KY Life Insurance Exam

Reasonable expectations

A court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?

a desist order

A request from the Commissioner for a person to stop committing a violation is called

Copy of the original application

According to the entire contract provision, what document must be made part of the insurance policy?

6 months.

An insurer may delay or defer a request for a policy loan for up to

Fixed period

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

A Modified Endowment Contract.

If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is

Gross premium

Mortality - Interest + Expense =

Write insurance statutes.

The Commissioner has the power and authority to perform all of the following EXCEPT

Grace period.

The automatic premium loan provision is activated at the end of the

expenses

The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the business is called

The rider is usually level term insurance.

Which is true about a spouse term rider?

a RN

Who may complete a paramedical report?

3 days

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

cost of living rider

a rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the consumer price index, is called

funding against general company financial loss

all of the following are business uses of life insurance except

term

children's riders attached to whole life policies are usually issued as what type of insurance

misrepresentation

during sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. this describes what

as of the application date

the full premium was submitted with the application for life insurance, and the policy was issues two weeks later as requested. when does the policy coverage become effective

to purchase a one-year term insurance in the amount of the cash value

the paid-up addition option uses the dividend

workers compensation

which of the following is not an example of a business use of life insurance

Surplus lines insurer.

A nonadmitted insurer who provides insurance coverages that are not available from an admitted insurer is called

survivor protection

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Fulfill post secondary education requirements.

All of the following are requirements for insurance license applicants EXCEPT

The amount of insurance on the life of any debtor may exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor.

All of the following statements are TRUE concerning Debtor Groups EXCEPT

It will increase because the insured will be 5 years older than when the policy was originally purchased.

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?

Refund the premiums paid.

An insured committed suicide one year after his life insurance policy was issued. The insurer will

Interest-sensitive Whole Life.

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an

Executive is the owner, and the executive pays the premium.

In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?

Investment Experience.

L&D Insurance earned a higher return on their invested premiums than they expected to. They will use this money to pay dividends on life insurance policies. This is called

The value of the policy

The collateral for policy loans can be which of the following?

premium

The consideration paid to the insurance company for life insurance protection is called a (n)

To purchase a smaller amount of the same type of insurance as the original policy.

The paid-up addition option uses the dividend

Reduction of premium

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Family Income Policy

W owns a policy in which she is covered as the bread-winner with permanent insurance and with decreasing term insurance in the form of a rider. What type of policy is this?

Coverage until death or age 100

What characteristic makes whole life permanent protection?

Favorable tax treatment

What is the advantage of having a qualified annuity?

6 months

What is the waiting period on a Waiver of Premium rider in life insurance policies?

Issue the policy anyway and pay the face value to the beneficiary.

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

December 31 of the year that contains the fifth anniversary of the owner's death.

When must an IRA be completely distributed when a beneficiary is not named?

At the time of application

When must insurable interest exist in a life insurance policy?

Funds exceeding the premium paid are taxable as ordinary income.

Which is TRUE about the cash surrender nonforfeiture option?

Application

Which is the primary source of information used for insurance underwriting?

Attempting in good faith to effect prompt, fair and equitable settlements of claims on which liability has become reasonably clear.

Which of the following are NOT improper claims practices if committed in conscious disregard for the law or if committed with such frequency as to indicate a general business practice to engage in that type of conduct?

pension plans

Which of the following are established by the employer to provide specific benefits to eligible employees at retirement?

It may last for the lifetime of the annuitant.

Which of the following is TRUE regarding the annuity period?

The chief administrator of the insurer is called an "attorney-in-fact".

Which of the following is a characteristic of a Reciprocal Insurance Exchange?

It provides income the beneficiary cannot outlive.

Which of the following is true regarding a single life settlement option?

Dividends are not taxable.

Which of the following is true regarding taxation of dividends in participating policies?

PIA

Which of the following refers to the amount of retirement benefits a worker receives under Social Security based on the worker's earnings and retirement age?

Automatic premium loan

Which of the following riders can be included in a life insurance policy without additional premium due?

It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.

Which of the following statements about the reinstatement provision is true?

Insuring clause

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Participating

Which type of insurance policy pays dividends if there are excess premiums over the cost of providing the insurance?

Monthly premium waiver and monthly income

Z falls from the roof of his house while fixing it and damages his spinal column enough to render him disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will Z receive?

revocable beneficiary

a policy owner who is also the insured wants to name her husband as the beneficiary of her life policy. she also wishes to retain all the rights of ownership. the policy owner should have her husband named as the

an employee's elderly mother

all of the following would be considered dependents under a group life policy except

higher

all other factors being equal, what would the premium be life in a survivorship life policy as compared to the premium in a joint life policy

fair credit reporting act

an applicant is denied insurance because of information found on a consumer report. which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company

mortality

fewer of L&D insurance's insureds died than were actuarially projected this year, therefore, fewer death claims were paid. when l&d insurance uses the money saved on death claims to pay life insurance dividends, it is called

until the beneficiary's death

how long will the beneficiary receive payments under the single life settlement option

4.5 days

if a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply

whether an insurable interest exists between the individuals

if an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about

require evidence of insurability

if an employee wants to enter the group outside of the open enrollment period, to reduce the adverse selection, the insurer may

considered true to the best of the applicant's knowledge

representations are written or oral statements made by the applicant that are

agents

solicitors are employed by

depends on the performance of a separate account

the death benefit in a variable universal life policy

2 years

the validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years

2.2 years

the validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years

3

under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer then makes a matching contribution up to an amount equal to what percent of the employee's annual wages

extended term

under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policy owner

coverage until death or age 100

what characteristic makes whole life permanent protection

it is a period during which payments into the annuity grow tax deferred

which of the following is true regarding the accumulation period of an annuity

Pay the policy proceeds only if it would have issued the policy.

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Return the policy to the insurer.

Agent D submitted an application for life insurance on client A. No money was sent with the application. When Agent D attempted to deliver the policy, he discovered that A had suffered a heart attack since the application was taken. The agent should

It is level term insurance.

Which of the following best describes annually renewable term insurance?

19 years and 8 months

a 20 year family income policy was purchased effective April 1, 2001. the insured died four months later on August 1, 2001. the beneficiary receives monthly income for

guaranteed insurability option

an individual is purchasing a life insurance policy with a face value of $25,000. while this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. which of the following options should be included in the policy?

industrial life

an insured has a life insurance policy with a face amount of $500. he pays a premium each week to the agent who sold him the policy. what kind of policy does the insured have

pay a reduced death benefit

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

whether an insurable interest exists between the individuals

if an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about what

decreases

if an insured changes his payment plan from monthly to annually what happens to the total premium

reserves

in order to assure that an insurer can cover liabilities, insurance regulators require it to set aside funds called

cash values can be borrowed at any time

what does "liquidity" refer to in a life insurance policy

retirement benefit

what is the primary purpose of qualified plans

when the application is signed and a check is given to the agent

when is the earliest a policy may go into effect

the donor must give all rights of ownership to the charity

when making a charitable gift of a life insurance policy, what must the donor do to receive the tax advantages available

the time is not specified so long as the total indebtedness does not exceed the policy cash

when must a life insurance policy loan be repaid

reduced paid-up

which nonforfeiture option provides coverage for the longest period of time

the period of time during which accumulated money is converted into income payments

which of the following best describes what the annuity period is

a whole life insurance policy is exchanged for a term insurance policy

which of the following is not an allowable 1035 exchange

debtor in creditor

which of the following is not an example of an insurable interest

policy delivery

which of the following is the most common time for errors and omissions to occur on the part of an insurer

the cost of coverage is based on the ratio of men and women in the group

which of the following statements about group life is correct

a debtor has an insurable interest in the life of a lender

which of the following statements is not true concerning insurable interest as it applies to life insurance

creating an estate

which of the following will not be an appropriate use of a deferred annuity

life insurance proceeds

which of the following would be the best option that would help the surviving spouse of the insured to put her child through daycare after the insured's death

family income policy

which special policy combines decreasing term insurance with whole life insurance to provide the insured's family with a monthly income upon the death of the insured, while maintaining permanent coverage until the end of the income payments