Life Prac Exam 8
When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?
Fixed amount
A tax-sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only.
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
Dividends from a mutual insurer.
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.
How long are the free-look periods provided during policy replacement?
20 days
All of the following statements are true regarding tax-qualified annuities EXCEPT
Employer contributions are not tax deductible.
A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?
Joint and survivor
What kind of policy allows withdrawals or partial surrenders?
Universal Life
Which of the following features of the Indexed Whole Life policy is NOT fixed?
Cash value growth
Which of the following types of insurance policies is most commonly used in credit life insurance?
Decreasing term
In Modified Life policies, what happens to the premium?
It is level at the beginning and increases after the first few years.
Which of the following best describes annually renewable term insurance?
It is level term insurance.
What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy?
Modified life
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
What determines the penalty for surrendering a market value adjusted annuity prematurely?
The current interest rate at the time of surrender
Life settlement brokers or providers are required to give the owner a separate disclosures document no later than what date?
The date of application
Which of the following is true regarding a market value adjusted annuity?
The owner is guaranteed a fixed interest rate for a specific period of time.
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.
Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?
A minor son of the insured
In most instances, a variable contract must be on file with the Commissioner before it may be issued. However, this can be avoided if the insurer is affiliated with an admitted life insurance company that has issued variable contracts for at least
3 years.
Following the initial licensing period, how many hours of continuing education are required of licensees?
45
An insurer used fraudulent representations to procure the payment of premiums. What sort of punishment does she face?
A fine of between $100 and $1,000 or imprisonment for up to 1 year
Which of the following produces evaluations of insurers' financial status often used by state departments of insurance?
AM Best
J transferred his life insurance policy to his son two years before his death. Which of the following is true?
The entire face value of the policy will be included in J's taxable estate.
Which is true about a spouse term rider?
The rider is usually level term insurance.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
