PRIMERICA

Either term insurance or permanent insurance

An adjustable life policy can assume the form of A- Either term insurance or permanent insurance. B- Neither term insurance nor permanent insurance. C- Only term insurance D- Only permanent insurance.

Twisting

An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as A- Fraud B- Concealment. C- Misrepresentation. D- Twisting.

Misdemeanor

An agent's license has been suspended, but he continues to transact insurance for his existing clients. This will be considered a(n) A- Controlled business. B- Felony. C- Legal practice D- Misdemeanor.

Legal

An agreement that is enforceable by law is known as what kind of contract? a) Legal b) Conditional c) Adhesion d) Unilateral

Whenever the agent is acting within the conditions of the contract

When is the company responsible for actions of its agents? A- Whenever the agent is acting within the conditions of the contract B- Whenever the agent is licensed C- Always: the agent's actions are presumed to be those of the company D- Never: agents represent clients, not companies

Term rider

When term insurance is added to the main policy to enhance the policy or provide added benefit or coverage, it is called a A- Guaranteed Insurability rider. B- Term rider. C- Nonforfeiture option. D- Future Income rider.

Fixed

An annuity owner receives the same guaranteed payment every month. What type of annuity is it? A- Immediate B- Guaranteed C- Single D- Fixed

Inform the insurance company

If a soliciting producer suspects that there could be misrepresentation on the part of the applicant for insurance, what must the producer do? A- Refuse the applicant B- Inform the insurance company C- Change the applicant's answer to what the producer believes is correct D- Erase the answer once the applicant submits the application

Never; the insurer has waived its right to those answers by issuing the policy

If an insurance company issues a policy even though some questions on the application were unanswered, when can the insurer get the answers to those questions? A- Within 30 days of issuing the policy B- At any time within the incontestable period C- Never; the insurer has waived its right to those answers by issuing the policy D- Within 3 months of issuing the policy

Variable whole life

Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value? A- Universal life B- Credit life C- Variable whole life D- Interest-based life

Waiver of premium rider

Because of an injury, an insured has been unable to work for 7 months. When his life insurance premium came due, he was unable to pay, yet the policy remained in force. The policy includes A- Waiver of premium rider. B- Guaranteed insurability benefits. C- Facility of payment clause. D- Nonforfeiture options.

A producer returning part of her commission to her client, as an inducement to buy

Which of the following best describes a rebate? A- A producer misrepresenting policy provisions or coverages at issue B- producer requiring an insured to buy insurance from her as a condition to a loan C- A producer selling insurance primarily to himself, his family and his friends D- A producer returning part of her commission to her client, as an inducement to buy

The policyowner at any time during the life of the insured

Which of the following has the right to change a settlement option in a life insurance policy? A- The insured B- A beneficiary at any time C- The policyowner at any time during the life of the insured D- A beneficiary after the policyowner's death

Reduce the death benefit

What effect will the long-term care (LTC) rider have on the death benefit of a life insurance policy if TC benefits were paid to the insured? A- Eliminate the death benefit B- Reduce the death benefit C- Increase the death benefit by the amount paid into LTC D- Not affect the amount payable to the beneficiary

Premium payment period

What is the difference between a straight life policy and a 20-pay whole life policy? A- The benefit settlement option B- The face amount and cash value C- Policy maturity date D- Premium payment period

Enforce the provisions of the Insurance Code

What is the primary duty of the Commissioner of Insurance? a) Draft insurance laws b) Hold hearings and issue orders c) License producers and insurers d) Enforce the provisions of the Insurance Code

One party accepts the exact terms of the other party's offer

Which statement best describes agreement as it relates to insurance contracts? a) One party accepts the exact terms of the other party's offer. b) The intent of the contract must be legally acceptable to both parties. c) All parties must be capable of entering into a contract. d) Each party must offer something of value.

Occupation

Among the applicants in the same class and life expectancy, which of the following factors can be used to influence premium rates? A- Race B- Occupation C- Ancestry D- Marital status

Unequal exchange of values

An aleatory contract is based on what kind of exchange? A- Equal amounts for pay in and pay out B- Balanced benefits C- Exchange of equal obligations D- Unequal exchange of values

Mexico

An example of an alien insurer doing business in this state is one formed under the laws of A Arizona. B- Puerto Rico. C- Mexico. D- District of Columbia.

Until 2024

An insurer use printed advertisements for their life insurance policies in 2020. The insurer's next schedule examination by the Insurance Department is in 2022. How long must the insurer keep records of the advertisements? A- Until the Department's examination B- For 4 years after the Department's examination C- Until 2024 D- Until 2025

10 days notice

When a hearing regarding an insurance matter is requested, all parties must receive A- 10 days' notice. B- 15 days' notice. C- 30 days' notice. D- 60 days' notice.

15 days' notice

When a hearing regarding an insurance matter is requested, all parties must receive a) 10 das' notice. b) 15 days' notice. c) 30 days' notice. d) 60 days' notice

Conservation effort

When an insurer tries to discourage a policyholder from dropping his/her existing policy, this is called A- Bargaining. B- Negotiating. C- Conservation effort. D- Retention effort.

Material prepared by the insurer for training new agents

According to this state's rules regulating the advelfisement of life insurance, advertisement does NOT include which of the following? a) Published advertisement in a local newspaper b) Material prepared by the insurer for training new agents C) Descriptive literature utilized by an agent in the sales process d) Prepared oral sales presentation

Adjust the death benefit to what the premium would have purchased at the actual age or gender.

If an insured dies, and it is discovered that the insured misstated his/her age or gender, the life insurance company will A- Pay the face amount specified at the time of policy issue. B- Deny all claims because of the misrepresentation. C- Adjust the back premiums for the proper age or gender. D- Adjust the death benefit to what the premium would have purchased at the actual age or gender.

Eating and dressing

Which of the following are considered activities of daily living in most long-term care policies? a) Walking and running b) Hearing and seeins c) Eating and dressing d) Bathing and sleeping

Authorized

Which of the following is NOT an example of the company's location of incorporation? A- Foreign B- Alien C- Authorized D- Domestic

Test results must be sent to the Department of Insurance

Which of the following statements regarding HIV testing is NOT true? A- The insurer is responsible for the cost of HIV testing. B- Written consent from the applicant is required prior to the examination. C- Test results must be sent to the Department of Insurance. D- Testing may be waived at the discretion of the insurer.

An employer is purchasing life insurance on the key employee

In which of the following cases the insured must consent in writing to the life insurance contract? A- corporation is transferring coverage on an employer from another corporation b) An employer is purchasing life insurance on the key employee. c) A spouse is purchasing insurance on their spouse. d) A guardian is purchasing life insurance on the life of a minor.

Offering an inducement of something of value not specified in the policy

Which of the following best defines the unfair trade practice of rebating? A- Charging premium amounts in excess of the amount stated in the policy B- Making false statements that are maliciously critical and intended to injury another person in the business of insurance C- Offering an inducement of something of value not specified in the policy D- Making statements that misrepresent an insurance policy in order to induce an insured to replace the policy

Paying a claim

Which of the following is consideration on the part of an insurer? a) Underwriting b) Paying a claim c) Decreasing premium amounts d Paving the premium

Minimum death benefit

Which of the following is guaranteed under a variable whole life insurance policy? A- Cash value B- Stock performance C- Minimum death benefit D- Interest rates

An Accidental Death Rider

Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy? A- a Guaranteed Insurability Rider B- A Covered Peril Rider C- An Accidental Death Rider D- A Double Indemnity Rider

The primary beneficiary died before the insured

According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed? A- The insured died before the primary beneficiary. B- The primary beneficiary died before the insured. C- The deaths occurred at the same time. D- The estate of the primary beneficiary and the contingent beneficiary split benefits equally.

Not tax deductible

Contributions to Roth IRAs are A- Paid with pretax dollars. B- Not tax deductible. C- Tax deductible. D- Always subject to a 6% tax penalty.

At least once every 5 years

How often will the Commissioner examine domestic insurers? A- Once every 3 years B- Biennially C- At least once every 5 years D- Annually

2 months

How soon from a receipt of proof of death must an insurer pay death benefits on a life insurance policy? A 14 days b) 1 month c) 2 months d) 6 months

Immediately

If a loan request is for pavment of due premiums on the policy. how soon must the insurer Issue loan A) Immediately b) Within 10 days c) Within 30 days d) Within 90 days

Cash surrender values

In a variable life insurance policy, all of the following assets are held in the insurance company's general account EXCEPT A- Incidental benefit amounts. B- Cash surrender values. C- Mortality reserves. D- Face amount reserves.

Pay the death benefit to the estate of the insured

Key person insurance can provide protection for all of the following economic losses to a business EXCEPT A- Pay the death benefit to the estate of the insured. B- Provide deferred compensation retirement benefit if the insured key person survives to retirement. C-Fund the expense of finding a suitable replacement following the death of an employee. D- Fund the cost of training a current employee to perform the duties of a deceased employee.

Survivor protection

Life Insurance can provide which of the following? A- Protection against outliving one's assets B- Creation of a future liability C- Liquidation of one's estate D- Survivor protection

If the primary beneficiary dies before the insured

Under what circumstances will the contingent beneficiary receive the death benefit? A) If the tertiary beneficiary dies before the insured b) If designated by the insured c) If designated by the primary beneficiary d) If the primary beneficiary dies before the insured

The insurer may go to another for representation

What does the application of contract of adhesion mean? A- The holder of the contract has the ultimate power of promise. B- The insurer may go to another for representation. C- It makes sure that the insured does not get more than the value of the loss. D- Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured.

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured

What does the application of contract of adhesion mean? a) The holder of the contract has the ultimate power of promise. b) The insurer may go to another for representation. c) It makes sure that the insured does not get more than the value of the loss. d) Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured.

Disability

Which of the following is NOT a standard exclusion in life insurance policies? A- Hazardous occupation B- War and military service C- Aviation D- Disability

Cross out the incorrect information, write in the correct answer, and have the applicant initial the change

While completing a life insurance application the applicant realizes that she should have answered an earlier question differently. What should the agent do to make the necessary change? A- Cross out the incorrect information and provide an explanation to the insurance company B- Nothing, only a company officer can make any changes C- Cross out the incorrect information, write in the correct answer, and have the applicant initial the change D- White-out the information, make the change, and have the applicant initial the change

Joint and Survivor

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select? A- Life income B- Joint and Survivor C- Fixed-amount installments D- Fixed-period installments

Universal Life

Which of the following policies can be described as a flexible premium adjustable life policy? A- Term Life B- Credit Life C- Universal Life D- Whole Life

7 years

A life insurance policy qualifies as a Modified Endowment Contract• (MEC) if the amount of premium paid exceeds the amount that would have provided paid-up insurance in how many years? A- 3 years B- 5 years C- 7 years D- The life of the policy

3 years

For how many years must a life insurance policy be in effect until the policyowner may be able to take out a policy loan? 1) 1 year b)2 years c) 3 years d) 4 years

Misrepresentation

Guaranteeing future dividends is considered to be an unfair or a deceptive act known as A- False financial statements. B- Rebating. C- Misrepresentation. D- Twisting.

It provides the agent's personal observations concerning the proposed insured

Which of the following statements is TRUE regarding an Agent's Report during the policy application process? A- It is a required element of the contract. B- It provides the agent's personal observations concerning the proposed insured. C- It is only used when the initial premium is not paid with the application. D- It becomes part of the entire contract after the policy is issued.

Single premium policy

A whole life policy that will generate immediate cash value is a A- Single premium policy. B- Continuous premium policy. C- Variable life policy. D- Limited-pay policy.

An automobile accident

A loss resulting from which of the following would qualify for the accidental death rider coverage? A- A health condition B- A disability C- A hazardous hobby D- An automobile accident

Coercion

Agent McButch uses his big size and implication of his "connections" to intimidate applicants into purchasing life insurance from him. Which unfair trade practice is this an examne? a) Churning b) Misrepresentation c) Coercion d) Fraud

Mutual insurer

An insurance company that is owned by the policyholders is called a A-Fraternal insurer. B- Stock insurer. C- Reciprocal insurer. D- Mutual insurer.

Issuing policies on behalf of the insurer

As an insurer's field underwriter, a producer has all of the following responsibilities EXCEPT a) Issuing policies on behalf of the insurer. b) Completing applications c) Soliciting insurance contracts d) Collecting premiums.

Countersignature

To be valid, an insurance policy must have all of the following EXCEPT a) Consideration b) Offer c) Countersignature d) Acceptance

Insurable interest

To purchase insurance, the policyowner must face the possibility of losing money or something of value in the event of loss. What is this concept called? A- Exposure B- Pure loss C- Insurable interest D- Indemnity

The insurer issuing a policy

Which of the following entities is considered the principal? a) The producer or agent soliciting the policy b) The director of the insurance c) The head of the Department or Insurance d) The insurer issuing a policy

Named beneficiary

In the event an annuitant dies during the accumulation period, and there is a beneficiary named in the annuity, annuity benefits would be paid to the A-Next of kin B- Insurance company. C- Named beneficiary. DO Annuitant's estate.

Paid-up additions

Which dividend option will increase the death benefit? A- Reduced paid up B- Paid-up additions C- Accumulation D- Extended term

Certificate of Authority

Insurers CANNOT transact insurance in this state without a A- Letter of Clearance. B- Certificate of Authority. C- Broker's license D- Certificate of Insurance.

A customer service representative who solicits no more than one policy a year

Which of the following would be required to become licensed as an insurance producer? A- Agency supervisor whose actions do not include selling insurance B- A person whose activities are limited to insurance advertising C- An officer of an insurer who does not receive commissions D- A customer service representative who solicits no more than one policy a year

Churning

Agent McButch uses his big size and implication of his "connections" to intimidate applicants into purchasing life insurance from him. Which unfair trade practice is this an example of? A- Churning B- Misrepresentation C- Coercion D-Fraud

An amount not exceeding the cash value

What is the maximum loan amount a policyowner may withdrawal from a variable universal life insurance policy? A- An amount equal to the first year of premium payments B- An amount not exceeding the cash value C- An amount up to the face amount of the policy D- Nothing; loans are not allowed under variable universal life

Simplified Employee Pension (SEP)

S set up an individual retirement account that her employer is now contributing to. Her employer's contributions are not included in her gross income. What kind of retirement plan does S have? A- HR-10 (Keogh) B- SIMPLE C- Simplified Employee Pension (SEP) D- 401(k)

Protect the general public

What is the purpose of requiring licenses for persons who transact Insurance? A- Protect the general public B- Be able to collect commissions C- Generate income for the Department of Insurance D- Protect insurance companies from incompetent insurance producers

Term insurance

Which of the following types of insurance products would be appropriate for an individual with a low income and high insurance needs? A-Term insurance B- Straight whole life C- Paid-up at 65 insurance D- A variable annuity

Each party must offer something of value

Which statement best describes agreement as it relates to insurance contracts? A- One party accepts the exact terms of the other party's offer. B- The intent of the contract must be legally acceptable to both parties. C- All parties must be capable of entering into a contract. D- Each party must offer something of value.

Individuals age 50 or older

Who would be allowed catch-up contributions? A- An IRA owner who contributes less than the allowed maximum amount B- Individuals who have dependents C- Individuals age 50 or older D- Anybody who has a traditional IRA

Premiums are flexible

How do premiums in variable universal life policies vary from those in variable whole life policies? A- Premiums automatically decrease over the life of the policy. B- Premiums automatically increase over the life of the policy. C- Premiums are flexible. D- Premiums are level.

Maliciously criticize another insurance company

Agents may be found guilty of defamation if they make false statements that are intended to A- Maliciously criticize another insurance company. B- Deceive a policyholder. C- Misinform prospective clients about policy coverage. D- Misrepresent the benefits payable under policies.

Reports may be sent to anyone who requests one

All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT A- The customer must be notified if adverse action is taken as a result of a report. B- Reports may be sent to anyone who requests one. C- Insurers are not required to give customers a copy of the report. D- It applies to credit reports ordered in connection with insurance, banking and employment.