Practice life insurance test

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Max penalty for habitual willful noncompliance with the fair credit reporting act

$2500

The fair credit reporting act says negative info includes what 3 things

1. Delinquencies 2. Late payment 3. Insolvency or other form of default

To seek variable life insurance policies, an agent just receive what 3 things:

1. Life insurance license 2. FINRA registration 3. Securities license

4 essential elements of all legal contracts:

1. Offer and acceptance 2. Consideration 3. Competent parties 4. Legal purpose

The ownership provision entitled the policyowner to do what 3 things?

1. Recurved a policy loan 2. Assign policy 3. Designate a beneficiary

Three types of whole life policies:

1. Straight life 2. Limited payment 3. Single premium

The maximum period of time a temporary license can be in force

15 months

Insurers must keep files of all advertisements used in Georgia for the minimum of how many years

4

What is the waiting period on a waiver of premium

6 months

A paid up non forfeiture option benefit will become effective as specified in the policy, unless the person selects another option how many days after due date of premium is in default

60

Example of a third party owner

A policyowner why isn't the insured

2 types of assignments:

Absolute and collateral

The period of time over which the annuitant makes payments into an annuity

Accumulation Period

Period of time during which the payment earn interest and grow tax deferred

Accumulation period

Who must sign the statements disclosing whether or not replacement is involved along with application

Agent and the applicant

What documentation grants express authority to an agent

Agents contract with the principal

Product that provides income for specified period of years or for life and protects a person against outlining his or her money

Ah

Inserted pays $100 premium per month, yet insurer promises to pay $10,000 for covered loss. What characteristic of a contract is this

Aleatory

When transacting business in this state an insurer formed under the laws of another country is known as....

Alien insurer

What product provides income got a specified period of years or for life, and protects a person against outliving god or her money

An annuity

What will a consumer report not contain info about

Ancestry

The death protection component of universal life insurance is always

Annually renewable term

The least expensive first year premium payment is found in....

Annually renewable term

A universal life insurance policy is best described as an

Annually renewable term policy with a cash value account

Universal life insurance policy is best described as an

Annually renewable term policy with a cash value account

What type of insurance may be used to fund a buy-sell agreement

Any form of life insurance

What is also perceived authority

Apparent

What type of agent authority is called "perceived authority"

Apparent

If the initial premium isn't paid with the application, when will the agent be required to collect the premium and what will the applicant need to fill out

At the time of policy delivery and a strand of good health

When does the 10 day free look period begin

Begins when policy is delivered

If a settlement option isn't selected by the policyowner before the insured dies, who can choose the option

Beneficiary

What is a feature of a variable annuity

Benefit payment amounts are not guaranteed

A contract that establishes what will be done with a business in the event that an owner dies

Buy-sell agreement

How would the policyowner of an adjustable life policy increase the death benefit

Can be increased by providing evidence of insurability

Allows an insurer to send the policyowner an annual, non taxable dividend check

Cash option

What must an insurer obtain in order to transact insurance within a given state

Certificate of authority

A business owner can make a______ ______ of his or her life insurance policy to the bank

Collateral assignment

If there's controversy between the insurance company and insured, the agent is the agent of the:

Company

Contract where the purported insured makes the premium payment on a new insurance policy and if the insured dies, the insurer will part the death benefit to the beneficiary of policy is approved

Conditional

Says that coverage will be effective either on the date of the application or the date of the medical exam

Conditional receipt

The act of trying to discourage a policyholder from dropping their existing policy is called

Conservation effort

An insurer neglected to pay a legit claim that is covered under the terms of the policy. What principle did the insurer violate

Consideration

Something of value that is transferred between the two parties to form a legal contract

Consideration

When an insured makes truthful statements on the application for insurance and pays the required premium it is known as what

Consideration

When an insured pays an annual premium to his insurer and the insurer promises to pay benefits in accordance With the terms of the contract

Consideration

Type of policy that can be changed from one that doesn't accumulate cash value to the one that does is a....

Convertible term policy

What position is responsible for offering advice on insurance policies

Counselor

Permitting individuals of the same class to be charged a different rate for the same insurance is what

Discrimination

Term that's used to name the non taxed return of unused premiums

Dividends

Hope is the commissioner of insurance selected to be the chief officer of the department of insurance

Elected to office

When does a producers license expire

Every 2 years on the last day of the producers birth month

If policyowner repeatedly replaces policies from the same insurer or agent, the pattern is considered to be what?

Evidence that the insurer or agent knew the replacement was intended in connection with the sale and intended to violate the replacement region

Which non forfeiture option has the highest amount of insurance protection

Extended term

(T/F) beneficiary's consent must be included in an insurance contract to be considered legally binding

False

(T/F) in variable products the premiums are invested in the insurers general account

False

(T/F) the President and employee of a family cooperation are eligible for a Keogh retirement plan

False

(T/F) the annuitant can't be the same person as the annuity owner

False

(T/F)Insurers selling variable products invest the customers money in a general account

False

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member

Family term rider

If a company is located in one state but transacts insurance in another, what is the company called

Foreign

The death benefit under universal life option B,

Gradually increases each year by the amount that the cash value increases

What best describes coverage provided by term policies

Greatest

A guy purchases 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 additional coverage will be available in the future. What option should be included in the policy

Guaranteed insurability option

What forest fixed annuities provide for

Hedge against inflation

When will the insured be able to receive the full face amount from a whole life policy

If the insured loves to age 100

Authority that isn't stated in an agent contract but is required for the agent to conduct business

Implied

Prevents an insurer from denying a claim due to statements in an application after the policy has been in force for two years

Incontestability clause

A return of premium term life policy is written as what type of term coverage

Increasing

What type of insurance would be used for a return of premium rider

Increasing term

What type of report includes the insureds financial status, hobbies and habits

Inspection report

Two components of a universal policy

Insurance and cash account

Insured purchased a 10 yr lvl term life policy that is guaranteed renewable and convertible. What happens at end of the 10 yr term

Insured may renew policy for another 10 yrs but at a higher premium rate

Who makes up the MIB

Insurers

Provision that states the insurer duty to pay benefits upon the death of the insured, and to whom the benefits will be paid

Insuring clause

Purpose of conditional reciept

Intended to provide coverage on a date prior to policy issue

During partial withdrawal from a universal life policy which portion will be taxed

Interest

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. What settlement option is this

Interest only option

Policy that depends on the company's investment and expense factors, the cash value could change from those down in the policy at issue time

Interest sensitive whole life

When does the premium change on children's rider policy

It doesn't change, based on average number of children

Why is an equity indexed annuity considered to be a fixed annuity

It has guaranteed minimum interest rate

What happens if the loan and interest aren't repaid and the insured dies in an automatic loan provision

It will be subtracted from the death benefit

When a reduced paid up non forfeiture option is chosen, what happens to the face amount of the policy

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

Type of settlement option which posts throughout the lifetimes of two or more beneficiaries is called

Joint and survivor

Straight life policy has what type of premium

Level annual premium for life of insured

What type of policy will pay the death benefit of the insured dies during the 20 year premium paying period, and nothing if death occurs after the 20 year period

Level term

Another name for straight life

Life income

An applicant who recurved a preferred risk classification qualifies for

Lower premiums than a person who receive standard risk

2 typ

Lower rates

Equity indexed abilities earn what type of interest rates rather than fixed annuities

Lower rates

If a settlement option isn't chosen by the beneficiary or policyowner what option will be chosen

Lump sum

What part of insurance application would constrain info regarding the cause of death of applicants deceased relatives

Medical info

Which part of an insurance application would contain info regarding the cause of death of the applicants deceased relatives

Medical information

A nonprofit trade organization which recorded adverse medical info from insurance companies and maintains confidential medical impairment on n individuals

Medical information bureau

Name of clause that is included in a policy that limits or eliminates death benefit of the insured does as a result of war or while serving in the military

Military service or war

If an agent commingled $500 of premiums collected with new applications with his personal funds what can he be found guilty of

Misdemeanor

Are employer contributions tax deductible in tax qualified annuities

No

Can a CEO of a private cooperation use a 403(b) plan for their retirement

No

Can dividends be guaranteed

No

Do employees receive a tax deduction for any contributions made to a non qualified plan

No

Does a $100,000 20 year level term policy's cash value equal $100,000 at the end of 20 years

No

Does a non qualified plan need IRS approval

No

Does the seller have to be terminally ill in a life settlement plan

No

Is a life insurance illustration required to be part of the contract

No

Is a producer responsible for issuing the policy that is requested

No

Is the application given to a prospective insured part of the consideration

No

Would someone who works 400 hours per year qualify for a Keogh Plan

No

Ifyou suggest negotiations in settling the claim, is it an example of unfair claims settlement

No, you can negotiate

What term describes the benefits of a life insurance policy that the policyowner doesn't automatically relinquish even if the policy lapses

Non forfeiture values

What is the official name of the social security program

Old age survivors disability insurance

What is the definition of a unilateral contract

One sided only one party makes an enforceable promise

Where is the policy loan option found

Only in policies that contain cash value

Which option for universal life allows the beneficiary to collect both the death benefit and cash value upon the death of insured

Option B

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

Other insured rider

An insured has a life policy from a participating company and recurved quarterly dividends. He instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen Is...

Paid up additions

Which option is getting utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends plus interest and the policy cash bale to pay the policy up early

Paid up option

Another term for the accumulation period of an annuity

Pay in period

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

What slows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become

Payor benefit

Illustration refers to

Presentation of non guaranteed elements of a policy

When an employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized

Profit sharing plan

Taxation on accumulation is deferred in what two types of plans

Qualified and non qualified retirement plans

Another babe for sub standard rush

Rated

What non forfeiture option provides coverage for longest period of time

Reduced paid up

What option allows someone to use dividends to help pay for their next premium

Reduction of premium

What option would allow someone to use dividends to help pay for their next premium

Reduction of premium

Part 2 of the application contains questions about what

Regarding applicants health history

Part 1 of the application contains questions about what

Regarding current coverage being applied for as well as any other insurance coverage with the same or other insurers

The federal fair credit reporting act:

Regulate consumer reports

The consumer challenges the accuracy of the info contained in their report, the reporting agency must

Respond to the consumer complaint

When an insured dies, the designated beneficiary received the face amount of the policy as well as a refund of all premiums paid. Which rider is attached to the policy

Return of premium

The spouse term rider policy is usually what

Rider is usually level term insurance

Insurance is the transfer of

Risk

A domestic insurer issuing variable contracts must establish one or more....

Separated accounts

Methods used to pay the death benefits to beneficiary upon insurers

Settlement options

Upon policy delivery. What can't the producer obtain

Signed waiver of premium

Two term associated directly with the way an annuity is funded

Single payment or periodic payments

What determines the length of time that benefits will be received under the fixed amount settlement option

Size of each installment

Risky that is representative of the majority of people

Standard risk

Policy that charges a level annual premium throughout the insureds lifetime and provide a level guaranteed death benefit

Straight life

Insurance that helps a married couple determine financial needs of their children in the event one or both should die prematurely

Survivor protection

Funds in a qualified plan accumulate on what

Tax deferred basis

Children's riders attached to whole life policies are usually issued as what type of insurance

Term

Who assumed the risks on investment in variable annuities

The annuitant

If a policy has an automatic premium loan provision, what happens if the insured stores before is paid back

The balance of will be taken out of the death benefit

Who is responsible for determining whether an ad might mislead or deceive a person of average education and intelligence

The commissioner

Who owns the policy of an executive bonus

The employee

Who owns the policy when an executive bonus is included

The employee

Premiums are determined by the age, sex and occupation of whom in group life insurance

The entire group

What protects consumers against the circulation of inaccurate or obsolete personal or financial info

The fair credit reporting act

Who bears all of the investment risk in a fixed annuity

The insurance company

If the insured and primary beneficiary died in the same car accident and we don't know who died first, who would receive the death benefit

The insured contingent beneficiary

When group coverage is covered to an individual policy, who determines the type of coverage

The insurer

Who sets premium rates based upon underwriting considerations

The insurer

In a life settlement contract, whom does the life settlement broker represent

The owner

If an insured continually uses the automatic premium loan option to pay the policy premium...

The policy will terminate when the cash value is reduced to nothing

Under an extended term non forfeiture option, the cash value is converted to...

The same face amount as in the whole life policy

Are employer contributions not tax deductible in tax qualified annuities

They are not

What is true for both equity indexed annuities and fixed annuities

They have a guaranteed minimum interest rate

What is the best reason to purchase life insurance rather than annuities

To create an estate

What is the purpose of establishing the target premium for a universal life policy

To keep the policy in force

The paid up addition option uses the dividend

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

The paid up additions option uses the dividend to do what

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

(T/F) beneficiaries do not have to have insurable interest in the policy holder

True

When only one party is legally bound to anything

Unilateral

Contract where the insured isn't legally bound to do anything but the insurer must post losses covered by the policy

Unilateral contract

Type of insurance policy that shows policyowner to pay more or less than the planned premium

Universal life

What type of policy allows the policyowner to skip premiums provided there is enough cash value in the policy to cover the premium

Universal life

Which type of life insurance policy allowed the policyowner to pay more than the planned premium

Universal life

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

Upon last death

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called:

Waiver of premium

Statement that is guaranteed to be true but if untrue it may break an insurance contract

Warranty

In forming an insurance contract, when does acceptance occur

When An insurers underwriter approves coverage

When would a 20-pay whole life policy endow

When insured reaches age 100

When does the triple indemnity accidental death rider get 3x the face amount of plocuy

When the insured dies as as result of an accident

What type of insurance policies would perform the function of cash accumulation

Whole life

What type of insurance policy would perform the function of cash accumulation

Whole life

How are buy-sell agreements funded

With a life insurance policy

Does a qualified plan have a tax benefit of both employer and employee?

Yes

If the interest in the accumulation at interest option taxable

Yes

In the cash surrender non forfeiture option, are funds exceeding the premium paid taxable as ordinary income

Yes

Is annually renewable term insurance also level term insurance

Yes

Is the policyowner entitled to policy loans in a whole life pilicy

Yes

Is the policyowner entitled to policy loans in a whole life policy

Yes

Would the face of the term policy be the same as the face amount provided under the whole life policy

Yes


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