Life Insurance

Commissioner obtains a restraining order against a person who has violated an insurance law. The person continues the violation for 10 days. The person will have to pay a fine of

$0

The owner of a life insurance policy dies, and no beneficiary is named. One of the owner's friends paid for part of the funeral costs. What is the max amount of money that the friend could be issued from the insurance policy?

$1,000

An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax-free rollover?

$10,000, no tax consequence

Which of the following persons is not required to complete CE?

A limited lines intermediary with 40 years of continuous licensure

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed Insurability Rider

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

When the insured selects the extended term non forfeiture option, the cash value will be used to purchase term insurance with what face amount?

Owner will receive the surrender value of the annuity

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

This rider is available to all insureds with no additional premium

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

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

If a person does not comply with an order issued within 2 weeks after the Commissioner has given notice, for each day that the violation continues, the Commissioner may issue a fine of up to

$5,000

What is the maximum billing for an insurer?

1% of net premiums earned

The insurer decided to cancel an insurance policy prior to its expiration due to nonpayment of premium. When can cancellation take place?

10 days after the notice was delivered to the policyholder

If reasonably possible, a notice of loss claim must be provided to the insurer within what period of time after the time required by the policy?

12 months

When the appointment of an individual agent is terminated, the insurer must notify the Office of the Commissioner with appropriate forms within how many days after the termination date?

15 days

No individual life insurance policy may be contested after it has been in force for

2 years

Intermediaries are required to maintain records related to insurance transactions for what period of time?

3 years

The insurer must maintain copies of all signed illustrations for a minimum of how many years after the policy is no longer in force?

3 years

A claim is considered overdue if NOT paid within how many days after the insurer receives written notice?

30 days

How long are oral contracts valid in WI?

30 days

In this state, insurers must pay a claim within how many days of receiving proof of loss?

30 days

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

5 days

When the Commissioner revokes an intermediary's license for any reason other than nonpayment of fees, the intermediary may NOT apply for a new license for how many years?

5 years

According to the rule of readability of insurance polices in this state, what is a required minimum score on the Flesch reading ease test for Medicare Supplement policies?

50

What is the waiting period on a waiver of premium rider in life insurance policies?

6 months

An insurer decides to renew a policy but at a higher premium rate, starting on the renewal date. How many days in advance must the insured be notified?

60 Days

A policy may be issued for a term longer than one year or for an indefinite term as long as there is a clause in the policy providing for cancellation by giving how much notice prior to anniversary date?

60 days

An insurance policy is considered a "new policy" if it has been in effect for what maximum time period?

60 days

Which of the following is NOT an allowable 1035 exchange?

A life insurance policy is exchanged for an annuity

Which of the following would NOT be a violation of state insurance regulations?

Agent C uses her license to write only business other than controlled (phrase differently)

The rule relating to insurance policy readability applies to which of the following?

All insurance polices issued in this state

Who can make a fully deductible contribution to a traditional IRA?

An individual not covered by an employer-sponsored plan who has earned income

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's

Ancestry (Phrase this differently)

How often must insurers provide a current copy of the privacy policy and practices to each customer?

Annually

The death protection component of Universal Life Insurance is always

Annually Renewable Term

SIMPLE Plans require all of the following EXCEPT

At least 1,000 employees.

A policy owner fails to pay the premium on his whole life after the grace period passes but the policy remains in force. This is due to what provision?

Automatic Premium Loan

In WI, producers are permitted to share or split commissions providing that

Both are properly licensed for the line of insurance

Which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy

Under which non-forfeiture option does the company pay the surrender value and have no further obligations to the policy owner

Cash surrender

Insurers must report or list all appointments and all terminations of appointments to what authority?

Commissioner

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

All of the following are purposes of insurance EXCEPT to

Earn commissions

Which of the following describes the tax advantage of a qualified retirement plan?

Earnings in the plan accumulate tax deferred

When does an agent's license expire?

Every 2 years

In the executive bonus plan, who is the owner of the policy and who pays the premium?

Executive is the owner and the executive pays the premium

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

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?

Fair Credit Reporting Act

A person that markets insurance but does not include an insurer is called a

Firm

An insurance company assures its new policy holders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?

Fraud

In a direct rollover, how is the money transferred from one plan to the new one?

From trustee to trustee

Which is TRUE about the cash surrender non forfeiture option?

Funds exceeding the premium paid are taxable as ordinary income

Which of the following is a feature of a single premium immediate annuity?

Income payments start within one year

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period time is know as the

Incontestability clause

An intermediary's license remains in effect for how long?

Indefinitely

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?

Industrial Life

Who does the Interstate Insurance Product Regulation Compact serve?

Insurers

Which of the following best describes annually renewable term insurance?

It is level term insurance

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

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

Which of the following statements is TRUE concerning the Accidental Death Rider

It may pay double or triple the face amount

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

It provides income the beneficiary cannot outlive

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

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

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

LIFO

Which of the following is a person who receives a fee or commission to attempt to negotiate settlements between a life insurance policyholder or certificate holder and one or more life settlement providers

Life Settlement Broker

An insurance organization that does not issue insurance polices but provides a meeting place for underwriters to conduct business is known as a

Lloyd's association

An agent is selling a client a Variable Life Insurance policy and as an inducement shows the client a projection based upon shares or dividends paid on a similar policy. This is

Misrepresentation

An agent who includes a statement or omits a statement which, when taken in context of the whole presentation, may tend to mislead or deceive the persons addressed has committed

Misrepresentation

Which of the following is the use of false, misleading, or deceptive statements to describe the terms or benefits of any policy?

Misrepresentation

All of the following are required in a life insurance illustration except

Name and home address of agent

a 35 year old spouse of the insured collects early distributions from her husband's retirement plan as a result of a divorce settlement. What penalties, if any, will she have to pay?

No penalties

Death benefits payable to a beneficiary under a life insurance policy are generally

Not subject to income taxation by the Federal Government

An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?

Profit sharing plan

Which of the following is a person, other than an officer or employee of the ceding insurer, who solicits, negotiates, or places reinsurance cessions on behalf of a ceding insurer

Reinsurance broker

Churning

Replacing insurance policies for the sole purpose of making commissions

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Required a premium increase each renewal

Which type of retirement account does not require the owner to start taking distributions at age 72?

Roth IRA

When an insurer is given an order of liquidation, which of the following will protect the insureds' unpaid claims?

Security Fund

The Ownership provision entitles the policyowner to do all of the following EXCEPT (phrase differently)

Set premium rates

Which settlement option provides a single beneficiary with income for the rest of his/her life?

Single Life

Which of the following best describes taxation during the accumulation period of an annuity?

Taxes are deferred

The Commissioner conducts an examination of a domestic insurer and believes that the costs of examination places an unreasonable financial burden on the insurer. Which of the following will happen?

The Commissioner's office may pay all or part of the costs

Which of the following is NOT true regarding the annuitant?

The annuitant cannot be the same person as the annuity owner

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

The benefit is received as taxable income

An Adjustable Life policy owner can change which of the following policy features?

The coverage period

The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability

When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is this money placed?

The insurance company's general account

When a life insurance policy was issued, the policy owner designated a primary and contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?

The insured's contingent beneficiary

What happens if a deferred annuity is surrendered before the annuitization period?

The owner will only receive a refund of premium

The policy owner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as

The policy contains sufficient cash value to cover the cost of insurance

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT

The policy is owned by the company

If an insured continually uses the automatic premium loan option to pay the policy premium,

The policy will terminate when the cash value is reduced to nothing

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?

The policy will terminate when the loan amount with interest equals or exceeds the cash value

Which of the following is TRUE for both equity indexed annuities and fixed annuities?

They have a guaranteed minimum interest rate

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

Universal life

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an Insurance Regulatory Authority

Based on the Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?

predicted needs of the family after insured's death

An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the contract's interest NOT be taxable?

spouse

Traditional IRA contributions are

tax deductible