Life Insurance 2

Should an insurer terminate the appointment of an insurance producer for any reason not set forth in the law, the insurer must notify the Superintendent within 15 days. 10 working days. 45 days. 30 days.

30 days.

What is the number of credits required for fully insured status for Social Security disability benefits? 4 10 30 40

40

What is the maximum amount of time that can elapse between examinations of domestic insurers? 1 year 2 years 3 years 5 years

5 years

The death benefit under the Universal Life Option B Decreases by the amount that the cash value increases. Increases for the first few years of the policy, and then levels off. Remains level. Gradually increases each year by the amount that the cash value increases.

Gradually increases each year by the amount that the cash value increases.

Which of the following settlement options in life insurance is known as straight life? Fixed amount Life income Single life Life with period certain

Life income

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of Concealment. Unfair claim practice. Rebating. Misrepresentation.

Misrepresentation.

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy? Nothing $50,000 $100,000 $200,000

$100,000

A licensed agent writes an insurance policy on behalf of an insurer to which the agent is not appointed. If any commissions are to be paid to the agent, within how many days must the agent be appointed to the insurer? 10 15 30 45

15

Employer contributions made to a qualified plan Are subject to vesting requirements. May discriminate in favor of highly paid employees. Are after-tax contributions. Are taxed annually as salary.

Are subject to vesting requirements.

Which of the following is NOT one of the 3 kinds of life insurance illustrations defined in Maine state law? Supplemental illustration In force illustration Advanced illustration Basic illustration

Advanced illustration

Which of the following is NOT true regarding an annuity certain? It will pay until a fixed amount is liquidated. There are no life contingencies. It is a short-term annuity. Benefits stop at the annuitant's death.

Benefits stop at the annuitant's death.

Which of the following includes information regarding a person's credit, character, reputation, and habits? Consumer history Insurability report Agent's report Consumer report

Consumer report

The term "fixed" in a fixed annuity refers to all of the following EXCEPT Amount and length of payments Death benefit Guaranteed rate of interest Equal annuity payments

Death benefit

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation? Decreasing term Variable life Universal life Whole life

Decreasing term

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the Insuring clause. Misstatement of Age clause. Incontestability clause. Reinstatement clause.

Incontestability clause.

Which of the following best describes a misrepresentation? Discriminating among individuals of the same insuring class Issuing sales material with exaggerated statements about policy benefits Making a deceptive or untrue statement about a person engaged in the insurance business Making a maliciously critical statement that is intended to injure another person

Issuing sales material with exaggerated statements about policy benefits

All of the following would be considered an insurance transaction EXCEPT Negotiating coverage. Obtaining an insurance license. Soliciting a policy. Advising a policyholder regarding a claim.

Obtaining an insurance license.

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of Twisting. Controlled business. Rebating. Coercion.

Rebating.

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT The employer pays a bonus to a selected employee to fund the policy. It is considered a nonqualified employee benefit. The policy is owned by the company. Any type of insurance policy may be used.

The policy is owned by the company.

Which of the following is a key distinction between variable whole life and variable universal life products? Variable universal life is regulated solely through FINRA. Variable whole life allows policy loans from the cash value. Variable universal life has a fixed premium. Variable whole life has a guaranteed death benefit.

Variable whole life has a guaranteed death benefit.

An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer? $8,000, tax on growth only $10,000, tax on growth only $10,000, no tax consequence $8,000, no tax consequence

$10,000, no tax consequence

Which individual would be required to be licensed as an insurance producer? An assistant who secures and furnishes information for group insurance A salaried full-time employee who counsels the employer on the employer's insurance interests A person employed by the insurer to inspect and rate risks A salaried employee who advertises and solicits insurance

A salaried employee who advertises and solicits insurance

The minimum interest rate on an equity indexed annuity is often based on The returns from the insurance company's separate account. The annuitant's individual stock portfolio. The insurance company's general account investments. An index like Standard & Poor's 500.

An index like Standard & Poor's 500.

What is the purpose of a conditional receipt? It is given only to applicants who fully prepay the premium. It is intended to provide coverage on a date prior to the policy issue. It guarantees that a policy will be issued in the amount applied for. It serves as proof that the applicant has been determined insurable.

It is intended to provide coverage on a date prior to the policy issue.

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option? Size of each installment Predetermined length of time stated in the contract Length of income period Amount of interest

Size of each installment

Which of the following is an example of a producer being involved in an unfair trade practice of rebating? Inducing the insured to drop a policy in favor of another one when it is not in the insured's best interest Charging a client a higher premium for the same policy as another client in the same insuring class Making deceptive statements about a competitor Telling a client that his first premium will be waived if he purchases the insurance policy today

Telling a client that his first premium will be waived if he purchases the insurance policy today

A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true? The amount distributed is subject to ordinary income tax. The amount of the distribution is reduced by the amount of a 20% withholding tax. No taxes are due since the plan participant is over age 59 1/2. There is a 10% early withdrawal penalty.

The amount of the distribution is reduced by the amount of a 20% withholding tax.

Which of the following is TRUE regarding variable annuities? The funds are invested in the company's general account. The company guarantees a minimum interest rate. A person selling variable annuities is required to have only a life agent's license. The annuitant assumes the risks on investment.

The annuitant assumes the risks on investment.

Which of the following is NOT the consideration in a policy? The application given to a prospective insured Something of value exchanged between parties The premium amount paid at the time of application The promise to pay covered losses

The application given to a prospective insured

Which of the following is an example of liquidity in a life insurance contract? The money in a savings account The cash value available to the policyowner The death benefit paid to the beneficiary The flexible premium

The cash value available to the policyowner

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to The policyowner. The insurance company. The contingent beneficiary. The insured's spouse.

The contingent beneficiary.

In forming an insurance contract, when does acceptance usually occur? When an insurer's underwriter approves coverage When an insurer delivers the policy When an insurer receives an application When an insured submits an application

When an insurer's underwriter approves coverage

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than With the policy. Upon issuance of the policy. Within 30 days after the first premium payment was collected. Prior to filling out an application for insurance.

With the policy.

In Maine, a claim for payment of benefits covered under a policy of insurance is payable Within 45 days of receipt of the proof of loss. Immediately. Within 20 of receipt of the proof of loss. Within 30 days of receipt of the proof of loss.

Within 30 days of receipt of the proof of loss.

The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before-tax corporate dollars, and it does not meet government approval standards. This annuity plan is An executive annuity plan. Subject to government standards. Illegal. A nonqualified annuity plan.

A nonqualified annuity plan.

An insured receives an annual life insurance dividend check. What term best describes this arrangement? Cash option Reduction of Premium Annual Dividend Provision Accumulation at Interest

Cash option

Why is an equity indexed annuity considered to be a fixed annuity? It is not tied to an index like the S&P 500. It has a guaranteed minimum interest rate. It has modest investment potential. It has a fixed rate of return.

It has a guaranteed minimum interest rate.

Which nonforfeiture option provides coverage for the longest period of time? Paid-up option Accumulated at interest Reduced paid-up Extended term

Reduced paid-up

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 Juvenile protection provision. Survivor protection. Life planning. Survivorship insurance.

Survivor protection.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies. The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time. The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies.

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

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? Beneficiary clause Consideration clause Insuring clause Entire contract clause

Insuring clause

What is the advantage of reinstating a policy instead of applying for a new one? The face amount can be increased. The cash values have gained interest while the policy was lapsed. The original age is used for premium determination. Proof of insurability is not required.

The original age is used for premium determination.

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called Fixed period. Fixed amount. Joint life. Joint and survivor.

Joint and survivor.

All of the following are examples of third-party ownership of a life insurance policy EXCEPT When an insured purchased a new home, the insured made an absolute assignment of a life insurance policy to the mortgage company. An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan. An insured couple purchases a life insurance policy insuring the life of their grandson. A company purchases a life insurance policy on their manager, who is an important part of the operation.

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan.

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? Term insurance only Permanent insurance only Universal life insurance only Any form of life insurance

Any form of life insurance

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy? It decreases over the term of the policy. It remains the same as the original policy, regardless of any differences in value. It is reduced to the amount of what the cash value would buy as a single premium. It is increased when extra premiums are paid.

It is reduced to the amount of what the cash value would buy as a single premium.

A producer in Vermont wants to become a producer in Maine. The Superintendent will waive certain examination requirements, provided that Vermont would waive these same requirements if a Maine producer sought licensure in Vermont. What type of license will the Vermont producer receive in Maine? No license Nonresident Limited Temporary

Nonresident