Life Insurance License
What is the maximum number of continuing education hours a producer is permitted to carry over from one renewal period to the next?
12
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?
2 years
Which of the following will NOT be a violation of the Unfair Competition Law?
A bank requiring a borrower to insure the mortgaged property
Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?
A policy summary
Which of the following is NOT a type of group eligible for group life insurance?
A social group
Jeff is 45 years old and currently owns life insurance, but is considering purchasing a new Universal Life policy. Which of the following scenarios would NOT involve replacement?
Allowing his one-year Term policy to expire
In insurance, an offer is usually made when
An applicant submits an application to the insurer
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?
Annuity certain
Which of the following is the basic source of information used by the company in the risk selection process?
Application
If a complaint has been filed against a producer who has been implicated in an unfair trade practice, the Commissioner will hold a hearing. When must the producer be notified of the charges?
At least 5 days prior to hearing
What license or licenses are required to sell variable annuities?
Both a life insurance license and a securities license
All of the following are personal uses of life insurance EXCEPT
Buy-sell agreement
Which of the following components must a life insurance policy have to allow policy loans?
Cash value
If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to
Charge a higher premium
If a company transacts any business of insurance without a certificate of authority, what is the maximum penalty that can be charged to the director of that company?
Civil penalty of $25,000
A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases an insurance policy from the bank in the amount of the loan. This is an example of
Coercion
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?
Consumer report
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated
The term "fixed" in a fixed annuity refers to all of the following EXCEPT
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
Which of the following will NOT be considered unfair discrimination by insurers?
Discriminating in benefits and coverages based on the insured's habits and lifestyle
All of the following statements concerning dividends are true EXCEPT
Dividend amounts are guaranteed in the policy
All of the following information about the applicant is identified in the General Information section of a life insurance application EXCEPT
Education
Which branch of government is responsible for enforcing laws?
Executive
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
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?
Fixed amount
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
Fixed period
If taken as a lump sum, life insurance proceeds to beneficiaries are passed
Free of federal income taxation
Which of the following limited lines producer's licenses would require life producer's prelicensing education and examination?
Funeral director insurance
Which of the following would NOT be considered rebating?
Giving a client a $20 pen with the insurer's logo during the insurance application process
Which of the following can remove the Insurance Commissioner from office?
Governor
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
An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?
If the primary beneficiary predeceased the insured
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
Illegal
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die
What do individuals use to transfer their risk of loss to a larger group?
Insurance
According to the law of agency, a producer always represents the
Insurance Company
Who must be licensed to sell, solicit and negotiate insurance contracts in the state of Indiana?
Insurance producer
Who makes up the Medical Information Bureau?
Insurers
State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT
Inviting prospective clients to the grand opening of the company's new office
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?
It does not guarantee that the entire principal amount will be paid out
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate
Which of the following is TRUE regarding the accumulation period of an annuity?
It is a period during which the payments into the annuity grow tax deferred
In which of the following situations is it legal to limit coverage based on marital status?
It is never legal to limit coverage based on marital status
Which of the following is true about the premium on the children's rider in a life insurance policy?
It remains the same no matter how many children are added to the policy
Which of the following statements is TRUE concerning the Accidental Death Rider?
It will pay double or triple the face amount
All of the following could be reasons for issuing a temporary producer's license EXCEPT
Licensing of new insurance producers after the business has been transferred
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?
Monthly premium waiver and monthly income
Death benefits payable to a beneficiary under a life insurance policy are generally
Not subject to income taxation by the Federal Government
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
Nothing; the payments will cease
According to the Life Insurance Advertising Rule 13, all of the following statements are correct EXCEPT
Only written presentations by the producers are considered advertising
Which of the following riders would NOT cause the Death Benefit to increase?
Payor Benefit Rider
All of the following are true regarding insurance policy loans EXCEPT
Policy loans can be made on policies that do not accumulate cash value
If the policyowner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights?
Policyowner
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
The Life Insurance Solicitation Regulation, Rule 24, was promulgated to do the following:
Provide information regarding insurance products
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it is in the best interest of the client
A producer licensed in another state wants to become a nonresident producer in Indiana. The other state gives the same privileges to Indiana producers as it does to its own producers. Indiana, therefore, extends the licensing privileges to the prospective producer of the other state. What is this called?
Reciprocity
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
Replacement rule
When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy, as well as a refund of all of the premiums paid. Which rider is attached to the policy?
Return of premium
Which of the following best details the underwriting process for life insurance?
Selection, classification, and rating of risks
All of the following are considered unfair trade practices in the business of insurance EXCEPT
Sharing Comissions
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
Survivor protection
All of the following would be different between qualified and nonqualified retirement plans EXCEPT
Taxation on accumulation
Which of the following would provide an underwriter with information concerning an applicant's health history?
The Medical Information Bureau
According to the Solicitation Rule 24, what two documents must be presented to an applicant during the application process?
The Policy Summary and the Buyer's Guide
An insurer may disclose an applicant's AID/HIV test results to all of the following EXCEPT
The applicant's previous insurer
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
The beneficiary
The annuitant dies while the annuity is still in the accumulation stage. Which of the following is TRUE?
The beneficiary will receive the greater of the money paid into the annuity or the cash value
Which of the following is true under Rule 48: Accelerated Death Benefits?
The benefit may be triggered by a terminal illness
The policyowner 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
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
The insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
All of the following are true of key person insurance EXCEPT
The plan is funded by permanent insurance only
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?
The policy will be interpreted as if the insurer waived its right to have an answer on the application
When a producer is trying to reinstate a lapsed license, what kind of fees would he be required to pay?
The producer will have to pay a penalty 3 times the unpaid renewal fees
How long does the Commissioner serve in office?
There is no specified length of term; the Commissioner serves at the pleasure of the Governor
What is the purpose of key person insurance?
To lessen the risk of financial loss because of the death of a key employee
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal Life
All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT
Upon conversion, the death benefit of the permanent policy will be reduced by 50%
Which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value?
Variable universal life
All of the following are true regarding viatical settlement regulations in Indiana EXCEPT
Viatical contracts allow for a 10-day free-look period
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
What is the primary purpose of a 401(k) plan?
retirement
What is the maximum civil penalty for willfully and knowingly violating a cease and desist order?
$50,000 per violation
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?
$9,800