New York Life Quiz questions

Annually renewable term policy with a cash value account

A universal life insurance policy is best described as a

Pay lower renewal premium by proving insurability

An insured has a level term life insurance policy that is guaranteed renewable and also included a re-entry provision. The re-entry provision would allow the insured to renew the policy and

The insured may render the policy for another 10 years, but at a higher premium.

An insured purchased a 10 year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10 year term?

Larger

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insurance group must become

Whether an insurable interest exist between the individuals

If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about

Decreases

If an insured changes his payment plan from monthly to annually, what happens to the total premium?

Upon the last death

In a survivorship life policy, when does the insurer pay the death benefit

Handling insurer funds in a trust capacity

In insurance transactions, fiduciary responsibility means

Adjusted to the insured age at the time of renewal

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

Consideration, agreement, legal purpose

The following is an essential element of an insurance contract.

To purchase a smaller amount of the same type of insurance as the original policy

The paid up addition option uses the dividend

Conditional

The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract ?

Pure risk and Speculative risk

The risk of loss may be classified as

increasing term

The type of term insurance that provides increasing death benefits as the insured ages is called

A SEC registration

To sell variable life insurance policies, an agent must receive all of the following except

The same face amount as in the whole life policy

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

Level fixed

Variable life insurance is based on what kind of premium?

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

What is an example of a producers fiduciary duty?

Executive bonus

When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called

Diving recklessly

Which of the following is considered to be a morale hazard?

Face amount

what does level refer to in level term insurance?

they can be changed only with the written consent of that beneficiary

which of the following statements is true concerning irrevocable beneficiaries?

There is no limitation on the number of key employee plan in force at any one time. The employer is the owner, payor and beneficiary of the policy the key employee is the insured

All of the following are true of key person insurance

A group needing low-cost life insurance

All of the following could own group life insurance EXCEPT

Lloyds association

An insurance organization that does not issue insurance policies but provides a meeting place for underwriters to conduct business is known as a

Single premium whole life

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 insured's age 100 is called

3000

An insured decides to surrender his 100,000 whole life policy. the premiums paid into the policy added up to 15,000. At policy surrender, the cash surrender value was 18000. What part of the surrender value would be income taxable?

It is used to lower premiums

An insurer invests the money it receives from premiums paid by its insureds. Which of the following is true regarding the interest earned on these investments

Beneficiary

Insurance policies ensure that after a loss proceeds will go to the

Express authority

The authority granted to an agents through the agents contract is referred to as

Homogeneous

Units with the same or similar exposure to loss are referred to as

Insurance

What do individuals use to transfer their risk of loss to a larger group?

Agents contract with the principal

What document grants express authority to an agent

An insurer with a home office in another state

What is a foreign insurer?

Liquidation

What is the term used when a person sells his assets as a way to gain money?

Per stripes

What type of beneficiary designation allows the benefit to pass from a deceased primary beneficiary to the beneficiary's heirs, instead of splitting the benefit among surviving primary beneficiaries?

Increasing term

What type of insurance would be used for a Return of Premium rider?

If it is intentional or material

When would a misrepresentation on the insurance application be considered fraud?

Indemnity

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

Universal Life

Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

Insurers guaranteed minimum rate of interest

Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity?

Term rider

Which of the following when attached to a permanent life insurance policy allows the policy owner to customize the policy to provide an additional amount of temporary insurance of the insured, or allows amounts of temporary to cover other family members

Day to day expenses of maintaining the family, funeral expenses, final medical expenses of the insured.

Which of the following would fall into the category of costs associated with death?

Insured

Who has the ability to request the change of a life policy beneficiary

Individual

Your clients employer does not offer a company wide annuity contract. what type of annuity contract could your client obtain?

fixed amount

when the policy owner specifies a dollar amount in which installments are to be paid he/she has chosen which settlement option

Annuities payments

which concept is associated with exclusion ratio

Automatic premium loan

which of the following protects insured from an unintentional policy lapse due to a nonpayment of premium?

Its premium steadily decreases over time, in response to its growing cash value

which statement is not true regarding a straight life policy

Captive agent

An insurance producer who by contract is bound to write insurance for only one company or group of companies is classified as a

Grow tax deferred

In life insurance policies, cash value increases

Social Security

Which government program allows a blackout period?

The purpose of the group was to purchase life insurance.

A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. why did they get rejected?

Cost of living rider

A long stretch of national economic hardship causes a 7% rate of inflation. Devonne notices that the face value of her life insurance policy has been 7% as a result. What is the name of the provision that caused this change?

Joint life policy

A married life couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?

Automatic premium loan

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

The premiums are invested in insurers general account

All of the following are true about variable products expect

Reasonable expectations

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?

Blackout period

In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse may receive retirement benefits?

Generally not taxed

Life insurance death proceeds are

Not taxable since the IRS treats them as a return of a portion of the premium paid

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are

reduction of premium

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

What is a material misrepresentation ?

Residual disability

What is the benefit based on the insured loss of earnings after recovery from a disability?

Preretirement Period

What is the income period after the children are no longer dependent upon the surviving spouse for support, but before the surviving spouse qualifies for social security survivor benefits?

An endowment policy

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

An authorized insurer

an insurer that holds a certificate of authority in the state in which it transacts business is considered

5

in order to quality for conversion from a group life policy to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?

extended term

which nonforfeiture option has the highest amount of insurance protection

Standard

which of the following is a risk classification by the underwriters for life insurance?

60 year old man

All other factors being equal, which of the following individuals would receive the largest monthly check from a single premium straight life immediate annuity?

20 year endowment, 20 pay life, 20 year level term, 20 year decreasing term

All other factors being equal, which of the following lists from the larger annual premium to the smallest annual premium?

She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan

An employee has a group life insurance through her employer, after 5 years she decides to leave the company and work independently. how can she obtain an individual policy?

The insured may choose to convert to term or permanent individual coverage

An employee is insured under her employers group life plan. If she terminates her group coverage, which of the following statements is incorrect

The insurer will pay the full death benefit from the group policy to the beneficiary.

An employee quits his job on May 15 and doesn't convert his Group life policy to an individual policy for 2 weeks. He dies in accident on june 1. which of the following statements best describes what will happen?

Risk

Insurance is the transfer of

Life Insurance proceeds

Kayla's husband died in a plane crash. She needs a new source of funding that will help put her child through daycare. What is the best source?

Principal

What is the term for the entity that an agent represents regarding contractual agreements with third parties?

Section 1035 policy exchange

What part of the Internal Revenue Code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences?

Concealment

What term describes the act of withholding material information that would be crucial to an underwriting decision

Immediate

What type of annuity can be purchased with a single premium and provides benefits payments immediately?

Transfer

When an individual purchases insurance, what risk management technique is he or she practicing?

Conditional

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

Payor Benefit

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have dies or become disabled?

Express and implied

Which of the following are the authorities that an agent can hold?

policy loans are tax deductible

Which of the following is incorrect regarding whole life insurance?

To create an estate

Which of the following is the best reason to purchase life insurance rather than annuities?

The purpose of the act is to protect the consumers right to privacy by making certain that underwriting data is confidential, accurate, relevant, and properly used

Which of the following is true of the Fair Credit Reporting Act?

Human life value approach

Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement and inflation?

Universal Life - Option A

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

The amount paid with the accelerated benefit plus the earnings lost by the insurance company in interest income from the accelerated benefit

Which of the following would be deducted from the death benefit paid to a beneficiary if a partial accelerated death benefit had been paid while the insured was still alive

The payments will stop when the annuitant dies

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

Not subject to income taxation by the federal government

death benefits payable to a beneficiary under a life insurance policy are generally

The insured contingent beneficiary

when a life insurance policy was issued, the policy owner designated a primary and contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. which of the following would receive the death benefit?

money borrowed from the cash value is taxable

which of the following is NOT true regarding policy loans?

They are required by state law to be included in the policy

which of the following is TRUE about nonforfeiture values?

Survivorship life

which of the following is called a second to die policy

Premiums are not tax deductible as a business expense

which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?

It may last for the lifetime of the annuitant

which of the following is true regarding the annuity period?

Loss

Insurance is a contract by which one seeks to protect another from