Kansas Life State Exam Guide

All are true statements regarding the underwriting process, EXCEPT... - Signed consent from the applicant must be provided in order to test for AIDS & HIV virus. - AIDS & HIV virus exams can be conducted in a discriminatory fashion. - the cost of any examination is paid for by the insurer. - The original application is the primary source of information used in the underwriting process.

AIDS & HIV virus exams can be conducted in a discriminatory fashion. Testing for AIDS & HIV virus's must be conducted in a uniform fashion.

All are true statements regarding the underwriting process, EXCEPT... - Signed consent from the applicant must be provided in order to test for AIDS and HIV virus. - AIDS and HIV virus exams can be conducted in a discriminatory fashion. - The cost of any examination is paid for by the insurer. - The original application is the primary source of information used in the underwriting process.

AIDS and HIV virus exams can be conducted in a discriminatory fashion.

Which of the following is NOT a required provision in a group life policy? - Free look. - Incontestable. - Grace Period. - Accidental Death & Dismemberment.

Accidental Death & Dismemberment (AD&D). All other listed provisions are required provisions within a group life policy.

Which of the following is NOT a required provision in a group life policy? - Free look. - Incontestable. - Grace Period. - Accidental Death & Dismemberment.

Accidental Death & Dismemberment (AD&D). All other listed provisions are required.

the option that provides an additional death benefit for a limited amount of time at the lowest possible cost is call a(n)... - Term rider. - Accidental Death and Dismemberment (AD&D) - Family rider. - Annuity.

Accidental Death and Dismemberment (AD&D).

The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n)... - Term rider. - Accidental Death and Dismemberment rider (AD&D). - Family rider. - Annuity.

Accidental Death and Dismemberment (AD&D). An Accidental Death and Dismemberment (AD&D) rider provides and additional death benefit for a limited period of time at the lowest possible cost.

A policyowner may generate taxable income from which of the following Dividend Options? - Nonforfeiture. - Cash. - Accumulation of Interest. - Reduced Premium.

Accumulation of Interest. While policy dividends are not taxable, any interest paid on them is taxable income in the year the interest is credited to the policy.

What is the Suicide provision designed to do? - Decline an applicant who is contemplating suicide. - Safeguard the insurer from an applicant who is contemplating suicide. - Protect the insurer from ever paying a claim that results from suicide. - Allows the insurer the option to pay a death benefit in the event of suicide.

Safeguard the insurer from an applicant who is contemplating suicide. The purpose of a Suicide provision is to protect the insurer against the purchase of a policy in contemplation of suicide.

In a qualified retirement plan, the yearly contributions to an employee's account... - Are not tax deductible. - Are restricted to minimum levels set by the IRS. - Are restricted to maximum levels set by the IRS. - Must be matched dollar for dollar by the employer.

Are restricted to maximum levels set by the IRS.

What action will the insurer take if an interest payment on a policy loan is not made on time? - Cancel the policy if not paid within the grace period. - Automatically add the amount of interest due to the loan balance. - Subtract from any dividends owed. - Disallow any further loans.

Automatically add the amount of interest due to the loan balance. Unpaid interest from a policy loan is added to the loan balance if not paid by the due date.

A pilot applies for Life insurance. The insurer approves the application with a $10 additional monthly premium modification due to the risk involved. The pilot declines the additional premium modification. The insurer will then likely issue the coverage with a(n)... - Aviation Exclusion. - Graded Benefit. - Disability Rider. - Waiver of Premium.

Aviation Exclusion.

Which of these factors does NOT influence an applicant's need for life insurance? - Lifestyle of the applicant. - Number of dependents. - Future educational costs of the dependents. - Self maintenance expenses.

Self maintenance expenses. Otherwise, all other options listed directly influence an applicant's need for life insurance.

Which of the following nonforfeiture options offers the highest death benefit? - Cash surrender. - Reduced Paid Up. - Extended term. - Dividend.

Extended term. Choosing the "Extended term option" allows the policy owner to use the cash value to purchase a term insurance policy with a death benefit equal to that of the original whole life policy.

All of these are characteristics of an Adjustable Life policy EXCEPT... - Adjustable premiums. - Adjustable premium payment period. - Combination of term and whole life insurance. - Face amount can be adjusted using policy dividends.

Face amount can be adjusted using policy dividends. All other options listed are characteristics of an Adjustable Life policy.

Which Federal law allows an insurer to obtain an inspection report on a potential insured? - Medical Information Bureau Act. - Freedom of Information Act. - Fair Credit Reporting Act. - Medical Information Act.

Fair Credit Reporting Act.

An individual, age 50, recently bought an annuity that will pay a guaranteed $2,000 per month at age 70 for life. What type of annuity did the individual purchase? - Fixed Period. - Fixed Deferred. - Fixed Immediate. - Fixed Variable.

Fixed Deferred. A Fixed Deferred annuity pays out a fixed amount for life starting at a future date.

Said individual, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase? - Fixed Period. - Fixed Deferred. - Fixed Immediate. - Fixed Variable.

Fixed Deferred. A Fixed Deferred annuity pays out a fixed amount for life starting at a future date.

The payments on said individual's annuity are no less than $250 quarterly. Which of the following annuities does Q own? - Immediate Fixed. - Quarterly Flexible. - Flexible Installment Deferred. - Adjustable Deferred.

Flexible Installment Deferred.

Which of the following is best described as "an insurance advertisement that tends to make a prospect want to find out more about a specific policy"? - False advertisement. - Inquiry to purchase. - Invitation to purchase. - Institutional advertisement.

Institutional advertisement.

A life insurance policy would be considered a wagering contract WITHOUT... - Insurable interest. - Premium payment. - Agent solicitation. - Constructive delivery.

Insurable interest. Without insurable interest, a life insurance policy would be considered a wagering contract.

Post tax dollar contributions are found in... - 401K investments. - Traditional IRA investments. - SIMPLE investments. - Roth IRA investments.

Roth IRA investments. No income tax deductions can be taken for contributions made to a Roth, but the earnings on those contributions are entirely tax free when they are withdrawn.

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a... - $125,000 individual whole life policy. - $25,000 modified whole life policy. - $25,000 individual term life policy. - $25,000 individual whole life policy.

$25,000 Individual whole life policy.

An unintentional violation of Kansas insurance law could lead a producer to a fine of up to how much money per violation? - $500 - $750 - $1,000 - $1,250

$500 per violation. Any person who violates the insurance laws of Kansas without knowledge or intent may be punished for each violation by a penalty of not more than $500. Willful violations may result in a fine up to $1,000 per violation.

An individual working part time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible contribution allowable. - No deduction allowed. - $6,000 - $5,000 - $4,000

$6,000

What percentage of personal life insurance premiums is usually deductible for federal income tax purposes? - 100% - 75% - 50% - 0%

0% Personal life insurance premiums in general are NOT deductible for federal income tax purposes.

Which of the following types of Term Life policies most likely contains a Renewability feature? - Increasing Term. - 10 Year Convertible Term. - Decreasing Term. - Variable Term.

10 Year Convertible Term. This includes a Renewability provision.

A life insurance policyowner has how many days to return the policy and receive a full premium refund? - 5 days. - 10 days. - 15 days. - 30 days.

10 days. The policyowner has 10 days upon policy delivery to return a Life Insurance Policy and receive a full refund on premiums.

All of the following statements about traditional individual retirement accounts are false EXCEPT... - 10% penalty is applied to withdrawals after age 59 1/2. - Withdrawals are normally tax free to the recipient. - 10% penalty is applied to withdrawals before age 59 1/2. - Contributions are not tax deductible.

10% penalty is applied to withdrawals before age 59 1/2. Because an IRA is a qualified plan, it has the same rules for early withdrawal.

What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan? - 25 - 50 - 100 - 200

100 employees maximum. An employer can have a maximum of 100 employees earning at least $5,000 to be eligible for a SIMPLE retirement plan.

What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan? - 25 - 50 - 100 - 250

100 maximum employees.

A non-contributory plan requires what percentage of participation with all eligible employees? - 100% - 75% - 50% - 25%

100%

How many hours of continuation education must a producer complete biennially? - 12 - 18 - 24 - 36

12 hours biennially. Including 1 hour of ethics, required every 2 years.

An individual participant personally received eligible rollover funds from a profit sharing plan. What is the income tax withholding requirements for this transaction? - 10% is withheld for income taxes. - 20% is withheld for income taxes. - 30% is withheld for income taxes. - Nothing is withheld.

20% is withheld for income taxes. A plan sponsor must withhold 20% of the distribution in federal taxes on a rollover. Once the rollover takes place to a new custodian, the remainder of the distribution is made.

The USA Patriot Act was enacted in... - 2001 - 2002 - 2003 - 2004

2001 Enacted to detect and deter terrorism.

What's the minimum grace period for an individual life insurance policy issued in Kansas? - 10 days. - 15 days. - 30 days. - 31 days.

30 days minimum. An individual life insurance policy issued in Kansas MUST have a grace period for premium payment of 30 days.

A producer must notify the Commissioner of change in address within how many days? - 7 - 14 - 30 - 60

30 days. Whether it is a personal or business address you must notify the Commissioner.

The insured individual is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to file for Social Security disability benefits? - 3 - 4 - 5 - 6

5 months. Must be totally disabled for 5 months before qualifying for Social Security disability benefits.

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan? - 30% - 40% - 50% - 60%

50% Distributions must be made by April 1 following the year the participant turns age 70 1/2 or a 50% excise tax will be assessed on the amount that should have been withdrawn.

Three law partners form a Cross Purchase Buy and Sell agreement. This agreement is funded with individual life insurance. How many total life policies are needed for this agreement? - 12 - 6 - 3 - 1

6. Each partner owns, is the beneficiary of and pays the premiums for life insurance on the other partners equal to his or her share of the purchase price.

A life policy loan in Kansas cannot charge a fixed rate of interest higher than what percentage? - 6% - 8% - 10% - 12%

8%

A life policy loan in Kansas cannot charge a fixed rate of interest higher than... - 6% - 8% - 10% - 12%

8% The maximum fixed interest rate permitted on a life policy loan is 8%.

An individual owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of... - Additional Term Life coverage at any time. - Additional Term Life coverage at specified times. - Additional Whole Life coverage at any time. - Additional Whole Life coverage at specified times.

Additional Whole Life coverage at specified times. A guaranteed insurability option in a Whole Life Policy permits the policyowner to purchase, without evidence of insurability, stated amounts of Whole Life insurance at specified times.

A contract where one party either accepts or rejects the terms of a contract written by another party is call a contract of... - Adherence. - Assimilation. - Aleatory. - Adhesion.

Adhesion. A contract of adhesion is a contract offered intact to one party by another under circumstances requiring the second party to accept or reject the contract in total without having the opportunity to bargain over the wording. Insurance policies are contracts of adhesion and, as such, are construed strictly against the party writing them. (i.e. the insurer)

Which of the following statements is CORRECT regarding the tax treatment of a lump sum payment paid to a life insurance policy's primary beneficiary? - The proceeds which exceed the amount paid in premiums are taxable. - The proceeds are taxable only if the beneficiary's tax bracket has changed from the payout. - All proceeds are considered taxable income in the year they are received. - All proceeds are income tax free in the year they are received.

All proceeds are income tax free in the year they are received. If a life insurance policy has a stated beneficiary, all the proceeds are income tax free in the year which they are received.

A qualified profit sharing plan is designed to... - Allow key employees to participate in the profits of the company. - Allow employees to participate in the profits of the company. - Keep key employees from leaving the company. - Allow employees to elect company officers.

Allow employees to participate in the profits of the company.

The amount of monthly disability benefits payable under Social Security is affected by which of the following factors? - Insured's tax bracket. - Amount of benefits available from other sources. - Nature of the disability. - Insured's education level.

Amount of benefits available from other sources. The amount of the benefits available from other sources affects the amount of monthly disability benefits payable under Social Security.

A forty year old individual would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy? - A straight life deferred annuity. - A straight life annuity. - An immediate annuity. - A deferred annuity.

An immediate annuity. An immediate annuity is designed to make its first benefit payment to the annuitant at one payment interval from the date of purchase.

Which premium schedule results in the lowest cost to the policyowner? - Semi annual. - Monthly. - Quarterly. - Annual.

Annual. If the policyowner chooses to pay the premium more than once per year (example: monthly, quarterly, semi annually) there normally will be an additional charge because the company will have additional charges in billing and collecting the premium payments.

Group life insurance policies are generally written as... - A term rider. - An annually renewable term. - Increasing term. - Group whole life.

Annually renewable term. Group life insurance policies are generally written as annually renewable term insurance.

When a policyowner cash surrenders a Universal Life policy in it's early years, this may be considered a red flag for a(n)... - Federal Fair Credit Act Violation. - Title 18 Fraud violation. - Anti Money Laundering violation. - Unfair Trade Practice violation.

Anti Money Laundering violation.

When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n)... - Federal Fair Credit Act Violation. - Title 18 Fraud violation. - Anti-Money Laundering violation. - Unfair Trade Practice violation.

Anti-Money Laundering violation.

Under a Graded Premium policy, the premiums... - Are higher during the policy's early years. - Are lower during the policy's early years. - Are constant throughout the length of the policy. - Can be adjusted by the insured.

Are lower during the policy's early years. A Graded Premium life policy provides for annual increases in premiums for a constant face amount of insurance during a defined preliminary period, with the purpose of making initial payments more affordable. The premium increases each year during the early years of the contract (usually five years) and remains the same after that time.

Said individual died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by the individual during the application process. Which of these actions will the insurer take? - Beneficiary will be denied the claim. - Beneficiary will be denied the claim and refunded all paid premiums. - Beneficiary will be paid the Death Benefit. - Beneficiary will be paid a partial Death Benefit.

Beneficiary will be paid the Death Benefit. The incontestable clause prevents the insurer from cancelling the contract even for a material misrepresentation.

Which statement about a whole life policy is true? - Beneficiary may be changed only with the consent of the premium payor. - Death benefit can usually be adjusted. - Cash value may be borrowed against. - Premiums are flexible.

Cash value may be borrowed against.

Under an Interest Sensitive Whole Life policy... - Premiums are determined by the policyowner. - No cash value ever accrues. - The policy normally renews every 10 years. - Cash values are determined by interest rates.

Cash values are determined by interest rates. Under an Interest Sensitive Whole Life policy, the cash value accrues according to market value, except in the case of some companies which offer a guaranteed interest rate independent of markets.

Said company offers a group Term Life insurance plan to its employees. What does each employee covered under this plan receive? - Master policy. - Receipt of coverage. - Individual policy. - Certificate of insurance.

Certificate of insurance. Employees covered by an employer sponsored group Term Life plan all receive a certificate of insurance.

A company that owns a life insurance policy on one of its key employees may do all of the following EXCEPT... - Borrow against cash value. - Change beneficiary. - Cancel policy. - Change the policy's interest rate.

Change the policy's interest rate. A company in charge of a key employee life insurance policy has the capability of all other answers listed.

Which rider provides coverage for a child under a parent's life insurance policy? - Spouse term rider. - Base insured rider. - Payor benefit rider. - Child term rider.

Child term rider. One of the best methods of adding coverage for a child on a parent's life insurance policy is to add a child term rider.

Said individual is covered by a whole life policy. Which insurance product can cover the individual's children? - Assignment provision. - Payor benefit. - Accelerated benefit rider. - Child term rider.

Child term rider. The means of providing life insurance on the children of a person who is covered by a life insurance policy is by a child term rider.

What type of employee welfare plans are not subject to ERISA regulations? - Church plans. - Major medical plans. - Corporate. - Qualified plans.

Church plans. Exempt from ERISA regulations.

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period? - Claims are denied under the Suicide clause of the policy. - Company pays twice the face amount under the double indemnity clause. - Claims are paid in full. - Premiums are returned under the Consideration clause.

Claims are denied under the Suicide clause of the policy. Contestability allows your provider to review your application for intentional errors after a death claim, this period lasts for only 2 years.

On August 6, an individual submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, the individual went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and the individual explains what had recently taken place with the doctor. What action should the producer then take? - Collect initial premium. - Collect initial premium along with a signed health statement. - Explain to the applicant the policy is no longer in effect due to change in health conditions. - Collect initial premium and leave a binding receipt.

Collect initial premium along with a signed health statement.

Which of the following is not a valid reason for the Commissioner to revoke a producer's license? - Producer intentionally misrepresented the provisions on an insurance policy. - Producer was convicted of a felony. - Producer maliciously discredited the financial condition of an insurer. - Producer is insolvent.

Commissioner cannot revoke because producer is insolvent.

An individual owns a whole life policy that was purchased 10 years ago. If the premium payments suddenly stop and the individual takes no additional action, which Nonforfeiture Option will the insurer most likely proceed with? - Extended term. - Loan Provision. - Reduced Paid up. - Cash Surrender.

Extended Term. Choosing the nonforfeiture extended term option allows the policyowner to use the cash value to purchase a term insurance policy with a death benefit equal to that of the original whole-life policy. Extended-term insurance is often the default nonforfeiture option in the event of nonpayment of premiums.

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? - Have the customer sign a blank application, then take the application back to his office to complete prior to sending it off the the insurance company. - Complete the application over the phone with the customer, sign the application for the customer, then send the application off to the insurance company. - Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company. - Have the customer fill out the application and send it to his office for him to sign, then send it off to the insurance company.

Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company.

Which of the following is a requirement for a producer's license renewal? - Retesting. - College credits. - Keeping a minimum sales quota. - Completing the required continuing education.

Completing the required continuing education. A producer license is renewed by paying a renewal fee and completing continuing education every 2 years.

An individual 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. Assuming the individual is an acceptable risk, what item is given to them? - Binding receipt. - Conditional receipt. - Warranty receipt. - Backdated receipt.

Conditional receipt. A conditional receipt binds the insurer to coverage as of the date of the application or medical exam, provided the proposed insured is determined to be an acceptable risk.

An individual 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. Assuming that T is an acceptable risk, what item is given to T? - Binding receipt. - Conditional receipt. - Warranty receipt. - Backdated receipt.

Conditional receipt. A conditional receipt binds the insurer to coverage as of the date the application or medical exam, provided the proposed insured is determined to be an acceptable risk.

An individual is given a receipt after completing a life insurance application and paying the initial premium. Under this situation, the individual's coverage is... - Guaranteed, no matter what is found during the underwriting process. - Effective upon completion of the Free Look period. - Conditional, depending on the insurer's underwriting guidelines. - Effective upon delivery of the policy.

Conditional, depending on the insurer's underwriting guidelines.

The incontestable clause allows an insurer to... - Disallow a change of ownership through the Contestable period. - Disallow a change of beneficiary during the Contestable period. - Contest a claim at anytime if the cause of death was accidental. - Contest a claim during the Contestable period.

Contest a claim during the Contestable period. The incontestable clause or provision specifies that after a certain period of time (usually two years from the issue date), the insurer no longer has the right to contest the validity of the life insurance policy so long as the contract continues in force.

If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? - Noneligible. - Noncontributory. - Eligible. - Contributory.

Contributory.

A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, expense charges, and the... - Inherent risk. - Commission rate. - Inflation factor. - Cost of insurance.

Cost of insurance. The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the cost of insurance.

Which statement regarding the Misstatement of Age provision is considered to be true? - Coverage will be adjusted to reflect the insured's true age if a misstatement of a age is discovered. - Requires that a new policy must be applied for if a misstatement of age is found on the current policy. - Misstatement of Age provision is valid only during the contestable period. - Insurer may void the policy if a misstatement of age is discovered.

Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered.

Kansas 10 day free look period for life insurance policies begins at the... - Date of delivery. - Date of approval. - Date of application. - Date of physical examination.

Date of delivery.

Credit life insurance is typically issued with which of the following types of coverage? - Annual Renewable Term. - Decreasing Term. - Individual Whole Life. - Group Term.

Decreasing Term. The type of insurance used for Credit life is typically decreasing term, with the term matched to the length of the loan period.

Credit life insurance is typically issued with which of the following types of coverage? - Annual Renewable Term. - Decreasing Term. - Individual Whole Life. - Group Term.

Decreasing Term. Typically Decreasing Term is used for credit life insurance, with the term matched to the length of the loan period.

An individual needs life insurance that provides coverage for only a limited amount of time with a death benefit that charges regularly according to a schedule. What kind of policy is needed? - Level term policy. - Whole the policy. - Limited pay policy. - Decreasing term policy.

Decreasing term policy. A life insurance policy written for a specified period of time with a death benefit that changes regularly according to a schedule is a decreasing term policy.

How are surrender charges deducted in a life policy with a rear-end loaded provision? - Deducted from the death benefit. - Deducted when the policy is discontinued. - Deducted from policy's cash value. - Deducted when assigned to another policyowner.

Deducted when the policy is discontinued.

A producer who makes a false statement intended to malign another insurance company is committing the illegal act of... - Defamation. - Coercion. - Subrogation. - Intimidation.

Defamation.

What document being signed allows the free look period to begin? - Buyer's Summary. - Delivery receipt. - Policy Guide. - Binding receipt.

Delivery receipt. The policy delivery receipt starts the Free Look period.

An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee? - Distribution is subject to capital gains tax. - Distribution is subject to ordinary income tax. - Distribution is subject to a tax penalty. - Distribution is subject to federal income tax withholding.

Distribution is subject to federal income tax withholding. A participant must complete a rollover to another qualified plan within 60 days or the distribution is considered a nonqualified distribution and is subject to taxes and penalties. A plan sponsor must withhold 20% of the distribution for federal taxes on a rollover. Once the rollover takes place to the new custodian, the remainder of the distribution is released.

A variable insurance policy... - Guarantees a minimum rate of return. - Does not allow the policyowner to assume the investment risk. - Does not guarantee a return on its investment accounts. - Does not guarantee an assignment provision.

Does not guarantee a return on its investment accounts. In contrast, variable insurance products do not guarantee contract cash values, and it is the policyowner who assumes the investment risk. Variable life insurance contracts do not make any promises as to either interest rates or minimum cash values.

Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy Sell Agreement, which of the following is TRUE? - Each partner owns a $1,000,000 policy on their own life. - Each partner owns a $1,000,000 policy on their partner's life. - Each partner owns a $500,000 policy on their own life. - Each partner owns a $500,000 policy on their partner's life.

Each partner owns a $500,000 policy on their partner's life. The amount of the policy is equivalent to each partner's share of the business. When one partner dies, the other partner receives the death benefit from the life insurance policy of the deceased partner, which is then used to buy the deceased partner's ownership of the business.

Under a trustee group life policy who would be eligible for a certificate of coverage? - Corporation. - Employee. - Employer. - Labor union.

Employee.

Under a trustee group life policy, who would be eligible for a certificate of coverage? - Corporation. - Employee. - Employer. - Labor union.

Employee.

Said individual owns a $25,000 Life Policy that pays the face amount to them if they live to age 70, or to their beneficiary if they die before age 70. What kind of policy does the individual have? - Straight Life. - Modified Life.. - Whole Life Paid-Up at Age 70. - Endowment at Age 70.

Endowment at Age 70. An endowment policy is characterized by cash values that grow at a rapid pace so that the policy matures or endows at a specified date (before age 100).

The insured owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does the insured own? - Endowment at age 70. - Whole Life Paid-Up at Age 70. - Modified Life. - Straight Life.

Endowment at age 70. An endowment policy is characterized by cash values that grow at a rapid pace so that the policy matures or endows at a specified date (before age 100).

Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? - Policy Exclusion. - Incontestable. - Entire Contract Provision. - Assignment.

Entire Contract Provision. The entire contract provision, found at the beginning of the policy, states that the policy document, the application (which is attached to the policy), and any attached riders constitute the entire contract. Nothing may be "incorporated by reference," meaning that the policy cannot refer to any outside documents as being part of the contract.

What provision in a life insurance policy states that the application is considered part of the contract? - Application provision. - Policy Exclusions provision. - Entire Contract provision. - Incontestability provision.

Entire Contract provision. The Entire Contract provision, found at the beginning of the policy, states that the policy document, the application (which is attached to the policy), and any attached riders constitute the entire contract.

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance? - Premiums are normally not tax deductible. - Cash dividends are normally not taxed. - Entire cash surrender value is taxable. - Proceeds are received tax free if there is a named beneficiary.

Entire cash surrender value is taxable. The entire cash surrender value is NOT taxable. The interest gained is taxable.

An insured is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would the insured be advised to purchase? - Equity index insurance. - Endowment. - Graded whole life policy. - Return of premium policy.

Equity index insurance.

How often must an insurance producer's license in Kansas be renewed? - Every year. - Every two years. - Every three years. - Every five years.

Every 2 years. Producers must complete 12 hours of continuing education every 2 years to keep their license active. 1 of those hours must be in ethics.

How often must the Commissioner examine each domestic insurance company? - Every year. - Every 2 years. - Every 3 years. - Every 5 years.

Every 5 years. The Commissioner must examine each domestic insurance company at least every 5 years.

Which of these statements about a Guaranteed Insurability Option rider is NOT true? - Coverage can be added at specific events such as marriage or having a child. - Evidence of insurability is not required when the option is exercised. - Evidence of insurability is required when the option is exercised. - Coverage can be added at specific ages.

Evidence of insurability is required when the option is exercised. All other listed options are true.

Which of the following is NOT a required provision in an individual life policy? - Grace Period. - Free look. - Extended Term. - Misstatement of Age.

Extended Term. All other listed provisions must be included in life insurance policies.

What action should a producer take if the initial premium is NOT submitted with the application? - Keep the application until the premium is paid. - Forward the application to the insurer after giving the applicant a binding receipt. - Forward the application to the insurer without the initial premium. - Forward the application to the insurer after giving the applicant a conditional receipt.

Forward the application to the insurer without the initial receipt. Without the initial premium submitted alongside the application (to the insurance company), the policy will not become valid until the initial premium is collected.

An individual completes an application for life insurance but does not pay the initial premium. All of these actions must occur before the individual's policy goes into effect, EXCEPT... - Policy is delivered. - Free Look period has expired. - Insurance company issues policy. - Initial premium is collected.

Free Look period expiring.

An insured is past due on his life insurance premium, but is still within the grace period. What will the beneficiary receive if the insured dies during this Grace Period? - Refund of all premiums paid, plus interest. - Refund of all premiums paid. - Full face amount minus any past due premiums. - Full face amount.

Full face amount mins any past due premiums.

The purpose of the *INSERT ANSWER* Period Clause is to avoid an unintentional lapse of a life insurance policy. - Grace. - Incontestable. - Conversion. - Reinstatement.

Grace Period Clause.

Which requirement must be met for an association to be eligible for a group life plan? - Group was formed for a purpose other than acquiring insurance. - Group must establish a president. - Group must have at least 10 members. - Group was formed for the purpose of acquiring insurance.

Group was formed for a purpose other than acquiring insurance. Group life insurance can be formed just as long as they are formed for a reason other than to purchase insurance.

A Nonforfeiture clause gives the policyowner... - Lifetime Income - Unemployment benefits. - Cost of living allowances. - Guaranteed values even if the policy has lapsed.

Guaranteed values even if the policy has lapsed. A nonforfeiture clause stipulates that a policyowner can receive full or partial benefits or a partial refund of premiums after a lapse due to non payment.

A Nonforfeiture clause gives the policyowner... - Lifetime income. - Guaranteed values even if the policy has lapsed. - Unemployment benefits. - Cost of living allowances.

Guaranteed values even if the policy has lapsed. A nonforfeiture clause stipulates that a policyowner can receive full or partial benefits or a partial refund of premiums after a lapse due to non-payment.

Which of these is NOT a reason for purchasing life insurance on the life of a minor? - If both parents were to die, it would provide death benefits to the child. - Provides funds for final expenses if the child were to die. - Provides living benefits for the child's college education. - Provides child with insurance now, in case the child becomes uninsurable later.

If both parents were to die, it would provide death benefits to the child. An insurance policy on a child would not pay any benefits if one or both of the parents died. All of the other answers are valid reasons for buying life insurance on a child.

Said individual has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted? - 20% of the funds are subject to taxes. - 80% of the funds are invested in a separate account. - If the individuals employment is terminated, 20% of the funds would be forfeited. - If the individuals employment is terminated, 80% of the funds would be forfeited.

If the individuals employment is terminated, 20% of the funds would be forfeited.

Said individual is a 39 year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices, EXCEPT a(n)... - Flexible Premium Deferred annuity. - Variable annuity. - Immediate annuity. - Straight Life annuity.

Immediate annuity. Immediate annuities start providing income payments usually starting within 30 days from the purchase date.

A long term care rider in a life insurance policy pays a daily benefit in the event of which of the following? - Critical illness. - Terminal illness. - Inability of the insured to perform more than 2 Activities of Daily Living (ADL's). - Inability of the insured to maintain insurance premiums due to unemployment.

Inability of the insured to perform more than 2 Activities of Daily Living (ADL's).

An individual, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide? - Income for a fixed period started in the contract. - Income that cannot be outlived by the owner. - Inflation protection. - Tax free income.

Income that cannot be outlived by the owner.

Said individual's whole life insurance policy lapsed two months ago due to nonpayment. The individual would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT... - Individual must reinstate within a stated period. - Individual must pay back interest and premiums. - Individual will forfeit the right to use the automatic loan provision upon reinstatement. - Individual must provide evidence of insurability.

Individual will forfeit the right to use the automatic loan provision upon reinstatement. All other listed options are correct concerning reinstatement.

Which of these actions should a producer take when submitting an insurance application to an insurer? - Issue a binding receipt to applicant if no initial premium is submitted. - Disclose to the applicant the amount of commissions to be earned on this transaction. - Inform insurer of relevant information not included on the application. - Arrange for a copy of the Attending Physician Statement (APS) to be sent to the producer.

Inform insurer of relevant information not included on the application.

An individual is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is call a(n)... - Installment Refund annuity. - Joint Refund annuity. - Straight Refund annuity. - Equal Value annuity.

Installment Refund annuity. An Installment Refund annuity promises that if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid.

All of these statements about the Waiver of Premium provision are correct, EXCEPT... - A waiting period must pass before becoming eligible for benefits. - Waiver of Premium is available on both permanent and term insurance policies. - Insured must be eligible for Social Security disability for claim to be accepted. - Insured must be totally disabled to qualify.

Insured must be eligible for Social Security disability for claim to be accepted. Receiving Social Security disability benefits is not a requirement to be eligible for the Waiver of Premium.

In a Key Employee life insurance policy, the third party owner can be all of the following, EXCEPT... - Applicant. - Owner. - Payor. - Insured.

Insured.

In a Life insurance contract, an insurance company's promise to pay stated benefits is called the... - Insuring clause. - Consideration clause. - Entire Contract. - Owner's rights.

Insuring clause. The insuring clause in a Life insurance contract establishes the basic promise of the insurance company.

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT... - Fixed Period. - Interest Only. - Fixed Amount. - Life Income.

Interest Only. The Interest Only option does NOT involve systematic liquidation of the death proceeds.

How are2 policyowner dividends treated in regards to income tax? - Dividends are not taxable. - Interest on accumulations is taxed. - Taxed as ordinary income. - Taxed as capital gains.

Interest on accumulations is taxed. If the dividends exceed the total premium payments for the insurance policy, the excess dividends are considered taxable income.

A license may be denied, suspended, or revoked if the licensee... - Engages in replacement of an existing policy. - Is found guilty of misrepresentation in obtaining the license. - Files for bankruptcy. - Does not meet a sales quota.

Is found guilty of misrepresentation in obtaining the license.

Which statement regarding third party ownership of a life insurance policy is true? - Beneficiary is required to be irrevocable. - Policy cannot be assigned once issued. - It is illegal in most states. - It is used extensively in estate planning as well as business circumstances.

It is used extensively in estate planning as well as business circumstances. Third party ownership of a life insurance policy is widely used in business settings and estate planning situations.

What type of life policy covers two lives and pays the face amount after the first one dies? - Group Life. - Joint Life Policy. - Family Income Policy. - Last Survivor Policy.

Joint Life Policy.

An individual is looking to purchase renewable Term insurance. Which of these types of Term insurance may be renewable? - Increasing. - Decreasing. - Adjustable. - Level.

Level Term Insurance. A level term policy pays the same benefit amount if death occurs at any point during the term. Level term policies may be renewable.

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - Interest Only. - Fixed Period. - Fixed Amount. - Life Income.

Life Income. The Life Income settlement option pays a specified amount to the annuitant with no residual value payable to a beneficiary.

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - Interest Only. - Fixed Period. - Fixed Amount. - Life Income.

Life Income. The Life Income settlement option pays a specified amount to the annuitant with no residual value to the beneficiary.

Said individual recently died and left behind an Individual IRA account in their name. Their widow was forwarded the balance of the IRA. The widow qualifies for the... - Marital deduction. - Death benefits. - Section 1035 exchange. - Capital gains tax rate.

Marital deduction. The transfer of a decedent's IRA account balance to a surviving spouse qualifies for the Unlimited Marital Deduction, which generally exempts the transfer from estate taxes.

Which of these factors do NOT play a role in the underwriting of a insurance policy? - Avocations. - Credit status. - Marital status. - Occupation.

Marital status does not affect the underwriting procedure.

An individual 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? - Variable Life. - Adjustable Life. - Graded Premium Whole Life. - Modified Whole Life.

Modified Whole Life.

Which of the following is TRUE about a qualified retirement that is "top heavy"? - More than 30% of plan assets are in key employee accounts. - More than 40% of annual additions are for key employee accounts. - More than 50% of plan assets are in key employee accounts. - More than 60% of plan assets are in key employee accounts.

More than 60% of plan assets are in key employee accounts. A plan is considered to be top heavy if more than 60% of plan assets are attributable to "key employees" as of the last day of the prior plan year.

When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld? - %10 - %20 - %30 - None.

None. There is no tax withheld on an IRA transfer.

Which statement is true regarding a minor beneficiary? - Normally, the death proceeds are required to be held in that until the beneficiary reaches the age of 21. - Normally, a guardian is required to be appointed in the Beneficiary clause of the contract. - The minor must pay the debts of the insured's estate before receiving any of the proceeds. - The minor is entitled to receive the death proceeds immediately.

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract. In most cases, insurers require that a guardian be appointed in the Beneficiary clause of the policy or that a guardian be designated in the will.

In an individual retirement account (IRA), rollover contributions are... - Subject to capital gains tax. - Subject to ordinary income tax. - Partially limited by dollar amount. - Not limited by dollar amount.

Not limited by dollar amount.

All of these statements concerning Settlement Options are true, EXCEPT... - Increased proceeds can be provided through accumulation of interest. - Rapid depletion of proceeds can be avoided. - Proceeds can be administered by the insurance company. - Only the beneficiary may select.

Only the beneficiary may select the settlement option. "Settlement options may be selected by the policyowner"

Which statement is TRUE in regards to a policy loan? - Past due interest payments not paid after 3 months will void the policy. - Past due interest on a policy loan is added to the total debt. - Insurance companies can send delinquent interest accounts to a collection agency. - Insurance companies can change an interest rate based on the policyowner's credit report.

Past due interest on a policy loan is added to the total debt. Interest on a loan which is not paid when due is added to the total debt.

All of the following statements are true regarding a policy's Grace period, EXCEPT... - Past due premiums are waived. - Policy loans may still be made. - Full coverage continues. - Grace period terms are stated in the policy.

Past due premiums are waived. All other statements regarding the policy's Grace period are true.

All of the following statements are true regarding a policy's Grace period, EXCEPT... - Past due premiums are waived. - Policy loans may still be made. - Full coverage continues. - Grace period terms are stated in the policy.

Past due premiums are waived. Past due premiums are NOT waived throughout a policy's Grace period, all other options are true regarding a policy's Grace period.

An individual had an annual life insurance premium payment due January 1. This individual died January 10 without making the premium payment. What action will the insurer take? - Collect the premium from M's estate. - Deny the claim. - Pay face amount minus the past due premiums. - Subtract past due premium from cash value.

Pay face amount minus the past due premiums. Because the death occurred within the grace period the insurer would pay the death benefit less the past due premium.

An individual recently died and was insured with a life insurance policy for over five years. During the claims process, the insurer discovered that B had understated his age by 5 years at the time of application. In this situation, the insurer will... - Pay the amount of premiums paid plus interest. - Pay the amount that the premium would have purchased at the correct age. - Pay half of the face amount. - Pay the full face amount.

Pay the amount that the premium would have purchased at the correct age. The Misstatement of Age provision states an adjustment be made in the amount of insurance if the age of the insured is misstated.

Which life insurance rider typically appears on a Juvenile life insurance policy? - Decreasing term rider. - Inflation rider. - Payor Benefit rider. - Waiver of Premium rider.

Payor Benefit rider. A payor benefit rider provides for waiver of premium if the adult payor of the policy dies or becomes totally disabled.

Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? - Family Maintenance clause. - Payor clause. - Assignment provision. - Automatic Premium Loan provision.

Payor clause. A payor clause ensures that premiums will be waived for a Juvenile Life policy if the policyowner becomes disabled.

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? - Payor provision. - Accelerated Benefits provision. - Assignment provision. - Waiver of Premium provision.

Payor provision. A payor provision provides that in the event of death or disability of the adult premium payor, the premiums on a juvenile policy will be waived until the insured child reaches a specified age or the maturity date of the contract.

Insurance policies are considered aleatory contracts because... - They are "take it or leave it" contracts. - Both parties consent to the contract. - Performance is conditioned upon a future occurrence. - The contract is voidable upon proof of fraud.

Performance is conditioned upon a future occurrence. This means there is an element of chance an potential for unequal exchange of value or consideration for both parties. An aleatory contract is conditioned upon the occurrence of an event.

A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the... - Policy Loan provision. - Automatic Premium Loan provision. - Accelerated Benefits provision. - Consideration clause.

Policy Loan provision. A policy loan will pay the policyowner an amount that, with interest, does NOT exceed the guaranteed cash value.

Which of these do NOT constitute policy delivery? - Policy mailed to applicant. - Policy mailed to agent. - Policy delivered to the applicant by the agent. - Policy issued with a rating.

Policy issued with a rating.

Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? - Geographical location. - Source of income. - Risk classification. - Marital status.

Risk classification.

An individual applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. The individual is dissatisfied and returns the policy February 13. How will the insurer handle this situation? - Premium will be fully refunded minus a surrender charge. - Policy was not returned within the free look period, premium will not be refunded. - Policy was returned within the free look period, premium will be fully refunded. - Premium will be fully refunded minus a prorated amount for the period of February 7 - February 13.

Policy was returned within the free look period, premium will not be refunded. The free look period begins when the policy is delivered to policyowner.

Which is true concerning a Variable Universal Life policy? - Policyowner controls where the investment will go and selects the amount of the premium payment. - Policyowner has no say where the investment will go but can choose the premium mode. - The investment vehicle for this type of policy is held in the insurer's general portfolio. - The death benefit can vary but the policyowner has no say in the premium amount paid.

Policyowner controls where the investment will go and selects the amount of the premium payment. With Variable Universal Life, the policyowner controls the investment of cash values and chooses the timing and amount of premium payments.

A policyowner is able to choose the frequency of premium payments through what policy feature? - Consideration. - Payor benefit. - Premium Mode. - Assignment provision.

Premium Mode. This feature allows a policyowner to select the timing of premium payment, such as monthly, quarterly, annually etc.

Which of these characteristics is consistent with a Straight Life policy? - Owner can adjust both premium and death benefit. - Premiums are lower for the first five years, increase the sixth year, then levels off for the remaining length of the contract. - Owner has the option of converting to term insurance. - Premiums are payable for as long as there is insurance coverage in force.

Premiums are payable for as long as there is coverage in force. Straight life policies provide permanent level protection with level premiums from the time the policy is issued until the insured's death (or age 100).

Which of the following actions is NOT possible with a Universal Life policy? - Policy's cash value may be used to pay premiums. - Premium payments may be made at unscheduled times. - Premiums may be applied as a credit against income tax. - Face amount may be adjusted.

Premiums may be applied as a credit against income tax. All other listed actions are possible with a Universal Life policy.

Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine... - Driving history. - Probability of making timely premium payments. - If applicant is a tobacco user. - Overall health of the applicant.

Probability of making timely premium payments. The purpose of these reports is to provide a picture of an applicant's general character and reputation, mode of living, finances, and any exposure to abnormal hazards.

The insured and sole beneficiary are involved in a fatal accident together where the insured dies before their beneficiary, under the Common Disaster provision, which of these statements is true? - Proceeds will be paid to beneficiary's estate. - Proceeds will be divided equally between both insured and beneficiary's estates. - Proceeds will be payable to the insured's estate if their beneficiary dies within a specified time. - The courts will decide who will receive death benefits.

Proceeds will be payable to the insured's estate if their beneficiary dies within a specified time, under the Common Disaster provision.

Which of the following is NOT a valid reason for the Insurance Commissioner to revoke a producer's license? - Producer intentionally misrepresented the provisions on an insurance contract. - Producer was convicted of a felony. - Producer maliciously discredited the financial condition of an insurer. - Producer is insolvent.

Producer is insolvent. All other options are valid reasons to have your license revoked.

Which of the following is NOT a valid reason for the Commissioner of Insurance to suspend or revoke a producer's license? - Producer returns part of a commission to a client in exchange for a sale. - Producer represents more than one insurance company. - Producer engages in false advertising. - Producer commingles premiums collected with a personal account.

Producer represents more than one insurance company. All other options are valid reasons for the Commissioner of Insurance to suspend or revoke a producer's license.

What is the consideration given by an insurer in the Consideration clause of a life policy? - Promise to never cancel coverage. - Promise to pay a death benefit to a named beneficiary. - Promise to not raise premiums. - Promise to accept an insured's assignment of benefits.

Promise to pay a death benefit to a named beneficiary. Consideration is given by the insurer by promising to pay a death benefit to a named beneficiary.

All of these are considered sources of underwriting information about an applicant, EXCEPT... - Inspection Report. - Credit Report. - Rating Services. - Medical Information Bureau.

Rating Services. The Rating Services have to do with A.M. Best, Standard & Poor's.

Which of the following is an example of a nonforfeiture option? - Conversion option. - Reduced Paid up option. - Inflation option. - Guaranteed insurability option.

Reduced Paid up option. This is an example of a nonforfeiture option.

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called... - Reinstatement. - Grace period. - Automatic premium loan. - Waiver of premium.

Reinstatement provision. In cases where a policyowner wishes to reinstate a lapsed policy, the reinstatement provision allows the policyowner to do so with some limitations.

An insured has purchased a $10,000 Whole life policy in 2003 and pays an annual premium of $100, the insured dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did the insured include on the policy? - Accelerated death benefit rider. - Return of premium rider. - Family Income rider. - Term rider.

Return of premium rider.

Said individual is a producer who notices 5 questions on a life application were not answered. What actions should the individual take? - Mail incomplete application to applicant to be completed and returned to the agent. - Submit the application as-is to the insurer. - Call the applicant and complete application over the phone. - Set up a meeting with the applicant to answer the remaining questions.

Set up a meeting with the applicant to answer the remaining questions.

Typically a life insurance death benefit is paid by a lump sum payment. A(n) *INSERT ANSWER* option is a method of distributing a Life Insurance policy's death benefit OTHER than a lump sum payment. - Settlement. - Dividend. - Conversion. - Aleatory.

Settlement option.

Typically a life insurance death benefit is paid by a lump-sum payment. A(n) __________ option is a method of distributing a Life Insurance policy's death benefit OTHER than by a lump sum payment. - Settlement. - Dividend. - Conversion. - Aleatory.

Settlement option. A settlement option is a method of distributing a Life Insurance policy's death benefit OTHER than by a lump sum payment.

Which of the following is NOT considered rebating? - Sharing commissions with a producer licensed in the same line of business. - Returning premium to a client as an inducement for purchasing a policy. - Giving something of value to an insured in exchange for their business. - Offering special dividends.

Sharing commissions with a producer licensed in the same line of business.

Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT... - Signed HIPAA disclosure. - Signed amendment. - Signed statement of Good Health. - The required premium.

Signed HIPPA disclosure. Upon delivery of a rated life insurance policy, the Producer must obtain all of these EXCEPT a "Signed HIPPA disclosure". The HIPPA disclosure should be taken at the time of sale with the application.

The insured has inherited a large sum of money. They purchase an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did the insured purchase? - Single Premium Deferred Annuity with Period Certain. - Flexible Premium with Survivor Annuity. - Flexible Premium with Period Certain. - Single Premium Immediate Joint with Survivor Annuity.

Single Premium Immediate Joint with Survivor Annuity

What is Old Age and Survivors Health Insurance (OASDHI) also known as? - Medicare. - Social Security. - Medicaid. - FICA.

Social Security. Social Security, also known as Old Age, Survivors, and Disability Insurance (OASDI), was signed into law in 1935 by President Roosevelt as part of the Social Security Act.

The premiums paid by an employer for his employee's group life insurance are usually considered to be... - Tax deductible to the employer. - Partially deductible to the employee. - Tax deductible to the employee. - Taxable income to the employee.

Tax deductible to the employer. (to the business)

What kind of insurance product covers children under their parent's policy? - Family Maintenance rider. - Term rider. - Family Income rider. - Payor benefit.

Term rider. Family plan policies usually cover the family head with permanent insurance and the coverage on the spouse and children is term insurance in the form of a rider.

Which of these life insurance riders allows the applicant to have excess coverage? - Automatic Premium Loan rider. - Waiver of Premium rider. - Guarantee Insurability rider. - Term rider.

Term rider. Term riders allow an applicant to have excess life insurance coverage.

Which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made? - Surrender charge is applied. - The account can be rolled into the surviving spouse's IRA. - Distributions will be received tax free if surviving spouse is over age 59 1/2. - Future distributions are payable to the owner's estate.

The account can be rolled into the surviving spouse's IRA. A surviving spouse who inherits IRA benefits or benefits from the deceased spouse's qualified plan is eligible to establish a rollover IRA in the surviving spouse's own name.

Which of the following statements is CORRECT about an agent who is taking an insurance application? - The agent should avoid asking the applicant questions that may cause embarrassment. - The agent should have the applicant initial any changes made on the application. - The agent may allow a member of the applicant's immediate family to sign the application if the applicant is not available. - The agent may answer routine questions on the application for the applicant.

The agent should have the applicant initial any changes made on the application.

A level premium indicates... - The premium is fixed for a period stated in the contract, then becomes variable. - The premium can only be changed with the consent of the insurer. - The premium stays level until the policy's renewal date. - The premium is fixed for the entire duration of the contract.

The premium is fixed for the entire duration of the contract. A level premium means that the premium remains fixed through the life of a policy.

A certain individual is a key employee at a company. If a Key Employee life policy is purchased on the individual's life, which of these statements would be true? - The individual is the policyowner, the insured, and the primary beneficiary. - The company is the policyowner, the individual is the insured, and the company is the primary beneficiary. - The individual is the policyowner and the insured, and the company is the primary beneficiary. - The company is the policyowner, the individual is the insured, and the spouse is the primary beneficiary.

The company is the policyowner, the individual is the insured, and the company is the primary beneficiary.

Said individual is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective? - The date the sales appointment was made. - The date the application was submitted to the insurance company. - The date of application. - The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insurer.

The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insurer. In this situation, coverage will go into effect the date the agent delivers the policy, collects the initial premium, and obtains a good health statement from the insured.

Who is normally considered to be the owner of a 403(b) tax sheltered annuity? - The 403(b) custodian. - The financial institution. - The employer. - The employee.

The employee. The participating employee normally applies for and owns a 403(b) tax sheltered annuity.

Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? - Policy Exclusion. - Incontestable. - Entire Contract Provision. - Assignment.

The entire contract provision. This is found at the beginning of the policy, & states that the policy document, the application (which is attached to the policy), and any attached riders constitute the entire contract. Nothing may be "incorporated by reference," meaning that the policy cannot refer to any outside documents as being part of the contract.

The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and... - The initial premium. - Agreeing to a physical examination. - Delivery of policy. - Disclosure of any medical conditions.

The initial premium.

What advantage does the renewability feature give to a term policy? - The insured may extend the coverage period at no additional cost. - The insured may apply for this policy with little or no underwriting. - The insured may borrow against the cash value. - The insured may extend the coverage period.

The insured may extend the coverage period. The advantage a renewability feature gives to the insured is it allows him/her to extend the coverage period. Usually a premium increase is involved upon renewal.

An insurance company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has... - Waived one of its legal rights. - Issued a voidable policy. - Committed an act of fraud. - Assigned the risk to a reinsurer.

The insurer has waived one of its legal rights.

Which statement regarding the Change of Beneficiary provision is true? - The beneficiary can only be changed with the consent of the insurer. - The policyowner can change the beneficiary. - The insured can change the beneficiary. - A beneficiary change is subject to underwriting procedures.

The policyowner can change the beneficiary.

How many days does a life insurance policyowner have to return the policy and receive a full premium refund? - 5 - 10 - 15 - 30

The policyowner has 10 days upon policy delivery to return a Life Insurance Policy and receive a full refund on premiums. (free look period)

Life insurance replacement regulation protects the interests of... - The policyowner. - The producer. - The NAIC. - The insurer.

The policyowner. Replacement regulation is designed to protect the interest of the policyowner, since it's usually not in their best interest to replace existing coverage.

A level premium indicates... - The premium is fixed for a period stated in the contract then becomes variable. - The premium can only be changed with the consent of the insurer. - The premium stays level until the policy's renewal date. - The premium is fixed for the entire duration of the contract.

The premium is fixed for the entire duration of the contract.

All of these statements about Equity Indexed Life Insurance are correct, EXCEPT... - Cash value has a minimum rate of accumulation. - If the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index. - The premiums can be lowered or raised, based on investment performance. - Tied to an equity index such as the S&P 500.

The premiums can be lowered or raised, based on investment performance. Equity Indexed Life Insurance is permanent life insurance that allows policyholders to tie accumulation values to a stock market index.

All of these statements about Equity Indexed Life Insurance are correct, EXCEPT... - Cash value has a minimum rate of accumulation. - If the gain on the index goes beyond the policy's rate of return, the cash value will mirror that of the index. - The premiums can be lowered or raised, based on investment performance. - Tied to an equity index such as the S&P 500.

The premiums can be lowered or raised, based on investment performance. The premiums cannot be lowered or raised with Equity Indexed Life Insurance. Equity Indexed Life Insurance is permanent life insurance that allows policyholders to tie accumulation values to a stock market index.

A person who purchases a life annuity is given protection against... - Inflation. - The risk of dying prematurely. - The risk of living longer than expected. - The risk of not having enough retirement income.

The risk of living longer than expected.

True or False... Modified whole life policies are distinguished by premiums that are lower than typical whole life premiums during the first 5 years and then higher than typical thereafter.

True.

Life insurance companies are required to establish and maintain an anti money laundering compliance program according to which federal regulation? - Federal Reserve Act. - USA Patriot Act. - Fair Credit Reporting Act. - Dodd Frank Act.

USA Patriot Act. The USA PATRIOT Act includes provisions intended to prevent the financial services industry, including the insurance sector, from being used for money laundering and terrorist financing by criminals and terrorists.

A Variable Annuity has which of the following characteristics? - Underlying equity investments. - Only available with Single Premium. - Offers a fixed interest rate. - Does not require an insurance license.

Underlying equity investments. These investments are in a separate account.

All of these are considered to be a benefit under Social Security, EXCEPT for... - Survivorship. - Unemployment. - Disability. - Retirement.

Unemployment. All other listed options are considered to be a benefit of Social Security.

In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this? - Subrogation. - Unenforceable. - Adhesion. - Unilateral.

Unilateral. Insurance contracts are unilateral. This means that only one party makes any kind of enforceable promise.

What type of life insurance incorporates flexible premiums and an adjustable death benefit? - Endowment Policy. - Modified Whole Life. - Decreasing Term. - Universal Life.

Universal Life.

Said individual, age 40, is looking to buy a Life Insurance policy that will allow for increases or decreases in coverage as their needs change. The policy best suited for the individual would be... - Straight Life. - Universal Life. - An Endowment. - Modified Whole Life.

Universal Life. Universal life insurance is characterized by flexible premiums and an adjustable death benefit.

The free look provision begins... - Upon the date of the sales presentation. - Upon receipt of the policy by the producer. - Upon receipt of the policy by the policyowner. - Upon the completion of the application.

Upon receipt of the policy by the policyowner. When delivering the policy, the agent needs to explain that the free-look provision begins upon receipt of the policy by the policyowner.

A life policy with a death benefit and cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as... - Adjustable Life. - Graded Premium Life. - Variable Life. - Modified Whole Life.

Variable Life.

Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? - Variable Life. - Credit Life. - Universal Life. - Interest Sensitive Whole Life.

Variable Life. Because of the transfer of investment risk from the insurer to the policyowner, variable insurance products are considered securities contracts as well as insurance contracts.

A life policy with a death benefit and cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as... - Adjustable Life. - Graded Premium Life. - Variable Life. - Modified Whole Life.

Variable Life. The cash value and death benefits of a Variable Life policy can fluctuate according to the performance of its underlying investment portfolio.

A life policy that contains a monthly mortality charge as well as self directed investment choices is called a(n)... - Joint Life policy. - Endowment. - Variable Universal Life policy. - Universal Life policy.

Variable Universal Life policy

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? - Joint Life. - Adjustable Life. - Variable Universal Life. - Universal Life.

Variable Universal Life.

Said individual owns a life insurance policy with cash values that fluctuate according to the underlying investment performance of common stocks. Which of these policies does S own? - Endowment. - Variable Term Life. - Variable Whole Life. - Joint Life.

Variable Whole Life. Variable whole life insurance is an insurance policy in which the cash values are determined by the performance of the underlying securities in the policy.

Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? - Universal life. - Variable life. - Fixed annuity. - Modified endowment contract.

Variable life. The variable nature of a variable whole life insurance policy is its death benefit. However, if investment performance is poor, the death benefit will not go lower than the policy's guaranteed minimum.

Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan? - Variable life. - Universal life. - Variable universal life. - Adjustable life

Variable universal life. Any policy whose title includes the term "Universal" indicates that the policy has a flexible or adjustable premium. The variable nature of the product indicates that the cash savings value is invested in the stock market (e.g. mutual funds) which permits for a contract owner to decide where the equity (i.e. cash value) is to be invested.

Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan? - Variable life. - Universal life. - Variable universal life. - Adjustable life.

Variable universal life. Any policy whose title includes the term "Universal" indicates that the policy has a flexible or adjustable premium. The variable nature of the product indicates that the cash savings value is invested in the stock market (e.g. mutual funds) which permits for a contract owner to decode where the equity (i.e. cash value) is to be invested.

What kind of Life policy offers the owner investment in products such as money market funds, long term bonds and equities? - Adjustable. - Term. - Universal. - Variable.

Variable.

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 *INSERT ANSWER* rate loan. - Fluctuating. - Fixed. - Variable. - Increasing.

Variable. The interest on Variable rate cash value loan may vary over time.

A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached? - Accelerated Benefits. - Waiver of Premium. - Cost of Living. - Return of Premium.

Waiver of Premium. The Waiver of Premium is a rider on a life insurance policy that guarantees that the premium will be paid if the insured is disabled for a specified period of time.

At what point does an informal agreement become a binding contract? - When one party makes an invitation and the other makes an offer. - When an offer is made by one party and the other party rejects the offer and makes a counteroffer. - When one party makes an offer and the other party accepts that offer. - When consideration is provided by one of the parties to the contract.

When consideration is provided by one of the parties to the contract.

At what point does a Whole Life Insurance policy endow? - At age 65. - When premium paid equals the death benefit. - When the cash value equals the death benefit. - In 30 years or age 65, whichever comes first.

When the cash value equals the death benefit. A Whole Life Insurance Policy endows when the cash value equals the death benefit.

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? - When the policy is issued. - The date of policy delivery. - When the conditions of the receipt are met. - The date the sales appointment.

When the conditions of the receipt are met.

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? - When the policy is issued. - The date of the policy delivery. - When the conditions of the receipt are met. - The date the sales appointment was set.

When the conditions of the receipt are met. A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect.

What does the ownership clause in a life insurance policy state? - Who the policyowner is and what rights the policyowner is entitled to. - Who the beneficiary is and what rights the beneficiary is entitled to. - Ownership cannot be assigned after the incontestable period. - Allows the policyowner to adjust the death benefit and premium amount at anytime.

Who the policyowner is and what rights the policyowner is entitled to.