Life insurance exam
An insured recently discovered that the interest rate on his policy loan once again increased. What could be the shortest amount of time that could have passed since the last change in the insureds interest rate?
3 months
For how long are insurers required to maintain records pertaining to life insurance solicitation?
3 years
When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy for
3 years
An insurance agent has received a request for a hearing from the commissioner. Within how many days must the hearing be held?
30 days
How long is the commissioner's term of office?
4 years
A paid-up non forfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within how many days after the due date of the premium in default?
60 days
What is the maximum allowed rate of interest on policy loans from life insurance?
8%
All of the following are requirements of eligibility for social security disability income benefits EXCEPT A) being age 65 B) fully insured status C) inability to perform any gainful work D) waiting period of 5 months
A
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
To sell variable life insurance policies, an agent must receive all of the following
A life insurance license, FINRA registration, A securities license
What document is delivered to the policy owner and includes information about premium amounts, cash values, surrender values, and death benefits for specific policy years?
A policy summary
What is a material misrepresentation
A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
All of the following would be excluded from the regulation on life insurance solicitation EXCEPT
A term life policy
Universal Life Insurance policy is best described as
An Annually Renewable Term policy with a cash value account.
What component must a life insurance policy have to allow policy loans?
Cash value
A tax-sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only.
What must an insurer obtain in order to transact insurance within a given state?
Certificate of Authority
A producer who fails to separate premium monies from his own personal funds is guilty of
Commingling
Which of the following would be considered an illegal inducement to purchase insurance A) mailing an agency brochure to a prospective client B) confirming future dividends in a life insurance proposal C) listing the insurance companies the agents represents in a letter D) inviting prospective clients to the grand opening of the producers new office
Confirming future dividends in a life insurance policy
Producers in Georgia will be deemed to be using their license primarily to write controlled business if, during any calendar year,
Controlled business accounts for more than 25% of the agent's business.
What characteristic makes whole life permanent protection?
Coverage until death or age 100
All of the following would be excluded from the regulation on life insurance solicitation EXCEPT A) a group life policy B) an annuity C) a credit life policy D) a term life policy
D
Which of the following is NOT an example of a business use of Life Insurance? A) key person B) Executive Bonuses C) Buy-sell Funding D) Workers compensation
D
The term "conservation effort" refers to
Discouraging policyholders from replacing existing policies
What would not be considered a rebate if offered to an insured in the sale of insurance?
Dividends from a mutual insurer
Insurers must screen all marketing plans to ensure that an advertisement does NOT use as the name of any kind of an annuity contract any phrase that
Does not include the word "annuity" unless accompanied by other clear language indicating it is an annuity.
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
How is the Commissioner of Insurance selected to be the chief officer of the Department of Insurance?
Elected to office.
The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the
Entire Contract
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
Joint Life
Variable whole life insurance is based on what type of premium
Level fixed
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
Level term
Calling a variable insurance policy an investment plan is considered to be a violation of
Life insurance advertising regulations
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is this?
Limited Pay Life
What would provide an underwriter with information concerning an applicants health history
Medical Information Bureau
Which term described the benefits of a life insurance policy that the policy owner does not automatically relinquish even if the policy lapses?
Nonforfeiture values
Under a pure life annuity, an income is payable by the company
Only for the life of the annuitant
What is another term for the accumulation period of an annuity?
Pay-in period
A person who negotiates insurance contracts must hold a
Producer license
Another name for a substandard risk classification is
Rated
An IRA purchased by a small employer to cover employees is known as a
Simplified Employee Pension Plan
What is rebating?
Special offers or favors, outside of the contract
The duties of an agent where replacement is involved include all of the following EXCEPT A) submitting to the replacing insurer a statement signed by the applicant as to whether or not he has existing life insurance B) splitting the commission with the agent who originally sold the policy being replaced C) leaving a copy or original of all solicitation material used for presentation to the applicant D) submitting to the replacing insurer a copy of all soliciting materials
Splitting the commission with the agent who originally sold the policy being replaced
Which annuity will generally provide the highest monthly income?
Straight life
All of the following are unfair claims settlement practices EXCEPT A) Suggesting negotiations in settling the claim B) failing to acknowledge pertinent communication pertaining to a claim C) failing to adopt and implement reasonable standards for settling claims D) refusing to pay claims without conducting a reasonable investigation
Suggesting negotiations in settling the claim
What would help prevent a universal life policy from lapsing?
Target premium
The premiums paid by the employer in a business life insurance policy are
Tax deductible by the employer
Any references to policy dividends must include a statement of?
That the dividends are not guaranteed
If policy owners repeatedly replace policies from the same agent, this is most likely evidence that
The agent knew that replacement was intended in connection with the sale and intentionally violated the replacement regulation
What happens if the annuitant dies while the annuity is still in the accumulation stage?
The beneficiary will receive the greater of the money paid into the annuity or the cash value
Who has the power to issue certificates of authority?
The commissioner of insurance
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The customer's associates, friends, and neighbors provide the report's data.
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
The employer is the owner and beneficiary
Who is responsible for the contents of life insurance advertising?
The insurer
Which of the following terms will be permissible in describing a life insurance policy in company advertisements?
Variable plan
What type of policy allows for flexible premium and a variable investment
Variable universal life insurance
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
What is the earliest a policy may go into effect
When the application is signed and a check is given to the agent
When would a 20-pay whole life policy endow?
When the insured reaches age 100
What product provides income for a specified period of years or for life, and protects a person against outliving their money?
an annuity
The death protection component of a universal life policy is expressed as what type of coverage?
annually renewable term
In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the
company
When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of
defamation
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?
discrimination
For a retirement plan to be qualified, it must be designed for whose benefit?
employees
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?
false advertising
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
false advertising
What type of premium do both Universal Life and Variable Universal Life policies have?
flexible
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an
interest-sensitive whole life
What is the major difference between a stock company and a mutual company
ownership
An insured committed suicide one year after his life insurance policy was issued. The insurer will
refund the premiums paid
Whenever agents submit applications to insurers, they must also submit statements, signed by the applicant and agent, disclosing the involvement of
replacement
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
twisting
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)
Equity indexed annuity
Which policy component decreases in decreasing term insurance?
Face amount
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
Family term rider
What is the function of a certificate of authority?
It allows an insurer to transact insurance in Georgia.
What is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection
What is the 10-day free-look privilege?
It permits the insured to return the policy for a full refund of premiums paid
The violation of a cease and desist order may result in a fine of
$10,000
In replacement, an existing insurers must provide policy owners with a policy summary for existing life insurance within how many days of receiving the written communication and replacement?
10 days
The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount?
100
What is the minimum age for purchasing a life insurance policy in this state?
15
What is the maximum period of time a temporary license can be in force?
15 months
The current interest rate on an equity indexed annuity is often based on
An index like standard and poors 500
What can have the least expensive first year premium?
Annually renewable term
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
Authorized
All of the following are true regarding the guaranteed insurability rider EXCEPT A) the insured may purchase additional coverage at the attained age B) this rider is available to all insured with no additional premium C) the insured may purchase additional insurance up to the amount specified in the base policy D) it allows the insured to purchase additional amounts of insurance without providing insurability only at specified dates or events
B) this rider is available to all insureds with no additional premium
All of the following are examples of violation of replacement EXCEPT A) failing to ask the applicant questions regarding placement B) any deceptive or misleading information C) Advising an applicant to answer questions correctly D) intentionally answering a question incorrectly
C
All of the following would be considered rebating EXCEPT A) an agent offers to share his commission with a policyholder. B) An agent offers true use of his lake house to a client as an inducement to buy an insurance policy from him C) An agent misrepresents policy benefits to convince a policy owner to replace policies D) an agent offers tickets to a baseball game as an inducement to buy insurance
C
Which of the following best describes the unfair trade practice of defamation? A) issuing false advertising material B) assuming the name and identity of another person C) making derogatory oral statements about another insurer's financial condition D) refusing to deal with other insurers
C
Which of the following would be considered a violation of life insurance advertising regulations? A) not guaranteeing dividends B) making oral sales presentations C) calling a variable insurance policy an investment plan D) Informing the applicant that the sole subject of the sale is insurance
C
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?
Cash surrender
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
All of the following are true about variable products except A) the minimum death benefit is guaranteed B) policy owners bear the investment risk C) the premiums are invested in the insurers general account D) The cash value is not guaranteed
The premiums are invested in the insurers general account
What is the purpose of life insurance solicitation regulation?
To help consumers compare life insurance products in regard to their relative cost
What term refers to the acts of soliciting insurance, making an insurance contract effective, and dealing with mattered arising from that contract?
Transacting insurance
What process do insurance companies use to determine whether or not a particular applicant is insurable?
Underwriting
What policy allows the policy ow we ti skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal life