Life Insurance Exam

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount. Of the new term policy ?

$50,000

The notice to senior consumers regarding their right to cancel a policy must be printed on the cover or policy jacket in at least what type of print?

12-point BOLD print

An insurer, by filing a notice of appointment on behalf of the applicant, shall be deemed to have declared that the applicant has had experience or instruction in insurance or that the necessary instruction will be given within

30 days after issuance of license

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

All of the following would be considered insolvent insurers EXCEPT

A company that reinsurers outstanding risks

The legal definition of "person" would not include which of the following?

A family

Which concept is associated with "exclusion ratio"?

Annuities Payments

Who is eligible to purchase an IRA?

Anyone under the age of 70 1/2 who has earned income.

All of the following are true of the federal tax advantages of a qualified plan except:

At distribution, all amounts received by the employee are tax free

Any insurance agent who engages in the insurance business and violates the Code with respect to insurance replacement shall on the first violation...

Be fined a sum of $1,000 (for the first offense)

The set of regulations issued by the California Life Insurance Commissioner that identifies the standards for the insurance code and how it is to be administered is

California ADMINISTRATIVE code of REGULATIONS

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

Cash values can be borrowed at any time

What an insured makes truthful statements on the application for insurance and pays the required premium, it is known as

Consideration

Which of the following types of insurance policies is most commonly used in credit life insurance?

Decreasing term

What is the term for a sales campaign conducted through the mail?

Direct-response

Selection of coverage in employee benefits plans refers to

Employee choosing benefits

Which of the following best defines earned surplus?

Insurer's unassigned funds

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

It provides income the beneficiary cannot outlive

An insurer received a claim on May 1st. On May 31st, the claim was approved in its entirety. By what date can the claimant expect the payment?

June 30th (30 days after)

Which of the following statements is incorrect concerning an IRA

Married individuals must contribute into one account for both spouses, up to a specified amount for each person.

Which of the following premium modes would result in the HIGHEST annual cost for an insurance policy?

Monthly

What describes a situation when poor risks are balanced with preferred risks, and average risks are in the middle?

Profitable distribution of exposures

In case of a loss, the indemnity provision in insurance policies

Restores an insured person to the same financial state as before the loss

The interest earned on policy dividends is

Taxable

All of the following are reasons an insurer or an insured would have the right to rescind a policy EXCEPT

The amount of paid claims exceeds the premiums paid

Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?

The employer is the owner and beneficiary

All of the following statements are true regarding installments for a fixed amount except

The payments will stop when the annuitant dies.

All of the following are general requirements of a qualified plan EXCEPT

The plan must provide an offset for social security benefits.

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account

What is the purpose of the California laws regulating production agencies?

To provide protection for the clients by requiring producers to maintain professional standards of conduct

The paid-up addition option uses the dividend

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

If a policy includes a free-look period of at least 10 days, the buyers guide may be delivered to the applicant

With the policy