABC is the policyowner, C is the insured, and ABC is the beneficiary
which of the following is NOT included in an annuity contract
AD&D rider
B the producer is not licensed to sell insurance in west virginia. If B sells an insurance policy in west virginia, who is responsible for unpaid claims for that policy
B the producer
When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?
NONE
K owns a whole life policy. If K wants an increasing death benefit to protect against inflation, which dividend option should she choose?
Paid-up additional insurance
Post-tax dollar contributions are found in
Roth IRA investments
which of the following are equity indexed annuities typically invested in
S&P 500
which of the following is NOT considered rebating
Sharing commission with an agent licensed in the same line of business
A Life insurance policyowner would like to take out a policy loan against the cash value in his Whole Life policy. The interest rate applied to this loan may vary over time. This is referred to as a ______ rate loan.
Variable
which of the following statements about noncontributory employee group life insurance is FALSE
a minimum number of employees is required to participate
which of these is NOT a reason for a business to buy key person life insurance
a pension deficiency if the key employee dies
which of the following is considered to be misrepresentation
a producer guaranteeing a policys dividends
which provision is not a requirement in a group life policy
accidental
B owns a whole life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of
additional whole life coverage at specified times
a contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of
adhesion
L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will
adjust the death benefit to a reduced amount
All are true statements regarding the underwriting process, EXCEPT:
aids and HIV virus exams can be conducted in a discriminatory fashion
q purchases 500,000 insurance policy and pays 900$ in premiums over the 6 months. q dies suddenly and the beneficiary is paid 500,000. the exchange of unequal values reflects which of the following insurance contract features
aleatory
which of the following statements is correct regarding the tax treatment of a lump-sum payment paid to a life insurance policys primary beneficiary
all proceeds are income tax free in the year they are received
the consideration clause in a life insurance contract contains what pertinent information
amount of premium payments and when they are due
an example of false advertising would be
an insurer exaggerating its dividends in a magazine advertisement
Which premium schedule results in the lowest cost to the policyowner?
annual
to be eligible for social security disability benefits, an employee must be unable to perform
any occupation
when can a policyowner change a revocable beneficiary
any time
Before a life insurance policy is issued, which of these components of the contract is required?
applicants signature
what action will an insurer take if an interest payment on a policy loan is not made on time
automatically add the amount of interest due to the loan balance
the automatic premium loan provision is designed to
avoid a policy lapse
which of these is NOT a valid reason for the insurance commissioner to deny a producers license renewal
bankruptcy
A domestic insurance company in West Virginia MUST
be incorporated and formed in west virginia
All of the following could result in the revocation of a producer's license EXCEPT
being charged with a misdemeanor for a driving incident
who is NOT required to sign a life insurance application
beneficiary
what is considered to be a characteristic of an immediate annuity
benefit payments start within one payment period of purchase
Variable Whole Life Insurance can be described as
both an insurance and securities product
a policy loan is made possible by which of these life insurance policy features
cash value provision
under an interest sensitive whole life policy
cash values are determined by interest rates
a whole life insurance policyowner does not have the right to
change the grace period
Sis covered by a whole life policy. which insurance product can cover his children
child term rider
which rider provides coverage for a child under a parents life insurance policy
child term rider
what does the west virginia life and health insurance guaranty association provide
claim payments of admitted, insolvent insurance companies
One definition of replacement is "the act of replacing an existing insurance policy with another". Replacement is
closely regulated and requires full disclosure
J is a producer who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this producer be found guilty of?
coercion
in west virginia, which of the following is considered to be an unfair trade practice
coercion
Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?
collateral assignment
which of these is a requirement for obtaining a resident insurance producer license in this state
complete a prelicensing exam
which of the following correctly explains the actions an agent should take if a customer wants to apply for a life insurance policy
complete the application and review the information with the customer prior to obtaining the customers signature, then send the application off to the insurance company
The incontestable clause allows an insurer to
contest a claim during the contestable period
insurance policies are offered on a take it or leave it basis, which make them
contracts of adhesion
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
contributory
D the agent met with a prospect and ended up selling an insurance policy. While filling out the insurance application, D makes a mistake. In this situation, D MUST
correct the information and have the prospect initial the change
which statement regarding the misstatement of age provision is considered to be true
coverage will be adjusted to reflect the insureds true age if a misstatement of age is discovered
which of these products does not require continuing education for the producer selling them
credit accident an sickness insurance
The Combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy
decreasing
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
decreasing term
A brochure including an untrue statement regarding a competitor's ability to pay claims is an example of
defamation
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?
deferred
individuals in west virginia are personally invited to apply for life insurance on the basis of the offer. this type of solicitation made by the insurer is called
direct response
what is the purpose of the west virginia life and health insurance guaranty association
ensures that claims filed against insolvent insurance companies will be paid
which of these statements is incorrect regarding the federal income tax treatment of life insurance
entire cash surrender value is taxable
What provision in a life insurance policy states that the application is considered part of the contract?
entire contract provision
when an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. what exactly does a needs analysis involve
establishes the needs of the individual and his dependents
how often must an insurance producers license in west virginia be renewed
every two years
which of these statements about a guaranteed insurability option rider is NOT TRUE
evidence of insurability is not required when the option is exercised
replacement can be defined as
exchanging an existing policy for a new policy
N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?
exclusion
a _____ contained in a life insurance policy states that the policy will not cover certain risks
exclusion
a universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, cost of insurance, and the
expense charges
which of the following nonforfeiture options offers the highest death benefit
extended term
An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)
extra premium
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?
face amount plus the policys cash value
what kind of life insurance pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of 30 years
family maintenance policy
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies in a lump sum of 20,000 at the end of that 20 year period. What type of policy should P purchase?
family maintence policy
Taking receipt of premiums and holding them for the insurance company is an example of
fiduciary responsibility
what action should a producer take if the initial premium is NOT submitted with the application
forward the application to the insurer without the initial premium
M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT
free look period has expired
An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?
full face amount minus any past due premiums
the west virginia life and health guaranty association is
funded by admitted insurance companies through assessments
the west virginia life and health insurance guaranty association is
funded by admitted insurance companies through assessments
how does the west virginia insurance commissioner attain office
gubernationial appointment
variable life products require a producer to
hold a life insurance license and a securities license
In regards to representations or warranties, which of these statements is TRUE?
if matierial to the risk, false representations will void a policy
Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?
if toms employment is terminated, 20% of the funds would be forfeited
the type of annuity that can be purchased with one monetary deposit is called
immediate annuity
Which of these actions should a producer take when submitting an insurance application to an insurer?
inform insurer to relevant information not included on the application
what is being delivered during a policy delivery
insurance contract to the proposed insured
in a key employee life insurance policy, the third-party can be all of the following except
insured
All of these statements about the Waiver of Premium provision are correct EXCEPT
insured must be eligible for social security disability for claim to be accepted
in a life insurance contract, an insurance companys promise to pay stated benefits is called the
insuring clause
how are policyowner dividends treated in regards to income tax
interest on accumulations is taxed
all of these settlement options involve the systematic liquidation of the death proceeds in the event of the insureds death except
interest only
Quarterly premium payments increase the annual cost of insurance because
interest to the insurer is decreased while the administrative costs are increased
the accidental death and dismemberment AD&D provision in a life insurance policy would pay additional benefits if the insured
is blinded in an accident
dividends paid from a life insurance policy are
issued by the insurer
On January 8, an applicant filled out and application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?
january 26
An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?
key person insurance
which of these are not an example of a nonforfeiture option
life income
an insureds inability to perform two or more activities of daily living may trigger which type of life policy rider
long term care
which of these is an element of a single premium annuity
lump sum payment
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the
marital deduction
Convincing a prospective insured to buy an insurance policy based on exaggerations is called
misrepresentation
an insurance applicant made a fraudluent statement on the application for the purpose of obtaining money benefits from an insurer. the applicant is guilty of
misrepresentation
Which type of policy is considered to be overfunded, as stated by IRS guidelines?
modified endowment contract
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
modified endowment contract (MEC)
J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of Life Insurance policy is this?
modified premium life
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for
modified whole life
which of these statements may a producer make to a client about a whole life policy
nonforfeiture benefits will be available after a period of time
a producer who is a resident in another state but licensed to transact insurance in west virginia is called a
nonresident producer
which statement is true regarding a minor beneficiary
normally, a guardian is required to be appointed in the beneficiary clause of the contract
T is an insurance license applicant who intends to primarily engage in insurance transactions on himself and his family. If the insurance department is made aware of this, T will most likely
not be issued a license
in an individual retirement account (IRA), rollover contributions are
not limited by dollar amount
all of these statements concerning settlement options are true, EXCEPT
only the beneficiary may select
which of these contracts fall under replacement regulations
ordinary life
insurance policies are considered aleatory contracts because
performance is conditioned upon a future occurance
which of these do NOT constitute policy delivery
policy issued with a rating
life insurance replacement regulation protects the interests of the
policy owner
M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the
policy proceeds
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
policyowner
who has the right to change a revocable beneficiary
policyowner
which of the following information is not required to be included i a whole life policy
policys guaranteed dividend table
consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determind
probability of making timely premiuim payments
which of these provisions require proof of insurability after a policy has lapsed
reinstatement
the provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called
reinstatment
A producer has influenced an existing policyowner to convert an existing whole life policy to Reduced Paid-up insurance. The producer then sells the policyowner a new universal life policy. This transaction is called a(n):
replacement
statements made on an insurance application that are believed to be true to the best of the applicants knowledge are called
representations
a prelicensing course must be successfully completed for which of the following
resident producer
what is the suicide provision designed to do
safeguard the insurer from an applicant who is contemplating suicide
what is old age and survivors health insurance (OASDHI) also known as
social security
Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?
split dollar plan
K is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which of these policies best fits her needs?
straight life
what type of life insurance are credit policies issued as
term
which of the following is true if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?
the account can be rolled into the surviving spouses IRA
which of the following statements is correct about an agent who is taking an insurance application
the agent should have the applicant initial any changes made on the application
C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most?
the cost
the most important factor to consider when determining whether to convert term insurance at the insureds attained age or the insureds original age is
the cost
whole life insurance is sometimes referred to as "straight life". what does the word "straight" indicate when using this phrase?
the duration of premium payments
what is the underlying concept regarding level premiums
the early years are charged more than what is needed
a noncontributory group term life plan is characterized by
the entire cost of the plan is paid for by the employer
which statement regarding the change of beneficiary provision is true
the policyowner can change the beneficiary
B the producer is scheduled for a pretrail hearing in a criminal prosecution. which of the following does NOT need to be submitted to the insurance commissioner prior to Bs hearing
the posted bond
the advantage of reinstating an original life policy is
the premiums are based on a younger age
which of the following is a requirement to attain a nonresident producer license
the producers state of residence must have reciprocity with this state
under a renewable term policy
the renewal premium is calculated on the basis of the insureds attained age
an individual who purchases a life annuity is given protection against
the risk of living longer than expected
what is the basic function of an annuity
the systematic liquidation of accumulated funds
The reason for backdating a policy is
to obtain a premium rate based on an earlier age
which of the following is a requirement to attain a west virginia resident producer license
trustworthiness and competence
a variable annuity has which of the following characteristcs
underlying equity investments
The Cash value in a(n) _____ life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors.
universal
when is the face amount paid under a joint life and survivor policy
upon the death of the insured
What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?
variable
in order to sell a ____ life policy, a producer is required to register with the financial industry regulatory authority (FINRA)
variable
life insurance immediately creates an estate upon the death of an insured. which of the following policies is characterized by a guaranteed minimim death benefit?
variable life
which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
variable life
the part of a life insurance policy guaranteed to be true is called
warranty
a 20,000 life insurance policy application is completed, however the producer does not collect the initial premium. at what point does the coverage go into effect
when the applicant receives the policy and pays the initial premium
What does the ownership clause in a life insurance policy state?
who the policyowner is and what rights the policyowner is entitled to
A producer must notify the Commissioner within _____ days following the final deposition of an administrative action by any government agency
30
life insurance death benefits up to _____ are guaranteed by the west virginia life and health guaranty association
300,000
which of these actions is NOT required when a producer replaces an existing individual life insurance policy
obtain the beneficiary's signature
according to west virginia law, a group life insurance policy requires at LEAST ____ insureds
two
Y purchased 100,000 worth or permanent protection and himself and 50,000 worth of 10-year term coverage for his wife on the same policy. which of these policies did Y purchase
whole life policy with an other insured rider
consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine
probability of making timely premium payments
why does west virginia require producers to obtain a license to solicit insurance
public protection
S the producer is charged a fee for placing an insurance policy. Under West Virginia law, S must
report the placement to his primary insurer
Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant?
risk classification
A policy of adhesion can only be modified by whom
the insurance company
a policy of adhesion can only be modified by whom
the insurance company
B the producer sold an insurance contract to a client. B has engaged in
transacting insurance
a ______ insurance company is one formed in another country other than the united states
alien
what is the initial source of underwriting for an insurance policy
application containing statements from the insured
When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?
at future dates specified in the contract with no evidence of insurability required
T is given a receipt After completing a life insurance application and paying the initial premium. Under this situation, T's coverage is
conditional, depending on the insurers underwriting guidelines
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?
conversion provision
K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?
daughter
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
decreasing term
additional coverage can be added to a whole life policy by adding a
decreasing term rider
a 45 year-old woman won $100,000 in a scratch of lottery ticket. she purchased an annuity that will pay her $1,500 per month beginning at age 60. which of these annuities did this woman purchase?
deferred fixed annuity
A ____ ______ is the signed document that starts the free look period
delivery receipt
Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE?
each partner owns a 500,000 policy on their partners life
a limited-pay life policy has
premium payments limited to a specified number of years
which of the following actions is NOT possible with a universal life policy
premiums may be applied as a credit against income tax
in west virginia, an insurer licensed to conduct business in west virginia, but domiciled in new jersey is called a
foreign company
which of the following actions require a policyowner to provide proof of insurability in an adjustable life policy
increase face amount
who approves continuing education courses in west virginia
insurance commissioner and the board of insurance agent education
What is being delivered during a policy delivery
insurance contract to the proposed insured
Who has the option to renew a renewable term policy?
insured
Variable annuities may invest premiums in each of the following, EXCEPT:
insurers corporate business account
The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n)
insuring agreement
a policyowner would like to change the beneficiary on a life insurance policy and make the change permanent. which type of designation would fulfill this need
irrevocable
which type of life insurance beneficary requires his/her consent when a change of beneficiary is attempted by the policyowner
irrevocable beneficiary
a license may be denied, suspended, or revoked if the licensee
is found guilty of misrepresentation
A stock insurance company
is owned exclusively by its shareholders
defamation occurs when a producer makes a false statement intended to
malign another insurer
which of the following provides funding for the west virginia life and health guaranty
member company assets
Which Unfair Trade Practice involves a producer suggesting that an insurance policy is like a share of stock
misrepresentation
Which Unfair Trade Practice involves a producer suggesting that insurance policy is like a share of stock
misrepresentation
which unfair trade practice involves a producer telling a prospective client that a policys dividends are guaranteed
misrepresentation
an example of rebating would be
offering a client something of value not stated in the contract in exchange for their business
M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?
pay face amount minus the past due premium
which of these statements concerning an individual straight life annuity is accurate
payments are made to an annuitant for life
When an employee is terminated, which statement about a group term life conversion is true?
policy proceeds will be paid if the employee dies during the conversion period
which is true concerning a variable universal life policy
policyowner controls where the investment will go and selects the amount of premium payment
a policyowner is able to choose the frequency of premium payments through what policy feature
premium mode
