NH Insurance

Which of the following best describes annually renewable term insurance? A. It is level term insurance. B. It requires proof of insurability at each renewal. C. Neither the premium nor the death benefit is affected by the insured's age. D. It provides an annually increasing death benefit.

A. It is level term insurance.

Which of the following insurance options would be considered a risk-sharing arrangement? A. Reciprocal B. Stock C. Mutual D. Surplus lines

A. Reciprocal

Which of the following is an example of a peril covered in an accident and health insurance policy? A. Sickness B. Alcoholism C. Smoking D. Death

A. Sickness

In a life settlement contract, whom does the life settlement broker represent? A. The owner B. The insurer C. The beneficiary D. The life settlement intermediary

A. The owner

Which of the following statements is an accurate comparison between private and government insurers? A.Private insurers may be authorized to transact insurance by state insurance departments. B. Insurance may be provided by the government is called "federal insurance." C. Private insurers may offer fewer lines of insurance than government insurers. D. Private insurers may provide insurance in areas where the government will not.

A.Private insurers may be authorized to transact insurance by state insurance departments.

Under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer then makes a matching contribution up to an amount equal to what percent of the employee's annual wages? A. 10 B. 3 C. 5 D. 7

B. 3

A tax-sheltered annuity is a special tax-favored retirement plan available to A. Certain groups depending on factors such as race, gender, and age. B. Certain groups of employees only. C. Anyone. D. Certain age groups only.

B. Certain groups of employees only.

Which of the following is NOT true regarding the Needs Approach method of determining the value of an individual's life? A. It must be assumed that the death of the insured will occur immediately. B. Need is predicted using the number of years until the insured's retirement. C. Coverage is based on the predicted needs of that family. D. The death of an insured must be premature.

B. Need is predicted using the number of years until the insured's retirement.

All of the following are characteristics of group life insurance EXCEPT A. Certificate holders may convert coverage to an individual policy without evidence of insurability. B. Premiums are determined by the age, sex and occupation of each individual certificate holder. C. Amount of coverage is determined according to nondiscriminatory rules. D. Individuals covered under the policy receive a certificate of insurance.

B. Premiums are determined by the age, sex and occupation of each individual certificate holder.

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance? A. Disclosure rule B. Replacement rule C. Reinstatement rule D. Conversion rule

B. Replacement rule

J transferred his life insurance policy to his son two years before his death. Which of the following is true? A. Because the policy has been transferred, it will not be included in J's taxable estate. B. The entire face value of the policy will be included in J's taxable estate. C. The interest portion of the policy will be included in J's taxable estate. D. The unpaid premiums on the policy will be deducted from J's taxable estate.

B. The entire face value of the policy will be included in J's taxable estate.

The paid-up addition option uses the dividend A. To accumulate additional savings for retirement. B. To purchase a smaller amount of the same type of insurance as the original policy. C. To purchase a one-year term insurance in the amount of the cash value. D. To reduce the next year's premium.

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

What qualifications must an agent hold in order to sell variable life insurance policies? A. National Association of Insurance Commissioners (NAIC) registration B. State licensing to sell life insurance and variable products C. Both state and federal licensing D. Same certification as fixed life policies

C. Both state and federal licensing

An individual buys a flexible premium deferred life annuity with 20 year period certain. What would his beneficiary receive if he died 5 years after beginning the annuity phase? A. Payments for life B. Nothing C. Payments for 15 years D. Payments for 20 years

C. Payments for 15 years

Languages: English Español Chapter: Life Insurance Policies Question 8 of 15 What is the purpose of establishing the target premium for a universal life policy? A. To pay up the policy faster B. To cover all policy expenses C. To keep the policy in force D. To accumulate cash value faster

C. To keep the policy in force

What documentation grants express authority to an agent? A. Agent's insurance license B. Fiduciary contract C. State provisions D. Agent's contract with the principal

D. Agent's contract with the principal

A Universal Life Insurance policy is best described as a/an A. Variable Life with a cash value account. B. Whole Life policy with two premiums: target and minimum. C. Flexible Premium Variable Life policy. D. Annually Renewable Term policy with a cash value account.

D. Annually Renewable Term policy with a cash value account.

For an individual who is NOT covered by an employer-sponsored plan, IRA contributions are A. Partially tax deductible depending on the income level. B. Tax deductible. C. Deducted based on the income level. D. Never tax deductible.

Tax deductible.

What term best describes the act of withholding material information that would be crucial to an underwriting decision? A. Concealment B. Withholding C. Leading D. Breach of warranty

A. Concealment

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? A. It is used to lower premiums. B. It is paid out as dividends. C. It is used to fund executive bonuses D. It is used to increase the death benefit.

A. It is used to lower premiums.

Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die? A. Joint Life B. Decreasing Term C. Whole Life D. Ordinary Life

A. Joint Life

If an annuitant selects the straight life annuity settlement option, in order to receive all of the money out of the contract, it would be necessary to A. Live at least to his life expectancy. B. Die before his life expectancy. C. Name a beneficiary. D. Name another annuitant.

A. Live at least to his life expectancy.

In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment? A. The annuitant will receive the higher of either the guaranteed minimum rate or current rate. B. The annuitant will always receive the current interest rate. C. The annuitant will receive the lower of either the guaranteed minimum rate or current rate. D. The annuitant will only receive the guaranteed minimum specified in the contract.

A. The annuitant will receive the higher of either the guaranteed minimum rate or current rate.

All of the following statements are true regarding installments for a fixed amount EXCEPT A. The payments will stop when the annuitant dies. B. Value of the account and future earnings will determine the time period for the benefits. C. This option pays a specific amount until the funds are exhausted. D. The annuitant may select how big the payments will be.

A. The payments will stop when the annuitant dies.

Which of the following is TRUE about nonforfeiture values? A. They are required by state law to be included in the policy. B. They are optional provisions. C. A table showing nonforfeiture values for the next 10 years must be included in the policy. D. Policyowners do not have the authority to decide how to exercise nonforfeiture values.

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

Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount? A. Universal life B. Flexible life C. Variable life D. Adjustable life

A. Universal life

According to the entire contract provision, what document must be made part of the insurance policy? A. Agent's report B. Outline of coverage C. Copy of the original application D. Buyer's Guide

C. Copy of the original application

Which of the following best describes the aleatory nature of an insurance contract? A. Ambiguities are interpreted in favor of the insured B. Policies are submitted to the insurer on a take-it-or-leave-it basis C. Exchange of unequal values D. Only one of the parties being legally bound by the contract

C. Exchange of unequal values

An agent selling variable annuities must be registered with A. The Guaranty Association. B. SEC. C. FINRA. D. Department of Insurance.

C. FINRA.

What does "level" refer to in level term insurance? A. Cash value B. Interest rate C. Face amount D. Premium

C. Face amount

An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n) A. Medical examination. B. Attending Physician Statement. C. Inspection report. D. Medical Information Bureau report.

C. Inspection report.

All of the following are true regarding the Medical Information Bureau (MIB) EXCEPT A. MIB reports contain previous insurance information. B. Insurers may not refuse to accept an application solely due to information in an MIB report. C. MIB reports are based upon information supplied by doctors and hospitals. D. MIB information is reported to underwriters in coded form.

C. MIB reports are based upon information supplied by doctors and hospitals.

Z falls from the roof of his house while fixing it and damages his spinal column enough to render him disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will Z receive? A. Payments for life B. Yearly premium waiver and income C. Monthly premium waiver and monthly income D. Percentage of medical costs paid by the insurer

C. Monthly premium waiver and monthly income

Under a pure life annuity, an income is payable by the company A. For a guaranteed period of time, whether or not the annuitant survives to the end of that period. B. For as long as either the annuitant or a named beneficiary is alive. C. Only for the life of the annuitant. D. Until the principal and interest are exhausted.

C. Only for the life of the annuitant.

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? A. By the head B. Per capita C. Per stirpes D. By class

C. Per stirpes

Another name for a substandard risk classification is A. Declined. B. Elevated. C. Rated. D. Controlled.

C. Rated.

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a A. Nonforfeiture option. B. Rollover. C. Settlement option. D. Nontaxable exchange.

C. Settlement option.

Which of the following is an example of apparent authority of an agent appointed by an insurer? A. The agent has business cards and stationery printed. B. The agent puts up a sign with the insurer's logo without express permission. C. The agent accepts a premium payment after the end of the grace period. D. The agent accepts a premium payment during the grace period.

C. The agent accepts a premium payment after the end of the grace period.

An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his A. Experience Rating. B. Group rate. C. Insurer's scheduled rate. D. Attained age.

D. Attained age.

What is surplus lines insurance? A. Additional insurance placed on itemized risks B. Any insurance on items worth more than $25,000 C. Insurance in excess of a standard policy's coverage D. Insurance placed with an unauthorized insurer

D. Insurance placed with an unauthorized insurer

Which of the following best describes the difference between Pure Life and Life with Guaranteed Minimum settlement options? A. In Life with Guaranteed Minimum, payments can be made in installments. B. Pure Life guarantees to pay out all the proceeds. C. Pure Life is not a life contingency option. D. Life with Guaranteed Minimum will pay the remaining principal to the beneficiary.

D. Life with Guaranteed Minimum will pay the remaining principal to the beneficiary.

An insured loses her left arm in an accident that is covered by her Accidental Death and Dismemberment policy. What kind of benefit will she most likely receive from this policy? A. The principal amount in a lump sum B. The capital amount in monthly installments C. The principal amount in monthly installments D. The capital amount in a lump sum

D. The capital amount in a lump sum

Which of the following is a characteristic of a Reciprocal Insurance Exchange? A. Normally write all lines of insurance B. Stock holders share in any profits C. Issues nonassessable policies D. The chief administrator of the insurer is called an "attorney-in-fact".

D. The chief administrator of the insurer is called an "attorney-in-fact".

When is the earliest a policy may go into effect? A. When the first premium is paid and the policy has been delivered B. When the insurer approves the application C. After the underwriter reviews the policy D. When the application is signed and a check is given to the agent

D. When the application is signed and a check is given to the agent