Life Simulate Exam

Agents who change their state of residence must notify the superintendent within how many days of any change in address?

30 days

what is the waiting period for rate filing before each rate may become effective?

30 days

what is the penalty for IRA distributions that are below the required minimum for the year?

50%

According to the entire contract provision, what document must be made part of the insurance policy?

Copy of the original application

what happens when a policy is surrendered for its cash value

Coverage ends and the policy cannot be reinstated

When must an IRA be completely distributed when a beneficiary is not named?

December 31 of the year that contains the fifth anniversary of the owner's death.

Items stipulated in the contract that the insurer will not provide coverage for are found in the...

Exclusions clause. Exclusions are restrictions of coverage as stated in the policy.

What insurance concept is associated with the names Weiss and Fitch?

Guides describing company financial integrity

The MIB was created to protect...

Insurance companies from adverse selection by high risk persons.

Regarding the free-look provision, the insurance company...

Must allow the policyowner to return the policy for a full refund.

which of the following best describes gross annual premium?

Net premium plus expenses

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will...

Pay the policy proceeds only if it would have issued the policy.

Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?

Predicted needs of the family after the insured's death.

If an agent fails to obtain the applicant's signature on the insurance application, what must the insurer do?

Send the application back to the applicant for signature

Which of the following best describes taxation during the accumulation period of an annuity?

Taxes are deferred

which is true about a spouse term rider

The rider is usually level term insurance

Which of the following is an example of a producers fiduciary duty

The trust that a client places in the producer in regard to handling premiums

which of the following is true about warranties

They are guaranteed to be true.

which of the following is not true regarding equity indexed annuities

They earn lower interest rates than fixed annuities.

What is the purpose of a fixed period Settlement option?

To provide a guaranteed income for a certain amount of time

In an adjustable life policy all of the following can be changed by the policy owner except

Type of investment

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

Universal Life

Which of the following types of agent authority is also called perceived authority?

apparent

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

which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?

defamation

An applicant wants to buy a life insurance policy in which he can count on receiving the same benefits as stated in the contract. Which type should he buy?

fixed

the automatic premium loan provision is activated at the end of the...

grace period

A person filed a report about an insurance fraud practice. The person could be sued for civil damages by which of the following?

no one

Which of the following is not true regarding variable universal life policy?

the death benefit is fixed

Who is the owner and who is the beneficiary on a key person life insurance policy?

the employer is the owner and beneficiary

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?

unilateral

in Insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

unilateral

Which policy component decreases in decreasing term insurance?

Face amount

Under a 20 pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid...

For 20 years or until death, whichever occurs first.

Life insurance death proceeds are...

Generally not taxed as income

if a life policy allows the policy owner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a...

Guaranteed insurability rider

annually renewable term policies provide a level death benefit for a premium that...

Increases annually

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a...

Settlement option

an insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insureds age 100 is called...

Single premium whole life

which of the following types of risk will result in the highest premium?

Substandard risk

The waiver of cost of insurance rider is found in what type of insurance

Universal Life

Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?

reduction

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be...

Adjusted to the insured's age at the time of renewal.

Who can make a fully deductible contribution to a traditional IRA

An individual not covered by an employer-sponsored plan who has earned income

Which of the following is a true comparison between annuities and life insurance?

Both annuities and life insurance use mortality tables.

How are state Insurance Guaranty Associations funded?

By their members - authorized insurers

What does liquidity refer to in a life insurance policy?

Cash values can be borrowed at any time

which of the following is true regarding the spendthrift clause in life insurance policies

It can protect the policy proceeds from creditors of the beneficiary. The spendthrift clause in a life insurance policy prevents the beneficiary's reckless spending of benefits, and protects the policy proceeds from creditors of the beneficiary or policyowner.

Which of the following is true about the mandatory free look in a life insurance policy?

It commences when the policy is delivered

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.

If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?

It is only taxable if the cash value exceeds the amount paid for premiums.

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium

a married couples 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

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, During which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain

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 it?

Limited-Pay Life

which of the following is not considered a misrepresentation as it pertains to unfair trade practices?

Making comparisons between different policies

which of the following is true regarding a waiver of a surrender charge on an annuity contract?

The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days.

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 of the following are generally not considered when underwriting group insurance

The group's medical history

when a fixed annuity owner pays a monthly annuity premium to the insurance company, where is this money placed?

The insurance company's general account.

An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur?

The interest will continue to accumulate tax deferred.

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination

all of the following statements are true regarding installments for a fixed amount except

The payments will stop when the annuitant dies.

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

beneficiary

all of the following information about a customer must be used in determining annuity suitability except...

beneficiary's age

The cause of loss insured against in an insurance policy

peril

most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a...

premium receipt

which of the following insurance options would be considered a risk sharing arrangement?

reciprocal

if an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may...

require evidence of insurability