Guarantee Exam

In a noncontributory group policy

100% of eligible employees must participate.

How long does the law require agents to maintain records of transactions pertaining to premium payments?

3 years

A life insurance policy qualifies as a Modified Endowment Contract (MEC) if the amount of premium paid exceeds the amount that would have provided paid-up insurance in how many years?

7 years

Which of the following is NOT considered eligible for group life insurance?

A credit union that needs coverage only for its top 10 employees

A viatical settlement is a transaction outside the life insurance company where the owner sells the life insurance policy for which of the following?

A percentage of the face amount of the policy

If an insured dies, and it is discovered that the insured misstated his/her age or gender, the life insurance company will

Adjust the death benefit to what the premium would have purchased at the actual age or gender.

Which of the following statements is INCORRECT concerning Modified Endowment Contracts (MECs)?

An MEC must always pass the 7-pay test.

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Extended term

As an insurer's field underwriter, a producer has all of the following responsibilities EXCEPT

Issuing policies on behalf of the insurer.

Cash Value guarantees in a whole life policy are called

Nonforfeiture values.

Key person insurance can provide protection for all of the following economic losses to a business EXCEPT

Pay the death benefit to the estate of the insured.

All of the following statements about indexed whole life insurance are correct EXCEPT

The policy face amount remains level throughout the life of the policy.

When an insured terminates membership in the insured group, the insured can convert to

Whole life without proof of insurability.

All of the following are consideration in an insurance policy EXCEPT

cash value in the policy.

An annuity owner receives the same guaranteed payment every month. What type of annuity is it?

fixed

An insurance company that is owned by the policyholders is called a

mutual insurer

A married couple purchase a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either one of them were unable to continue making the premium payments due to death or disability. Which policy rider should their agent recommend?

payor benefit

Within how many days after receiving a written communication of replacement must an existing insurer provide a policyowner with a policy summary?

10 days

Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy?

An Accidental Death Rider

What is the maximum loan amount a policyowner may withdrawal from a variable universal lite insurance policy?

An amount not exceeding the cash value

All of the following could qualify as a group for the purpose of purchasing group life insurance EXCEPT

An association formed 1 year ago.

Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs?

Applicants who may require a larger death benefit in the future should buy convertible term insurance.

Joe moved last year and forgot to notify the Department of is change of address. He was charged a $250 fine. This year Joe moves again, and again forgets to notify the Department within the required time. What will Joe's penalty be?

A minimum fine of $500 or suspension or revocation of his license

According to the life insurance replacement regulations, which of the following would be an example of policy replacement?

A policy is reissued with a reduction in cash value

Which of the following would NOT trigger the payment of Accelerated Death Benefits?

Being permanently disabled

Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options?

Both guarantee that the principal and interest will be fully paid out.

Which of the following best defines the unfair trade practice of rebating?

Offering an inducement of something of value not specified in the policy

What effect will the long-term care (LTC) rider have on the death benefit of a life insurance policy if LTC benefits were paid to the insured?

Reduce the death benefit

All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT

Reports may be sent to anyone who requests one.

Variable insurance and variable annuities are regulated by

SEC, FINRA and Departments of Insurance.

An individual receives a lump-sum inheritance. He'd like to use the money to create a lifetime income since he'll be retiring soon. He purchases an annuity and wishes to receive payments beginning in 2 months. What did he buv?

Single Premium Immediate Annuity

Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application?

The application contains material misstatements.

All of the following are true about key-person insurance EXCEPT

The death benefit is taxable to the business.

In the state of florida, which of the following government entities is responsible for the administration and regulation of insurance?

The department of financial services

A licensee may have their license suspended, terminated or revoked for all of the following EXCEPT

Unknowingly overinsuring any property insurance risk

To be valid, an insurance policy must have all of the following EXCEPT

countersignature

An employee dies having 6 quarters of coverage during the previous 13-quarter period. What status of coverage does the employee have under Social Security?

currently insured

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select?

joint and survivor

The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT

purchase of a new home

Variable life insurance is regulated by all of the following entities EXCEPT

The U.S. Department of Treasury.

All of the following statements regarding the Life insurance Policy Summary are correct EXCEPT

It must illustrate all guaranteed policy dividend values.