LICENSE EXAM MODE

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

It provides income the beneficiary cannot outlive

Which of the following statements is TRUE about a policy assignment?

It transfers rights of ownership from the owner to another person.

Which of the following information about the applicant is NOT included in the General Information section of the application for insurance?

Medical background

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

Morale

During replacement of life insurance, a replacing insurer must do which of the following?

Obtain a list of all life insurance policies that will be replaced

An insured purchased a life policy in 2010 and died in 2020. The insurance company discovers at that time that the insured had misstated information about her insurance history on the application. What will the insurer do?

Pay the death benefit

What describes the specific information about a policy?

Policy summary

A situation in which a person can only lose or have no change represents

Pure risk.

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it is in the best interest of the client.

Which of the following insurance options would be considered a risk-sharing arrangement?

Reciprocal

What part of the Internal Revenue Code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences?

Section 1035 Policy Exchange

Every long-term care insurer in California must submit to the Commissioner a list of all agents or other insurer representatives authorized to solicit individual consumers for the sale of long-term care insurance. These submitted agent lists must be updated at least

Semiannually

Events in which a person has both the chance of winning or losing are classified as

Speculative risk.

Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?

Standard risk is representative of the majority of people.

After three years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is this percentage called?

Surrender charge

Which of the following life insurance policies is designed to cover two people and pay benefits after both insureds have died?

Survivorship Universal Life

Which of the following is called a "second-to-die" policy?

Survivorship life

Which of the following entities may NOT be an insurer?

The Commissioner

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

The annuitant must be a natural person.

If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?

The balance of the loan will be taken out of the death benefit.

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data.

Excluding life insurance, under what condition may a policy owner transfer their personal insurance policy to another person?

The insured will need the written consent of the insurer.

If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination?

The insurer

Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT

The loss may be intentional.

In an Adjustable Life policy, all of the following can be changed by the policy owner EXCEPT

The type of investment.

Which of the following statements regarding policy dividends is true?

They are a refund of unearned premiums.

Which of the following statements regarding deferred compensation funds is INCORRECT?

They are usually qualified plans.

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium.

Which of the following Life Insurance policies would be considered interest-sensitive?

Universal life

Which of the following CANNOT be included along with illustrations used to sell life insurance?

Vanishing premium information

Which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value?

Variable universal life

Which of the following is a key distinction between variable whole life and variable universal life products?

Variable whole life has a guaranteed death benefit.

When is the earliest a policy may go into effect?

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

The main difference between immediate and deferred annuities is

When the income payments begin.

Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase?

Withdrawn amounts are taxed on a last in, first out basis.

From the CDI website, an agent or broker will report suspected insurance fraud via what portal?

Consumer reporting portal

An agreement that is enforceable by law is known as a

Contract.

According to the entire contract provision, what document must be made part of the insurance policy? 1

Copy of the original application

Which of the following is NOT a legitimate use of annuities by businesses?

Creating a tax shelter

The term "fixed" in a fixed annuity refers to all of the following EXCEPT

Death benefit

A young father would like a life insurance policy to provide coverage for all five family members at the lowest cost. Which type of policy would he most likely buy?

Family Protection Policy

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Family term rider

J applied for a life insurance policy on January 10. The policy was issued on January 31. J's agent was vacationing at the time the policy was issued, so J did not receive the policy until February 18. J decides that he does not want the policy. When would J need to return the policy to the insurer in order to receive a full refund of premium paid?

February 28th, or 10 days after the time the policy is delivered.

An insured has the right to return the new insurance policy for a full refund during the

Free-look period.

All of the following are business uses of life insurance EXCEPT

Funding against the company's general financial loss.

An individual is purchasing a permanent 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?

Guaranteed insurability option

Units with the same or similar exposure to loss are referred to as

Homogeneous.

When would a misrepresentation on the insurance application be considered fraud?

If it is intentional and material

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

Immediate annuity

Annually renewable term policies provide a level death benefit for a premium that

Increases annually.

Which of the following is TRUE about the 10-day free-look period in a Life Insurance policy?

It begins when the policy is delivered.

Why is an equity-indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate.

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

$9,800

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

$100,000

The insured is also the policy owner of a whole-life policy. What age must the insured attain in order to receive the policy's face amount?

100

If a person is disabled at age 27 and meets Social Security's definition of total disability, how many work credits must he/she have earned to receive benefits?

12 credits

Any licensed agent may submit an application for insurance to an insurer without an appointment. However, the insurer must submit the notice of appointment to the Commissioner within how many days?

14

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?

1Automatic premium loan

During the cancellation period, an insurer must refund any premiums and policy fees within how many days of written cancellation notice by the insured?

30

All insurance policies and annuity contracts delivered to senior citizens in the State of California are subject to a cancellation period of at least

30 DAYS

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?

6 CREDITS

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

A STOLI policy.

Which of the following statements is NOT true concerning insurable interest as it applies to life insurance?

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

Which of the following departments is responsible for developing mortality and morbidity tables?

Actuarial

An insurance agent explains to his client the difference between two disability income insurance policies and then offers to fill out an application with the client's personal information and history. Upon completion of the application, the agent informs his client that he will "shop around" to find the company with the most favorable rates. If the agent presents the client's application to an insurer, he will be acting in which of the following capacities?

An insurance broker

What type of life insurance is most commonly used for group plans?

Annually renewable term

The agent's authority to transact insurance business for an insurer is effective

As of the date that the notice of appointment is signed.

When must insurable interest exist in a life insurance policy?

At the time of application

The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called

Avoidance.

Which of the following is true regarding written binders?

Binders prove that the insured has insurance coverage, even though the policy has not been issued yet.

If found material for underwriting, a misrepresentation

Can void a contract.

The act of revoking or terminating an insurance policy is called

Cancellation.

When a policyowner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called

Class designation.

A producer who fails to separate premium monies from his own personal funds is guilty of

Commingling.

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

Conditional