Licensing Practice Test

Irrevocable Beneficiary

A beneficiary who has a vested interest in the proceeds of a life insurance policy is the

Receive Commissions

A person is required to be licensed to do which of the following?

Free Look

A week after an insured receives a new life policy, he decides to return it and requests a complete refund of the premium. What provision gives the insured the right to return the policy?

Currently Insured

An employee died after having earned 6 quarters of coverage during the previous 13- quarter period. What status of coverage did the employee have under social security?

$50,000

An insured owns a $50,000 whole life policy. the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

Consideration

An insured pays an annual premium to the insurer

Mutual Insurer

An insurer that is owned by its policyholders and formed as a corporation for the purpose of providing insurance to them.

Nonresident

An out- of - state producer wants to start selling insurance in Texas. What type of license should the producer obtain?

59 1/2

At what age can a participant receive distributions from a qualified plan without incurring a 10% penalty?

Grow tax deferred

Cash Values in life insurance policies

Life Settlement

Due to a life changing event, a policyowner no longer needs her life insurance policy and agrees to sell to a third party for more than its cash value. this is called a

Appointed by the governor

How is the Commissioner of Insurance selected for office?

31 days

How long does an employee have to convert group policy coverage to an individual policy without evidence of insurability?

0

How many credit hours of continuing education can be carried over to the next renewal period?

The portion that exceeds the total premiums paid is taxable

If the cash value exceeds the premiums paid in a whole life policy, what are the tax consequences of a policy surrender?

Purchase of a new home

The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT;

Becomes Terminally ill

The accelerated benefits provision will allow for an early payment of the death benefit when the insured is;

Continuous Premium (Straight Life)

The most common type of whole life insurance which premiums are payable over the whole life of the insured age to 100 is called

Conditional Receipt

The receipt given to a life insurance applicant when the application is completed and the initial premium is received is called

The Insurance Company

The state Governor has asked the Commissioner to examine an insurance company after several policyholders have filed complaints. Who will pay for the examination?

No beneficiary is named

Under what condition will the estate become a beneficiary when NOT specifically designated?

Issuing sales materials with false statements about policy benefits

What best describes a misrepresentation?

It creates immediate estate

What describes one of the reasons individuals purchase life insurance?

Discriminating against a group of individuals because of poor risk

What is NOT an unfair trade practice?

it meets the requirements of life insurance

What is NOT true for Modified Endowment Contracts?

An imprisonment up to 1 year

What is not a possible penalty for violations of Insurance Code?

Early Retirement

What is not considered an expectation to the early distribution rule of qualified plans?

They grow tax deferred

What is true regarding taxation of cash values in life insurance policies?

Traditional IRA

What life insurance products would require IRS approval?

Reinstatement

What provision allows the policyowner to reactivate a lapsed life insurance policy no more than three years ago?

Accelerated Death Benefit Rider

What rider could pay life insurance benefits to an insured while the insured is still living?

Post a bond with the Department

Which is not a requirement for obtaining a resident producer license in the state?

Reduced paid up

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

Increasing Term Life

Which of the following policies would NOT offer a policy loan option?

Insuring Clause

Which provision specifies the insurer and the insured's agreement, the promise to pay, the type of coverage in general terms and the policy limits?

Life Income

Which settlement option potentially allows the beneficiary to receive more than the initial death benefit?

Representations

statements in the application for insurance that are believed to be true to the best of the applicants knowledge are called