Guaranteed Test 4

An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a

403(b) Plan(TSA)

The full premium was submitted with the application for life insurance, and the policy was issued 2 weeks later as a requested. When does the policy coverage become effective?

As of the application date

Which of the following is TRUE about credit life insurance?

Creditor is the policyowner.

All of the following are dividend options EXCEPT

Fixed period installments

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection

When a replacement carrier has a question regarding the prior carriers coverage, from which of the following can they demand a clarification?

The prior carrier

An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of

A STOLI policy

The policy owner 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. Which settlement option should the policy owner choose?

Interest only option

Which of the following will be included in a policy summary?

Premium amounts and surrender values

To which of the following products does the Replacement Regulation apply?

Whole life insurance

If any individual submits a written request to an insurance company requesting access to his/her own recorded personal information, all of the following requirements are true EXCEPT

The company will forward all necessary correspondence within 60 business days from the date a request is received

According to the Code, how many separate requirements should an insurance policy have?

6

Any insurer who engages in the insurance business and violates the Code with respect to insurance replacement shall on the first violation

Be fined a sum of $10000

How are contributions to a tax-sheltered annuity treated with regards to taxatation?

They are not included as income for the employee, but are taxable upon distribution

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

All of the following could own group life insurance EXCEPT

A group needing low cost life insurance.

An insurer may discriminate against a person through underwriting if that person has

A physical handicap that could result in an actuarially predictable loss

All of the following statements are correct regarding credit life insurance EXCEPT

Benefits are paid to the borrower's beneficiary

An insured and his wife are both in a head on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provisions?

Common Disaster

Which of the following is true regarding a policy with a face value less than $10000?

If its return during the free look period, the agreement will be void

If an agent wishes to sell variable life policies, what license must the agent obtain?

Securities

Which settlement option provides a single beneficiary with income for the rest of his/her life?

Single life

Which of the following types of risk will result in the highest premium?

Substandard risk

The advantage of qualified plans to employers is

Tax deductible contributions

All of the following benefits are available under social security EXCEPT

welfare benefits

Any insurance agent who commits a repeated violation of the Insurance Code with respect to insurance replacement will be liable for

An administrative penalty of no less than $5000 and no more than $50000 per violation

Which of the following types of insurance policies is most commonly used in credit life insurance?

Decreasing term

A long stretch of national economic hardship causes a 7% rate of inflation. A policy owner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy writer caused this change?

Cost of living rider