Life Insurance exam
Slippery floors, reckless driving, or providing false information are examples of
Hazards
How many days is the free-look period in most life insurance policies?
10 days
A temporary license in this state is valid for up to
180 dyas
Which of the following is NOT an indicator of a competent party?
Business profession
The reduction of premium option uses the dividend to reduce
Next year's premium
Which dividend option will increase the death benefit?
Paid-up additions
S set up an individual retirement account that her employer is now contributing to. Her employer's contributions are not included in her gross income. What kind of retirement plan does S have?
Simplified Employee Pension (SEP)
Which of the following types of insurance products would be appropriate for an individual with a low income and high insurance needs?
Term insurance
Insurance provides a means to
Transfer a loss
Which department or division of an insurance company is responsible for the selection, evaluation, and distortion of risks?
Underwriting
All other factors being equal, which of the following premium modes would result in the lowest overall premium?
Annual
In Credit Life Insurance, who is responsible for paying the policy premiums?
Borrower only
A new homebuyer wants to purchase a life insurance policy that would protect his family against losing the home, should he die before the mortgage was paid. The most inexpensive type of policy that would accomplish this need would be
Decreasing term
An insured bought an insurance policy that requires him to pay $150 in premiums on the 15th of each month. He then takes an extended vacation and forgets to pay the premium. Ten days later, his policy is still in effect and has not lapsed. Which policy provision allowed for this?
Grace period
All of the following are true about the Social Security System EXCEPT
The system has been largely privatized
A life insurance policy qualifies a Modified Endowment Contract (MEC) if the amount of premium paid exceeds the amount that would have provided paid-up insurance in how many years?
7 years
There is a 10% penalty on the taxable portion of a deferred annuity when it is surrendered prior to what age?
59 1/2
If the policy loan and the interest become greater than the total cash value of a life insurance policy, the policy will lapse. The policy owner must be given how many day's written notice of cancellation when this occurs?
30
Which of the following would not be eligible for coverage under key employee?
The owner of a shop
Gross premium for a life insurance policy is determined by adding which to components
Net premium and expenses
Cash Value guarantees in a whole life policy are called
Nonforfeiture values
With Adjustable Life, the owner can change all of the following EXCEPT
The insured
Which of the following is required in order for a plan to be qualified?
The plan must be formally written and communicated to the employees
All of the following statements about mutual insurance companies are correct EXCEPT
Policy dividends issues by mutual companies are guaranteed and not table
What is the purpose of the Agent's Report in the application process?
To provide additional information about the applicant to the underwriters
Which of the following would NOT trigger the payment of Accelerated Death Benefits?
Being permanently disabled
Insurers CANNOT transact insurance in this state without a
Certificate of Authority
Which for the following losses would likely be covered under the accidental Death Rider?
Death caused by a head-on collision
Which type of authority is found in the agent's contract?
Express
J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that he dies before all of the benefits are paid; the remaining amount will go to the contingent beneficiary.Which settlement option did J choose?
Fixed amount
When an agent changes address of their residence or office, the Insurance Department must be notified within
30 days
Which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity?
Accumulation period
In credit Life Insurance, who is responsible for paying the policy premiums?
Borrower only
An agent is filling out an insurance application for a client. The applicant realizes she should have answered an earlier question differently. Which of the following methods should the agent use to make the change?
Cross out he incorrect information, write int he correct answer, and have the applicant initial the change
Which of the following is true regarding a joint life annuity?
The payments stop at he first death
Which of the following documents used in the underwriting process contains specific medical details about an applicant?
Attending Physician's Statment (APS)
Partners in a business want to make sure that if one of them were to pass away, their surviving family will receive a fair value for their portion in the business. What life insurance arrangement would be most suite for transitioning the business?
Buy-Sell Agreement
An employee dies having 6 quarters of coverage during the previous 13-quarter period. What status of coverage does the employee have under Social Security?
Currently insured
A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will
Continue to increase
According to the Fair Credit Reporting Act, all of the following statements are true EXCEPT
IF an applicant is declined for an insurance policy, he or she has no right to know what was in the report
A policy matures and pays the face amount if the insured lives to a specified date. This best describes
An endowment policy
An annuity would normally be purchased by an individual who wants to
Provide income for retirement
Life insurance creates an immediate estate. Which of the following best explains this statement?
The face value of the policy is payable to the beneficiary upon the death of the insured
If an insurance company issues a policy even though some questions on the application were unanswered, when can the insurer get the answer to those questions?
Never; the insurer has waived its right to those answers by issuing the policy
Which of the following statements describes one of the reasons individuals purchase life insurance?
It creates an immediate estate
In order to reinstate a life insurance policy the insured must do all of the following EXCEPT
Pay next year's premium in advance
Which of the following could reduce the amount of the death benefit?
Failure to repay a policy loan?
What is the cost of coverage based on for group life insurance?
The average age and ration of men to women
