Life Producer Missed Questions
Any producer who changes their personal or business residence must generally notify the State Insurance Department within what period of time? a) 20 days b) 30 days c) 60 days d) 45 days
b
All of the following are dividend options available tin a participating life insurance policy, EXCEPT: a) reduced paid-up insurance b) paid-up additions c) cash d) reduce the premium
a
An IRA provides a mechanism fora person to set aside funds for retirement. Each of the following is true regarding an IRA, EXCEPT: a) a penalty is assessed for withdrawals after age 59.5 b) an IRA is used primarily for retirement income c) income received in later years is taxable as ordinary income d) contributions are deductible for qualified persons
a
An insurance engaging in an unreasonable restraint of trade has committed which of the following unfair practices? a) coercion or boycott b) twisting c) defamation d) misrepresentation
a
An insurer must provide to each insured a confidentiality statement with regard to privacy issues within which of the following time frames? a) annually b) biennially c) every 3 years d) every 5 years
a
Domestic insurance companies must be audited or examined by the Commissioner or Superintendent of Insurance on a regular basis in order to determine which of the following? a) insurer solvency b) insurer production levels c) insurer capitalization d) reserve allocations
a
Statement made by an applicant for insurance are recorded on the application are: a) true to the best of their knowledge b) warranties c) guarantees d) waivers
a
When an individual receives a qualified distribution from a Roth IRA, the benefit received is: a) tax-free b) taxable as ordinary income c) taxable as a long-term gain d) taxable as a short-term gain
a
Which of the following are not generally governed by replacement regulations? a) group life insurance b) limited pay life insurance c) universal life insurance d) term life insurance
a
Which of the following licensed individuals may provide insurance advice to a customer for a stipulated fee? a) a consultant or adviser b) an insurance producer c) a broker d) an adjuster
a
Which of the following statements is true regarding market value adjusted annuity? a) it is not linked to an index b) it is linked to an index c) it is a form of variable annuity d) it is a permanent insurance product
a
A Modified Endowment Contract is a permanent insurance policy whose premiums paid for it are not in proportion to its death benefit. Each of the following distributions will be subject to taxation in a MEC, EXCEPT: a) a loan against the policy's cash value b) death benefit c) cash distributions from the policy d) the policy's cash surrender value
b
A life insurer's promise to pay the death benefit is found in which of the following provisions? a) entire contract b) insuring provision c) non-forfeiture provision d) settlement option provision
b
A producer may be a licensed individual who represents themselves and acts on behalf of: a) a surplus lines insurer b) an insured c) an unauthorized insurer d) a non-admitted company
b
A salary continuation plan is also referred to as a: a) qualified plan b) non-qualified deferred compensation plan c) an entity plan d) a cross-purchase plan
b
Arthur signed an application for a $200,000 life insurance policy on June 12th and took a required medical exam on June 14th. He gave the producer the initial premium and received a conditional receipt at the time of the application. The home office approved the policy and sent it to the producer on June 29th and the producer delivered the policy to Arthur on July 2nd. Arthur's insurance protection actually began on: a) June 12 b) June 14th c) June 29th d) July 2nd
b
Mutual insurers issue participating policies which in turn may pay dividends. Which of the following is a dividend option provided to the policy owner of a "par" policy? a) cash surrender b) reduce the premium c) reduced paid-up insurance d) interest only
b
The Taxpayer Act of 1997 resulted in the creation of a Roth IRA. Each of the following are characteristics of a Roth IRA, EXCEPT: a) contributions may continue beyond age 72 b) contributions are tax-deductible c) distributions may be deferred past age 72 d) qualified distributions at the time of retirement are not taxed as income
b
Twisting is a form of misrepresentation. Which of the following is considered a form of twisting? a) a producer offers something of value not listed in the policy b) a producer makes an illegal inducement to influence the surrender of a policy c) failing to provide claim forms in a timely fashion d) representing oneself as a producer when in fact they r not
b
Which of the following policies is best suited to provide funds to pay for taxes due and other administrative expenses with regard to a deceased's estate? a) joint life insurance b) survivor life insurance c) modified life insurance d) an endowment at age 65
b
Which of the following types of insurance carrier is formed without any capital stock? a) stock company b) mutual company c) foreign company d) authorized company
b
An insurance adviser may also be referred to as: a) a broker b) a consultant c) an agent d) an attorney
b -- also a counselor or analyst
Intentional deception can most closely be associated with which of the following terms? a) falsification b) fraud c) misrepresentation d) concealment
b -- concealment or misrepresentation may or may not involve intentional deception
Which of the following is true regarding dividends paid by a permanent Iife insurance policy? a) they are taxed as ordinary income b) interest earned on dividends is taxable c) they are tax-deductible d) dividends plus interest are tax-deductible
b-- dividends are tax-exempt but if left with the insurer to accumulate interest, the interest is taxable as ordinary income
An individual has been licensed for 2 years. He then adds an additional line of authority to his license. When will he be permitted to begin soliciting the new line of insurance? a) as soon as a passing grade is received on the State exam b) upon license renewal c) immediately upon processing the appropriate paperwork d) at the end of the current license period
c
An insured covered by a life isnruacne policy proceeds are payable to the beneficiary. The beneficiary is receiving $1,200 per month for an indefinite period of time. This is an example of which of the following? a) fixed period installment option b) life income settlement option c) predetermined income amount settlement option d) interest only settlement option
c
Federal and State death taxes must be paid within how many months of the decedent's death? a) 6 months b) 8 months c) 9 months d) 12 months
c
Which of the following is a dividend option? a) surrender for cash b) extended term insurance c) one year term insurance d) fixed amount
c
Which of the following is not a dividend option? a) accumulate at interest b) reduce the premium c) reduced paid-up insurance d) cash
c
Which of the following is not a penalty assessed a producer who engages in an unfair sales or marketing practice? a) license suspension or revocation b) imprisonment c) community service d) monetary fine
c
A rider or amendment attached to a life insurance policy is part of the: a) incontestable provision b) owner's rights c) face page of the policy d) entire contract
d
Group plan sponsors may include all of the following, EXCEPT: a) employer groups b) Labor Unions c) customer groups d) self-employed individuals
d
Which of the following statements is true with regard to a Universal Variable life insurance policy? a) it is a fixed premium policy b) it is an investment product c) it is a securities product d) it is a securities and investment product
d -- has a cash savings value that is invested in the market
Which of the following agency names may be used by a licensee who wishes to open their own office? a) Smith Brokerage b) J.J. Smith Insurance Agency c) Smith Agency Inc. d) John J. Smith Insurance
d -- the name that appears on their insurance license must be used unless received written permission from the Insurance Department
A whole or straight life policy with a cash savings feature includes non-forfeiture options. Which of the following options will provide the PO with a smaller face amount of insurance for life? a) reduced paid-up insurance b) extended term insurance c) paid-up additions d) lump sum
a
An adjustable life insurance policy provides the policy owner the flexibility a) change the face amount at various intervals b) adjust cash values on an annual basis c) change the interest rate paid on the cash value each year d) reduce the premium at various intervals
a
Which of the following is characterized by the least expensive premium? a) decreasing term life b) modified life c) an annuity d) single premium life insurance
a -- no cash value or equity build up
According to a permanent insurance policy's non-forfeiture options, a policy may not lapse when cash value is present. All of the following are types of these non-forfeiture options, EXCEPT: a) one-year term insurance b) cash surrender c) extended level term insurance d) reduced paid-up insurance
a -- this is a dividend option
In order for a contract to be legal, there must be present a valid offer and acceptance. Which of the following illustrates an acceptance of an offer to contract for insurance? a) policy delivery b) application submission c) underwriting rejection d) application acceptance
a-- policy issuance and delivery are both indications
A premium receipt is provided to an applicant by the producer when an initial premium is collected at the time of application. Which of the following statements is true regarding a "conditional receipt"? a) the receipt indicates that coverage is provided immediately when pmt is received b) the receipt provides coverage on a date earlier than the issue date of the policy c) the receipt is also known as a binding receipt d) the receipt states that coverage will become effective once a physical exam is completed
b
Which of the following provides a combination of level renewable term insurance and cash value fund? a) variable life b) universal life c) annual renewable term life d) annuity
b
A whole life policy combines permanent protection and cash savings. Which of the following is characterized by the quickest cash value buildup? a) a modified life policy b) an endowment c) an immediate annuity d) a limited payment life policy
b -- quicker cash buildup other than a single premium life insurance policy
Tom owned a whole life policy for 30 years before surrendering it for the $26,000 cash value. During the life of the contract, Tom paid $32,000 in premiums. Which of the following statements is true with regard to this insurance plan? a) The LIFO rule applies to this transaction b) The $26,000 is received tax-free c) the $26,000 received is taxed as ordinary income d) the difference between the cash surrender value and cumulative premiums paid is taxable
b -- taxable event occurs if the surrender value exceeds the cumulative total of premiums paid
Cash value life insurance includes nonforfeiture benefits. Which of the following is such a benefit that appears in a permanent life insurance plan, whether issued to cover an individual or an eligible group? a) paid-up additions b) surrender for cash c) executive term d) reduce the premium
b -- there benefits are cash surrender, extended term insurance, and reduced paid-up
A reinstatement provision is generally included in all life insurance policies issued for deliver. If a policy owner applies for reinstatement after a policy lapse, the insurer will require the completion of a reinstatement application. Statements made on this application are contestable for what period of time? a) 4 years b) 3 years c) 2 years d) 1 year
c
All of the following are examples of unfair trade practices, EXCEPT: a)coercion b) making misleading statements with respect to the business of insurance c) furnishing required disclosure information d) unfairly discriminating with regard to premium rates and plans of insurance
c
A variable life policy is characterized by investing cash values in stocks, bonds, and mutual funds. Which of the following statements is not true concerning this form of life insurance protection? a) the amount of the variable life death benefit is dependent upon the performance of securities b) variable life provides a guaranteed minimum death benefit c) variable life cash values are deposited in a separate account d) variable life includes a flexible premium
d
Each of the following are included in an insured's estate for Federal Estate tax purposes, EXCEPT: a) an annuity b) a life insurance policy c) the insured's residence d) a motor vehicle
d
Which of the following insurance plans allows the PO to increase coverage every year? a) whole life b) limited pay life c) annual renewable term life d) universal life
a
A producer who uses health insurance premiums collected for his own personal use has engaged in: a) larceny b) rebating c) defamation d) illegal inducement
a
All of the following are considered to be insurance transactions, EXCEPT: a) filing a claim b) contract issuance c) delivery of an insurance policy d) collection of premiums
a
If an individual makes a pmt to fund an annuity contract today and the benefit commences 30 days later, which of the following contracts has been purchased? a) fixed annuity b) immediate annuity c) deferred annuity d) life annuity
b -- no accumulation period and once it is purchased, a monthly pmt begins around 30 days after purchase. best suited for someone who needs immediate income like someone totally disabled
A direct writing insurer markets insurance policies through: a) brokers b) vatical providers c) employees who are licensed as captive producers d) exclusive agency managers
c
Applications of coverage are usually accompanied by an initial premium. An applicant who submits an application to the insurer without an initial premium has; a) made an invitation b) made an offer c) offered an acceptance d) accepted an offer
a
Replacement is a transaction in which a new life insurance policy is to be purchased and due to this purchase, an existing life insurance policy has or will be lapsed, forfeited, surrendered or terminated. Which of the following would not be considered a replacement? a) a policy continued as decreasing term insurance b) a policy converted to extend term insurance c) a policy reissued with any reduction in cash value d) a policy pledged as collateral
a
Which answer best describes the term risk exposure? a) a measure of how likely it is that some event will occur b) the chance of financial loss c) the predictability of a loss d) the acceptance of too many claims
a
Which of the following best describes a producer providing an incomplete comparison of policies in order to persuade an individual to lapse an existing policy voluntarily a) twisting b) defamation c) larceny d) coercion
a
Which of the following best describes how an insurance company receives an application for life insurance? a) the producer submits it directly to the insurer b) the proposed insured submits it directly to the insurer c) the applicant submits it directly to the insurer d) the beneficiary submits it directly to the insurer
a
Which of the following best describes the doctrine of reasonable expectations? a) an insured is entitled to the coverage that they may except b) an insured wishes to incorporate to transfer risk c) an insured relies on a statement made by a producer d) an insured suffers harm due to a producer misrepresentation
a
Which of the following may be used to fund an individual retirement? a) flexible premium annuity b) whole life policy c) universal life policy d) life paid-up at 65 policy
a
Which of the following was designed to reduce or prevent the purchase of whole life insurance for the purpose of short-term investment gain? a) seven-pay test b) The Tax Reform Act of 1987 c) the one-sixth rule d) exclusion ratio
a
premiums paid on individual forms of life insurance are: a) not tax-deductible b) tax deductible c) non income taxable d) income taxable
a
In order for an insurance policy to be legal, there must be a valid offer and acceptance present. The offer is usually made in which of the following instances? a) when the application is submitted to the underwriting department b) when the policy is issued by the underwriting department c) when the insurer approves the application d) when the policy is delivered to the PO by the producer
a -- consumer must make an offer to the insurer and insurer accepts, reject or makes a counteroffer. The consumer's offer consists of the submission of the application and the initial premium
Which of the following types of life insurance is characterized by a corridor? a) universal life b) term life c) variable life d) whole lif
a -- corridor is the amount of pure insurance protection above the gas value
Which of the following is not a responsibility of a field underwriter? a) issue a policy b) complete applications c) collect premium d) provide a premium receipt to an applicant
a -- issuance is responsibility of home office underwriters
In order for a policy owner to assign their policy to another party, which of the following must be done? a) the owner must receive written permission from the insurer b) the owner must receive a written request from the assignee c) the owner must notify the insurer d) transfer of ownership is not permitted
a -- known as an absolute assignment. Assigning one or some rights but not all to another party is called collateral or conditional assignment
Insurance transfers risk from an individual to an insurer. Each of the following statements is true concerning the concept of insurance, EXCEPT: a) insurance is the exclusive method used to manage risk b) insurance transfers risk from one to many c) insurance is a risk management method that finances an insured's loss exposures d) insurance involves the pooling of premiums in order to pay claims
a -- other methods include avoidance, retention, reduction and sharing
Which of the following accurately describes an equity indexed annuity? a) it is a form of non-variable annuity b) it is a permanent insurance product c) it is a registered investment product d) it is a form of variable annuity
a -- owner receives a guaranteed min interest rate and account assets are tied to an index
According to the Uniform Simultaneous Death Act, when an insured and primary beneficiary are killed in a common disaster and it is not known who died first, what does the policy presume? a) the beneficiary survives the insured b) the insured survives the beneficary c) the beneficiary and the insured are presumed to have died simultaneously d) the insured predeceased the beneficiary
b
All of the following statements are true regarding a representation, EXCEPT: a) representations appear on an insurance application b) a representation of a fact is the same as expression of opinion or attitude c) a policy is usually voidable is a material fact is misrepresented d) representations may be oral or written
b
An annuity is similar to a whole life policy in that both require prepaid financianing in order for the contracts to function appropriately. Which of the following best describes another common trait between an annuity and a life insurance policy? a) both provide a specified death benefit b) both may include a designated beneficiary c) both require proof of insurability d) both contracts will be executed once a physical exam is take by the applicant
b
An annuity that makes payments for life but also guarantees benefits for a specific number of years is known as a: a) level premium deferred annuity b) straight life annuity with period certain c) installment refund annuity d) joint and survivor annuity
b
An insurance company that legally operates in this State and has been issued a certificate of authority but whose principal office is located in another country is known as: a) a foreign insurer b) an alien insurer c) a domestic insurer d) a surplus lines insurer
b
For universal life policy's cash value accumulations to receive favorable tax treatment, a specific percentage of premiums must be used to purchase: a) paid-up additions b) death benefit c) one year term insurance d) guaranteed amounts of coverage
b
If an individual desires life insurance protection and cash value buildup and is willing to pay premiums until retirement, what the of policy would they purchase? a) an annuity b) limited payment life c) an endowment at age 55 d) straight life
b
If an insurer terminates a producer who has acted on its behalf in the same of insurance products, the insurer will: a) revoke the producer's license b) cancel the producer's appointment c) suspend the producer's license d) terminate the producer's commission
b
In order for the waiver of premium benefit rider to be activated, which of the following must occur? a) the insured must be partially disabled b) the insured must be under care of a doctor c) the insured must die prematurely d) the insured must file a claim form with the insurer
b
It is the fiduciary responsibility of a producer to account for all funds collected from a consumer. If a producer does not remit a renewal premium to the insurer, which of the following will occur? a) the producer will be prosecuted by the Insurance Commissioner b) Coverage will not lapse since pmt to a producer is pmt to the insurer c) the producer will have to attend an ethics course d) coverage will lapse since the premium was not paid
b
To avoid any penalties or adverse tax consequences, rollovers of qualified plans must be effected within how many months of withdrawal? a) 1 month b) 2 months c) 3 months d) 60 months
b
Which of the following protects an individual against superannuation? a) straight life policy b) life annuity c) fixed annuity d) interest sensitive whole life
b
A life insurance policy is comprised of numerous provisions. Which of the following protects a beneficiary from creditors when proceeds at death are left with the insurer? a) premium payment provision b) spendthrift provision c) beneficiary provision d) settlement option provision
b -- also prevents any entity from attaching a lien or any other encumbrance to the policy proceeds
Which of the following individuals possesses the legal capacity to enter into an insurance contract? a) a person who is insane b) a minor contracting for food and clothing c) an enemy alien d) an individual addicted to narcotics
b -- do not possess legal capacity unless they are using it for necessities like food, clothing, and shelter
Life insurers issuing participating policies may pay dividends to policy owners from surplus. All of the following are dividend options available to policyholders of such life insurance policies, EXCEPT: a) accumulate at interrest b) extended term insurance c) reduced premium payments d) paid-up additions
b -- extended term is a non-forfeiture option. Other dividend options are cash and one year term insurance
Which of the following is designed to protect life insurance beneficiaries against the insolvency of an insurer? a) Bureau of Insurance b) Guaranty Association c) Standard & Poor's Index d) Department of Education
b -- protects up to a certain amt
Whole life policies include several non-forfeiture value or options. What non-forfeiture option in this policy provides the greatest face amount of life insurance protection if selected? a) reduced paid-up insurance b) extended level term insurance c) surrender for cash d) fixed term option
b -- provides the policy owner with level term insurance in the same face amount as the whole life plan being surrendered
An individual frantically searching for insurance protection the day after being diagnosed with a terminal illness best describes: a) inadequate financial planning b) confrontational selection c) adverse selection d) insurable interest
c
Each of the following statements is true with regard to the modifications made to an existing life insurance policy, EXCEPT: a) the change or modification must be attached to the policy b) the change must include the signature of a company officer c) the change must be countersigned by the agent d) the change must be in writing
c
Examination expenses incurred when the Commissioner decides to a audit an insurer will be the responsibility of which of the following? a) licensed poducers b) insurance department c) the insurer being examined d) the commissioner's office
c
Group conversion to an individual plan must take place within what period of time following employment termination. a) 30 days b) 31 weeks c) 31 days d) 60 days
c
In which of the following situations would insurable interest exist? a) a former employee and his employer b) an individual's grown married child c) a married couple who is wealthy d) parents who are separating
c
Insurance producers are required to act in a fiduciary capacity when transacting insurance with consumers. Which of the following is an example of a producer's fiduciary responsibility? a) conducting an annual review of policies and coverages b) offering advice to a consumer c) submitting premiums to insurers along with applications d) assisting a client when filing a claim
c
The Sloppy Slanger Corporation is comprised of five partners. If it wishes to enter into an entity type of buy-sell agreement funded potentially by life insurance, how many policies need to be produced? a) 3 b) 6 c) 5 d) 4
c
Tom buys a deferred annuity. If he surrenders it prematurely he will receive a penalty of: a) a constant percentage each year b) an increasing percentage each year c) a decreasing percentage each year d) a flat fee each year
c
Which of the following is income taxable as ordinary income? a) estate taxes b) death benefit c) interest paid on life insurance proceeds d) return of principal
c
The annuity phase is also referred to as which of the following? a) the maturity period b) the non-forfeiture period c) the pay-out period d) the pay-in period
c -- begins when contributions cease and upon receipt of the initial periodic payment. Annuitant receives a combination of principal and interest each month
John owns a ten pay life plan. Premiums for this policy must be paid: a) for 10 years b) until John retires c) for ten years or until death, whichever occurs first d) until the first spouse dies
c -- coverage is provided for life though
Which of the following will occur if an application for insurance includes some unanswered questions and the policy is still issued? a) the owner must pay a higher premium b) the insurer will request a warranty from the policy owner c) the insurer has waived the right to require an answer to the questions d) the contract will be void
c -- engaged in a waiver
Which of the following is the primary advantage of the automatic premium loan a) extends the policy grace period b) automatically transfers funds from the policy owner's bank to the insurer c) keeps the policy in force when premiums are due and have not been paid d) provides a low interest loan in the event of an emergency
c -- only available to owners of whole life policies since it only functions if there is a cash value present
When must a Buyer's Guide be provided to an insurance applicant? a) anytime after the home office underwriting begins b) at time of application just after premium collection c) at time of application prior to premium collection d) not later than time policy deliver
c -- provides generic description of the various types of policies, outlining possible advantages and disadvantages of insurance contracts in general
Insurable interest in life insurance must exist: a) at the time of submission b) at the time of loss c) at the time of application d) at the time of deliver
c -- refereed to as financial or economic interest
Bill has a $200,000 whole life policy with a $50,000 AD&D rider. Also attached is an accelerated benefits rider. A couple of years later Bill is terminally ill and receives $25,000 from the policy. 6 months later he dies. What will the beneficiary receive? a) $0 b) $150,000 c) $175,000 d) the principal sum
c-- if an accelerated benefit rider pays a benefit to a terminally ill insured and the insured later dies, the prepaid benefit is subtracted from the DB and remainder is paid to beneficiary
Dividends paid by a life insurance policy are tax-exempt. Each of the following are true regarding dividend options, EXCEPT: a) the dividend may be used to purchase paid-up additions of permanent insurance b) the dividend may accumulate at interest which is taxable c) the dividend may be used to pay part of the premium d) the dividend is subject to taxation as ordinary income if taken in cash
d
If a death claim is submitted to an insurer while there is an outstanding loan against the whole life policy: a) the insurer will hold the proceeds until the loan is repaid b) the amount of the loan will be deducted from the proceeds c) the entire death benefit will be paid to the beneficiary d) the amount of the loan plus any interest due will be deducted from the death benefit
d
If a insured purchases a decreasing term life insurance policy, what portion of the contract decreases? a) the non-forfeiture values b) the cash values c) the annual premium d) the death benefit
d
If a premium is not paid at the time an application for life insurance is completed, when will coverage go into effect? a) as of the date of the conditional premium receipt b) when the application is approved and the policy is issued c) at the time of application d) when the producer delivers the policy and collects the premium
d
In most states, a temporary license may be issued by the Commissioner or Superintendent of Insurance to eligible individuals for an initial period of up to: a) 60 days b) 90 days c) 365 days d) 180 days
d
Premiums for policies covering multiple insureds, such as a survivorship life plan, are based upon which of the following? a) the bilateral enhancement of both proposed insureds b) the youngest insured c) the oldest insured d) the joint probabilities of both proposed insured
d
Several life insurance benefit riders are available to a policy owner for an additional premium. Which of the following is true concerning the payor benefit rider? a) it stipulates that the insured child pay premiums when he or she reaches age 15 and 6 months b) it pays a beneficiary the face amount if the insured dies as a result of an accident c) it waives premiums until age 30 if the parent of the child becomes disabled d) it waives premiums until age 21 if the child's guardian dies
d
The Fair Credit Reporting Act states that an applicant for insurance must be notified: a) of the eligibility of the proposed insured b) of the details of an investigation on the applicant c) of the insurability of the proposed insured d) of any investigative report ordered by the insurer
d
When a producer completes an application and collects the initial premium, they must leave a premium receipt with the applicant. A conditional premium receipt states that coverage is effective: a) when the policy is issued b) as of the date of the application is approved by underwriting c) when the policy is delivered d) as of the date of receipt if the application is approved
d
Which of the following best describes a pure or straight life annuity with ten years certain? a) the annuitant must make pmts for 10 years after the contract matures b) the annuitant or his survivor is guaranteed 10 years of benefits c) the annuitant will be paid for 10 years and then income ceases d) the annuitant or his survivor is guaranteed 10 years of pmts and if the annuitant survives 10 years, pmts continue for the lifetime of the annuitant
d
Which of the following best describes a return of unused premiums to a policy owner from a whole life insurance contract? a) a cash surrender b) a capitalized refund c) a flat rate d) dividend
d
Which of the following best describes the method selected by a PO to pay policy premiums? a) declination b) declaration c) estoppel d) mode
d
Which of the following contract characteristics requires both the insurer and the policy owner to satisfy certain aspects before the contract can be executed? a) a contract's executory nature b) a contract's unilateral nature c) a contract's aleatory nature d) a contract's conditional nature
d
Which of the following provisions places limitations on an insurer's or producer's authority to waive a provision in an insurance contract? a) reinstatement provision b) grace period provision c) incontestable clause d) entire contract provision
d
A surplus lines insurance carrier is also referred to as a: a) non-concurrent insurer b) authorized insurer c) admitted insurer d) non-admitted insurer
d -- also called an unauthorized insurer
Which of the following receipts provides coverage for an insured immediately upon the payment of the premium? a) insurability receipt b) conditional receipt c) approval receipt d) binding receipt
d -- also called an unconditional receipt
A public adjuster represents: a) a broker b) a general agent c) a beneficiary d) a policyowner
d -- attempt to determine the amount of property loss
A married couple jointly own a business. The wife decides to purchase life insurance on her husband and names herself as the primary beneficiary. What type of life insurance has the wife purchased? a) buy-sell agreement b) deferred compensation c) business overhead expense insurance d) ordinary life
d -- buy-sell agreement thats funded with ordinary life insurance (buy-sell is not an insurance policy)
When an insurance producer sells insurance over the phone or through the mail, he or she is engaging in which of the following? a) independent marketing b) surplus lines marketing c) Industrial insurance marketing d) direct response marketing
d -- involves direct mail, television or radio advertisements, or telemarketing
Which of the following policies is characterized by the lowest initial annual premium? a) whole life policy b) thirty-pay whole life c) ten-pay life d) modified whole life
d -- lower premium in the first few years then increases to an amt higher than the whole life policy and remains constant for life
Nonforfeiture options provide a policy owner with each of the following choices, EXCEPT: a) using the cash value to purchase reduced paid-up insurance b) using the cash value to buy extended term insurance c) surrendering the policy for the cash value d) using the cash value to fund the automatic premium loan
d -- only found in cash value policies
Settlement options available to a beneficiary allow for the disposition of proceeds from a life insurance contract. Which of the following options available to a beneficiary possesses the greatest degree of risk? a) fixed period option b) lump sum option c) at interest option d) life income option
d -- pmts continue until the annuitant dies. If annuitant doesn't life to life expectancy, they don't receive the value of the contract
The interest rate paid annually on a Universal Life policy is generally based on a type of index or money market rates. Which of the following is correct with regard to the cash value portion of this policy? a) it is guaranteed for life b) it accumulates on a tax-free basis c) it builds faster than other whole life policies d) it is fixed or guaranteed for the policy year
d-- interest rate is fixed or guaranteed and may change each year
Which of the following life insurance policies generally covers 2 lives only? a) whole life b) joint and survivor life c) variable life d) survivorship life
d-- joint can cover more than 2 lives
