Prep Questions
Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is
twisting
An producer who violates a cease and desist order may, after a hearing, be fined up to
$500
An insurer that terminates a producer's appointment must inform the Commissioner within how many days?
30
P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?
Accidental Death and Dismemberment provision
Replacement regulations apply to which of the following types of contracts?
Ordinary Life
Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid.
conditional
A group life insurance policyholder must be given a grace period for premium payment of how many days?
31
Which of these is an element of a Variable Life policy?
A fixed, level premium
A policy loan is made possible by which of these life insurance policy features?
A policy loan is made possible by which of these life insurance policy features?
The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n)
Accidental Death and Dismemberment rider (AD&D)
On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?
Collect initial premium along with a signed health statement
T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later, provided that T is an acceptable risk. What item is given to T?
Conditional receipt
Insurance policies offered on a "take it or leave it" basis are considered what?
Contracts of Adhesion
Credit life insurance is typically issued with which of the following types of coverage?
Decreasing Term
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted when assigned to another policyowner
Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself?
Entire Contract provision
What is being delivered during a policy delivery?
Insurance contract to the proposed insured
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?
Insured's contingent beneficiary
Which of the following statements is CORRECT about accelerated death benefits?
Must have a terminal illness to qualify
Which of the following actions by an insurance company or an agent is considered rebating?
Offering a prospect something of value that is not specified in a contract to induce the purchase of that contract
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the
Policy Loan provision
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
Unilateral
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?
Upon completion of the application
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
Void the policy only if it is discovered during the Contestable period and proven to be material
At what point does an informal contract become binding?
When one party makes an offer and the other party accepts that offer
When does a life insurance contract become effective if the initial premium is not collected during the application process?
When producer delivers policy and collects initial premium
When is the face amount of a Whole Life policy paid?
When the insured dies or at the policy's maturity date, whichever happens first
An insurance company licensed in West Virginia and domiciled in Pennsylvania is known as
a foreign company
A Health Reimbursement Arrangement MUST be established
by the employer
The Commissioner may examine the records of an insurance company in order to
determine the solvency of the company
The duty of the Commissioner of Insurance in Colorado is to
enforce all laws of the state governing insurance companies and to make rules and regulations relating to the business of insurance
An underwriter determines that an applicant's risk should be recategorized due to a health issue. This life insurance policy may be issued with a(n)
extra premium
Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy?
increase face amount
What kind of premium does a Whole Life policy have?
level
Insurance policies are considered aleatory contracts because
performance is conditioned upon a future occurrence
Who elects the governing body of a mutual insurance company?
policyholders
A Limited-Pay Life policy has
premium payments limited to a specified number of years
The investment gains from a Universal Life Policy usually go toward
the cash value