NW life insurence

A hearing may NOT occur sooner than how many days after the notice of hearing is served?

21

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

Interest only option

An insured had paid only part of her total number of IRA premiums before she died. What effect will this have on the insured's estate?

Only the premiums paid will be included in the estate.

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.

Pertaining to insurance, what is the definition of a fiduciary responsibility?

Promptly forwarding premiums to the insurance company

Which of the following best defines the "owner" as it pertains to life settlement contracts?

The policyowner of the life insurance policy

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

The same face amount as in the whole life policy.

If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?

The surrender charge is a percentage of the cash value and decreases over time.

Which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy.

Which of the following is true regarding the insurance amount in a credit life policy?

Allowable amount of coverage is determined by the State Insurance Commissioner.

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?

It is used to lower premiums.

A married 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?

Joint Life Policy

Which of the following is used to compare the cost of one life insurance policy against another in order to guide prospective purchasers to policies that are competitively priced?

Cost comparison methods

An agent selling variable annuities must be registered with

FINRA.

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

Upon the last death

Are insurance company underwriters allowed to discriminate?

Yes, but not unfairly

Which policy component decreases in decreasing term insurance?

Face amount

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.

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Survivor protection

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?

Universal life

How long will the beneficiary receive payments under the single life settlement option?

Until the beneficiary's death

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider.

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

The annuitant must be a natural person.

All of the following are true of key person insurance EXCEPT

a) The plan is funded by permanent insurance only. b) There is no limitation on the number of key employee plans in force at any one time. c) The employer is the owner, payor and beneficiary of the policy. d) The key employee is the insured. answer: A

The fine for impersonation of a licensed producer is

At least $10, but no more than $100.

An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 2.5%. During an economic downswing, the investments only drew 2%. What interest rate will the insurer pay to its policyholders?

2.5%

Who may complete a paramedical report?

A registered nurse

A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?

Cost of Living Rider

Which of the following is TRUE about credit life insurance?

Creditor is the policyowner.

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

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

Estate

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection. Under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy. The duration of the new term coverage lasts for as long a period as the amount of cash value will purchase.

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

Other-insured rider.

Which of the following is NOT a characteristic of an insurable risk?

The loss must be catastrophic.

Which of the following best describes what the annuity period is?

The period of time during which accumulated money is converted into income payments

When would a 20-pay whole life policy endow?

When the insured reaches age 100

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

a) A life insurance license. b) A SEC registration. c) A FINRA registration. d) A securities license. answer B

All of the following statements are true regarding installments for a fixed amount EXCEPT

a) This option pays a specific amount until the funds are exhausted. b) The annuitant may select how big the payments will be. c) The payments will stop when the annuitant dies. d) Value of the account and future earnings will determine the time period for the benefits answer is D -Installments for a fixed amount option has no life contingencies. A specific amount of benefits will be paid until funds are exhausted whether or not the annuitant is living.

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, 30 days - Generally, IRA rollovers must be completed within 60 days from the time the money is taken out of the first plan. If the distribution from the first plan is paid directly to the participant, 20% of the distribution must be withheld by the payor.

An insured purchases a policy in 2008 and died in 2013. The insurance company discovers at that time that the insured concealed information during the application process. What can they do?

Pay the death benefit

The Ownership provision entitles the policyowner to do all of the following EXCEPT

a) Assign the policy. b) Designate a beneficiary. c) Set premium rates. d) Receive a policy loan. answer C

Which of the following is true regarding taxation of dividends in participating policies?

Dividends are not taxable.

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

a) The insured would not need to prove insurability for a conversion policy. b) The insured may convert coverage to an individual policy within 31 days. c) The premium for individual coverage will be based upon the insured's attained age. d) The insured may choose to convert to term or permanent individual coverage. answer D

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that 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

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

$9,800 - In this scenario, the death occurred within the mandatory 30-day grace period. Past due premium would be subtracted from the face amount of the policy.

All of the following are requirements from the written application for a license to act as an insurance adviser EXCEPT

a) The application must state his professional credentials and all political affiliations for which he has received compensation or served as a member. b) The application must state the name, age, residence, and occupation of the applicant at the time of making the application. c) The application must also contain a statement as to the trustworthiness and competency of the applicant, signed by at least three reputable citizens of this commonwealth. d) The application must state his residence, occupation, and all business affiliations for the ten years next preceding the date of the application. answer A