Insurance

When replacing a policy, an insurer must maintain a file containing copies of all statements for

5 Years

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False Advertising

The owner of a life insurance policy dies, and no beneficiary is named. One of the owner's friends paid for part of the funeral costs. What is the maximum amount of money that the friend could be issued from the insurance policy?

$1,000

An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?

$10,000, no tax consequence

Who can make changes to the policy once it is in effect?

An executive officer of the insurer

Which of the following is a short-term annuity that limits the amounts paid to a certain fixed period or until a certain fixed amount is liquidated? a)Variable annuity b)Annuity certain c)Fixed annuity d)Refund life

Annuity certain

What is the main purpose of the Seven-pay Test?

It determines if the insurance policy is a MEC.

Variable Whole Life insurance is based on what type of premium?

Level Fixed

How must a replacing producer respond to an applicant wishing to replace existing life insurance?

The producer must provide the applicant with a Notice Regarding Replacement.

Employer contributions made to a qualified plan

Are subject to vesting requirements.

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Option B

Who may contribute to a Keogh (HR-10) plan?

Self-Employed Plumber

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed Waiver of Premium

A Buyer's Guide must be presented

When the application is taken.

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT a)Fully insured status. b)Waiting period of 5 months. c)Being age 65. d)Inability to perform any gainful work.

c)Being age 65.

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

$9,800

An intermediary has just placed insurance on himself. He can receive compensation for this transaction only if he has placed insurance on other individuals with the same insurer within the last

12 Months

Which of the following best describes fixed-period settlement option? a)Both the principal and interest will be liquidated over a selected period of time. b)Only the principal amount will be paid out within a specified period of time. c)The death benefit must be paid out in a lump sum within a certain time period. d)Income is guaranteed for the life of the beneficiary.

Both the principal and interest will be liquidated over a selected period of time.

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT a)The annual dividend is retained by the company. b)The interest is credited at a rate specified by the policy. c)The policyholder has the right to withdraw the accumulations at any time. d)The interest is not taxable since it remains inside the insurance policy.

The interest is not taxable since it remains inside the insurance policy.

An insurer decides to renew a policy but at a higher premium rate, starting on the renewal date. How many days in advance must the insured be notified?

60

Which of the following stipulates that life insurance premiums can be paid in advance of policy issuance? a)Pay a reduced death benefit b)Pay the full death benefit c)Pay nothing; there was a misrepresentation on the application d)Pay the full death benefit and refund excess premium

Payment of Premium Clause

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up

An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the interest accumulated in the annuity NOT be taxable?

Spouse

What must happen when an individual policy or annuity has been personally delivered to the policyowner?

The policyowner must sign a delivery receipt.

How long must a life insurance policy be in force before the owner can enter into a viatical settlement contract?

2 Years

The insurer must maintain copies of all signed illustrations for a minimum of how many years after the policy is no longer in force?

3 Years

An agent who has had formal disciplinary action taken against them by a state regulatory agency must notify the Commissioner of this within

30 Days

During a life insurance policy replacement, the insurer is required to provide the policyowner a free-look period of at least

30 Days

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

It has the highest amount of insurance protection.

Which of the following documents must be provided to the policyowner or applicant during policy replacement? a)Buyer's Guide and Policy Summary b)Policy illustrations c)Notice Regarding Replacement d)Disclosure Authorization Form

Notice Regarding Replacement

All of the following statements about equity index annuities are correct EXCEPT a)They invest on a more aggressive basis aiming for higher returns. b)The annuitant receives a fixed amount of return. c)They have a guaranteed minimum interest rate. d)The interest rate is tied to an index such as the Standard & Poor's 500.

The annuitant receives a fixed amount of return.

An insurance company receives an application with some information missing and issues the policy anyway. What is this called?

Waiver

Which of the following is a feature of a variable annuity? a)Interest rate is guaranteed. b)Securities license is not required. c)Benefit payment amounts are not guaranteed. d)Payments into the annuity are kept in the company's general account.

Benefit payment amounts are not guaranteed.