FINAL LIFE EXAM
All of the following are considered to be typical characteristic describing the nature of an insurance contract, EXCEPT
Bilateral
P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?
$50,000 minus any outstanding policy loans
Premature IRA distributions are assessed a penalty tax of
10%
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?
20 % is withheld for income taxes purposes
An employee with 25,000 group term life coverage was recently fired. This employees group coverage may be converted to a :
25,00 individual whole life policy
When an employee is terminated, how long does this employee have to convert group life coverage to an individual plan?
31 days
A domestic insurer kicesed to conduct bsueinss inConecciut ,us thabve theri bookd anf treov examined by the commisionat least once every
5 yhears
A life policy loan in Connecticut cannot charge a rate of interest higher than
8%
Which of the following statements about noncontributory employee group life insurance is False?
A minimum number of employees is required to particapate
Which of these is NOT a reason for a business to buy key person life insurance?
A pension deficiency if the key employee dies
Q is the insured for a $25,000 life insurance policy. Q dies October 15. Q's beneficiary receives a check for $25,108 on December 15. Why did Q's beneficiary receive an amount higher than the policy's face amount?
An insurer must pay interest on proceeds held beginning on the date of death
What is the initial source of underwriting for an insurance policy
Application containing statements from the insured
What action can a policyowner take if an application for a bank loan requires collateral?
Assign policy ownership to the bank
Which of these is NOT a duty of a producer?
Authorize payment of certain claims
S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?
Automatic Policy Loan
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
Decreasing Term
A brochure that includes an untrue statement regarding a competitor's ability to pay claims is an example of which of the following Unfair Trade Practices?
Defamation
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
If the primary beneficiary dies before the insured
The type of annuity that can be purchased with one monetary deposit is called a(n)
Immediate annuity
When must insurable interest exist for a life insurance contract to be valid ?
Inception of the contract
Which of these actions should a producer take when submitting an insurance application to an insurer
Inform insurer of relevant information not included on the application
What is being delivered during a policy delivery?
Insurance contract to the proposed insured
Which of the following is protected under the Brokered Transactions Guaranty Fund?
Insured
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
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
Life Income
The Accelerated Death Benefit provision in a life insurance policy is also known as a:
Living Benefit
Which type of policy is considered to be overfunded, as stated by IRS guidelines?
Modified Endowment Contract
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?
Modified Whole Life
Which of the following statements is correct about accelerated death benefits?
Mush have a terminal illness to qualify
When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?
None
All of the following statements are true regarding a policys Grace period, Except:
Past due premiums are waived
Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled?
Payor Clause
What is the purpose of the Insurance Guaranty Association?
Pays authorized claims for liquidated life and health insurers
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
Which of these terms accurately defines an underwriter's assessment of information on a life insurance application?
Risk Classification
What does a 401(k) plan generally provide its participants?
Salary deferral contributions
What is Old Age and Survivors Health Insurance also known as?
Social Security
Upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary?
The initial premium was NOT submitted with the application.
A level premium indicates:
The premium is fixed for the entire duration of the contract
Why does Connecticut require insurers to maintain a minimum level of assests?
To demonstrate insurer solvency?
Life Insurance companies are required to establish and maintain an anti-money laundering compliance program according to which federal regulation?
USA Patriot Act
A producer completes an application with a client for a 50,00 Life Insurance policy. At what point is the LATEST a Policy Summary and Buyers Guide must be given to the applicant?
Upon policy Delivery
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
Variable
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
Void the policy only if it is discovered during the Contestable period and proven to be material.
Which of these products does standard nonforfeiture law apply to?
Whole Life Policies
The Commissioner of Insurance may NOT suspend or revoke a producers license until
a hearing is conducted and an order issued
In a qualifed retirement plan, the yearly contributions to an eployees account
are resterited to maxium set by trhe IRS
An underwriter determines that a life insurance applicants risk should be reclassified due to a health issue. This policy may be issued with a
extra premium
A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid
mandatory income tax withholding on the transfer amount
All of these are considered to be a benefit under Social Security, EXCEPT for:
unemployment
Reinsurance is
used by insurance companies to share risks
