insurance
under the usa patriot act insurer are required to report receipt of cash payment in excess of
10000
a 15 year mortgage is best protected by
15 year decreasing term
what year was the mccaran Ferguson act enacted
1945
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 accumulate cash value faster than straight life
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?
20000 death benefit
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?
30 pay life
which of following type of policies pays a benefit if the insured goes blind
AD&D
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?
aleatory
what of the following are considered to be a typical characteristic describing the nature of the insurance contract except
bilateral
A policy that becomes a Modified Endowment Contract (MEC)
can lose many of its tax advantages
T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later, provided that T is an acceptable risk. What item is given to T?
conditional receipt
insurance policies offer take it or leave it basis which makes them
contracts of adhesion
which provision allows the policy owner to change the term life policy to a permanent one without providing proof of good health
conversion
which of the following features of a group term life policy enable the individual to leave the group and continue his or her insurance without providing evidence of insurability
conversion privileged
the most important factor to consider when determining when to convert term insurance at the insured attained age or insured original age is
cost
Credit life insurance is typically issued with which of the following types of coverage?
decreasing term
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
decreasing term
a family income policy is a combination of whole life and
decreasing term insurance
Additional coverage can be added to a Whole Life policy by adding a(n)
decreasing term rider
what is the purpose of the usa patriot act
detect and deter terrorism
a variable insurance policy
does not guarantee a return on its investment accounts
K purchased a $10,000 Life Policy that will pay the face amount to her if she lives to age 65, or to her beneficiary if she dies before age 65. K purchased which of the following types of policies?
endowment at age 65
which of these statements is incorrect reguarding the federal income tax treatment of life insurance
entire cash value is taxable
Under a Renewable Term policy, a)the face amount is automatically adjusted at the time of renewal b) evidence of insurability must be provided at each renewal c)the renewal premium is calculated on the basis of the insured's attained age d)a new application must be completed at each renewal
evidence of insurability must be provided at each renewal
the underwriter determines that an applicant risk should be recategorized due to health issue. this policy may be issued with an
exclusion for medical condition
Term insurance has which of the following characteristics?
expires at the end of the policy period
All of these are characteristics of an Adjustable Life policy EXCEPT
face amount can be adjusted using policy dividend
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?
face amount plus the policy cash value
From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?
fair credit reporting act
Which Federal law allows an insurer to obtain an inspection report on a potential insured?
fair credit reporting act
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 and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase?
family maintenance policy
Taking receipt of premiums and holding them for the insurance company is an example of
fiduciary responsibility
What kind of special need would a policyowner require with an Adjustable Life insurance policy?
flexible premium
what action should the producer take if the initial premium is not submitted with the application
forward the application to the insurer with out the initial premium
when must insurable interest exist for a life insurance contract to be valid?
inception of the contract
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
inspection report
a life insurance policy would be considered a wagering contract without
insurable interest
A policy of adhesion can only be modified by whom?
insurance company
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?
insured
Which of these arrangements allows one to bypass insurable interest laws?
investor originated life insurance
a life insurance arrangement which circumvents insurable statues is called
investor originated life insurance
credit life insurance is
issued in an amount not to exceed the amount of the loan
which of the following statements is correct about the period in which term policy can be converted
it varies according to contract
which of the following combination plans is designed to protect and insured from an unpaid mortgage balance upon premature death
joint life
what type of policy covers 2 lives and pays face amount after the first one dies
joint life policy
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?
level
D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?
level term
a whole life insurance policy owner does not wish to continue to make premium payments. Which of the following enable the policy owner to sell the policy for more than its cash value
life settlement contract
the policy owner is allowed to pay premiums more than once a year under which provision
mode of premium
Which type of policy is considered to be overfunded, as stated by IRS guidelines?
modified endowment contract
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for
modified whole life
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
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have
must have insurable interest in the proposed insurer
whole life insurance policies are contractual guaranteed to provide each of the following except
partial withdraw features beyond the surrender charge period
a father who dies within 3 years of purchasing life insurance policy on his infant daughter can have the policy premium
payor provisions
insurance policies are considered aleatory contract
performance is conditioned upon a future occurrence
Who elects the governing body of a mutual insurance company?
policy holder
which does not constitute as a policy delivery
policy is issued a rating
which of these describe a life insurance policy
policy owners are entitled to dividends
characteristic of straight life insurance
premium are payable as long as there is insurance coverage in force
which statement is correct regarding the premium payment scheduled for whole life policies
premium are payable through the insured lifetime/coverage last until death
which of the following actions are not possible with universal life policy
premium may be applied as credit against income tax
which of this is not a type of agent authority
principal
what is the consideration given by an insurer in the consideration clause of a life policy
promise to pay death benefit to a nae of the benefiticiary
Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called
representation
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
request of change will be refused
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a
risk retention group
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT
signed hippa disclosure
What type of life policy covers 2 lives and pays the face amount after the first one dies?
survival
On delivery of a policy, a signed statement of good health is typically requested if
the application is submitted without an application
the common disaster clause provides that both the insured and the beneficiary were to die in a common accident . what is true
the clause provide payments to the insured estates
When applied to Whole Life insurance, the word "straight" denotes
the duration of premium payment
What is the underlying concept regarding level premiums?
the early years are charged more than what is needed
The amount of coverage on a group credit life policy is limited to
the insured total loan value
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
the policy owner
all of these statement about equity index life insurance is true except
the premium can be lowered or raised based on investment performance
the consideration clause of an insurance contract includes
the schedule and amount of premium payments
stranger-owned life insurance (STOLI) is when a person purchase life insurance and sells it to
third party with no insurable interest
How does a typical Variable Life Policy investment account grow?
through mutual funds, stocks and bond
At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid?
time of the application
What type of reinsurance contract involves two companies automatically sharing their risk exposure?
treaty
in an insurance contract, the insurer is the only party who makes legally enforceable promises. what kind of contract is this
unilateral
life and health insurance policies are
unilateral contracts
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
universal life
At what point, must a life insurance must be informed of the fair credit reporting act
upon completion of application
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
life insurance immediately creates an estate upon the death of an insured. which policies guarantee a minimum death payment
variable life
which of the following policies combine investment choices with a form of term coverage
variable universal life
which of the following policies is characterized by a flexible premium and death benefit and allow the policy owner control the investment aspect of the plan
variable universal life
what is considered to be a statement that is assured to be true in every respect
warranty
the whole life insurance policy endows when
Cash value equals the death benefit
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
Decreasing term
E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to?
F
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?
Legal purposes (insurable interest)
what is an element of variable life policy
a fixed level premium
a nonprofit society that does not have capital stock and operates for its sole benefit of its member is known as
a fraternal benefit society
which of the following is true about variable whole life policy
a minimum guaranteed death benefit is provided
Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase?
a whole life policy with an insured rider
how long does the coverage normally remain on a limited pay life policy
age 100
