NC Insurance Agent Life

An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax-free rollover?

$8,000, 60 days

B just bought a new car, which he anticipated will be paid for 4 years from now. He also wants to buy a life insurance policy, but is financially limited until the car is paid off. Which of the following types of policies would be best for B?

Modified Life

Universal Life

A combination of a flexible premium and adjustable life insurance.

During which of the following annuity periods does an insured make monthly contributions to the annuity for retirement purposes?

Accumulation period

Your customer doesn't mind paying a higher premium as long as he gets a life insurance product that would allow for a faster growth of the cash value. What kind of policy would you recommend?

An endowment policy

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

A Return of Premium term life policy is written as what type of term coverage?

Increasing

Universal Life Option B

Increasing death benefit (insurance amount plus cash account)

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

An agent is completing an application of insurance for a client. The agent is required to provide the client a "notice of information practices" at all of the following times EXCEPT

No notice is ever required at the initial completion of an application

Which of the following can surrender a deferred annuity contract?

Only the annuity owner

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider

Interest Sensitive Whole Life

Premiums vary to reflect the insurer's changing assumptions with regard to death investment and expense factors.

An individual wants to purchase a life insurance policy. His agent asks if the transaction will involve replacing any existing life insurance policies. If the customer replies, "Yes," which of the following best describes the agent's next step?

The agent must provide replacement notice to the applicant

Graded Whole Life

Under a typical graded premium life insurance policy, the premium increases yearly for a stated number of years, then remains level. Premiums continue to stay level for the remainder of the policy. For example, a policy can start out low in a graded whole life and increase a small amount every year up until the fifth year, then levels off for the remainder of the policy.

All other factors being equal, the least expensive first-year premium payment is found in

annually renewable term

Insurer must provide buyer's guide and a policy summary to all prospective purchasers

before accepting initial premium deposit

The interest earned on policy dividend is

taxable

Whole Life (ordinary life)

Protects for the whole life. Assumes premiums will be paid for the entire life time. -permanent protection, level premium, combines savings with protection -Premiums are higher than term, generally not flexible

What is a foreign insurer?

An insurer with a home office in another state

Variable Annuity

Annuity that has a varying rate of return based on the mutual funds in which one has invested

Types of Annuities

fixed, variable, equity-indexed

Viatical Settlements

individuals with terminal illness or severe chronic illness sell their life insurance policies to viatical companies who then become the policyowners. They must pay anywhere from 50 to 80 percent of the policy's face value.

Each insurer must maintain a complete file containing one copy of each authorized document and form used in life insurance solicitations for

3 years

Fixed Annuities

A type of annuity that provides a guaranteed fixed benefit amount, payable for the life of the annuitant

Indexed Whole Life

A whole life insurance policy whose death benefit increases according to the rate of inflation. Such policies are usually tied to the Consumer Price Index (CPI).

Which of the following features of the Indexed Whole Life policy is not fixed?

Cash value growth

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

Adjustable Life

Increase or decrease the premium of the premium-paying period Increase or decrease the face amount Change the period of protection

Which of the following is TRUE regarding the annuity period?

It may last for the lifetime of the annuitant

Which of the following is NOT true regarding the accumulation period of an annuity?

It would not occur in a deferred annuity

Universal Life Option A

Level death benefit

Modified Whole Life

Level premiums for designated timeframe (typically 5 years); higher premiums thereafter

Indeterminate Premium Whole Life

Lower premium rate initially (2-3 years) and adjusted (up or down) according to the insurers mortality, expense and investment projections.

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A

whole life insurance

Insurance that is kept in force for a person's entire life and pays a benefit upon the person's death, whenever that may be.

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

Under the extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy

When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family members that are covered under the policy?

They can convert their coverage to permanent life insurance without evidence of insurability

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Guaranteed insurability option

Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?

Installments for a fixed period

Equity Indexed Annuity

The annuity that has a guaranteed minimum interest rate and allows the annuitant to invest money in an index (i.e.: S&P 500). The investments grow as the index grows.

Whole Life: Limited Payment

These policies are exactly like Ordinary or Straight Life policies, except, the premium is paid over a shorter period of time

What insurance principle means something of value that each party gives to the other?

Consideration

Which of the following are NOT fundable by annuities?

Death benefits

Which of the following are not fundable by annuities?

Death benefits