quiz final questions

A single mother wants to be sure her children are financially secure in the event of her death. She cannot obligate herself to a high premium at this time. Her youngest child is age 5, and she wants protection until her children are out of college. Gail would most likely want to consider:

a 20-year level term plan

an insurance producer includes all of the following, EXCEPT:

a business entity

the children's rider is not:

a family rider

which of the following is not a correct statement about equity-indexed annuities?

a securities license is required to sell EIAs

because sylvia paid the initial premium when her policy was delivered, in order for the policy to be in effect, the agent is required to obtain:

a statement of good health

an application for insurance is considered to be:

a written request by the applicant to an insurer requesting the insurer the issuance of a policy of insurance on the basis of the information provided in the application

which of the following life insurance policies is not a combination of permanent and term coverage?

current assumption whole life--it is comprised of only permanent coverage

all of the following are true regarding keogh plans except

dividends are taxable in the year earned

which of the following is not true about the accumulation of interest dividend option?

dividends left to accumulate at interest are part of the policy's cash value

which of the following nonforfeiture options permits the policyowner to use the cash value to purchase paid up term life insurance?

extended term it permits the policy owner to use the policy's cash values to buy paid up term insurance

what law requires that an applicant be notified that an insurance underwriter may request a report from an investigative agency?

fair credit reporting act

if charlie is laid off, which of the following is not a consideration in converting from a group to an individual plan with his insurance?

he can use the cash value of his group policy to purchase paid-up insurance

which of the following is not an action that only the owner of an annuity can take?

he/she can make changes during the annuity period

which of the following is a common element, when it occurs that allows an insurer to charge lower premiums?

higher interest earnings

which of the following statements is not true about a binding receipt?

coverage lasts 120 days

how much is the maximum annual benefit for a defined benefit plan?

$220,000

jim has a life policy with a face value of $250,000 and a total of $25,000 in loans and interest outstanding on the policy. he is killed in a skiing accident. with his double indemnity rider, how much in benefits will the policy pay?

$475,000

how many hours of continuing education in ethics must Louisiana life and health agents complete every 2 years?

3 hours

the commissioner should examine any licensee or authorized insurer as often as necessary and at minimum every:

4 years

how much time does someone have to transfer funds from one IRA to another without incurring a tax penalty?

60 days

all of the following are true about Roth IRAs except

contributions are tax deductible

a qualified retirement plan that blends an IRA with a profit sharing plan and allows the employer to deduct 25% of contributions made to all employees is called a

SEP

which of the following contains elements that are part of every legal contract?

agreement, consideration, competent parties, legal purpose

controlled business is insurance covering...

all of the above 1. the licensee 2. members of the licensee's immediate family or a company of which they are officers or stockholders 3. the licensee's employer

which of the following would be a situation where an insurance policy is considered replaced?

all of the above: 1. an existing life insurance policy is lapsed, forfeited, surrendered or terminated 2. converted to reduced paid-up insurance 3. reissued with a reduction in cash value

any of the following should be considered in a needs approach calculation EXCEPT

amount needed to retire comfortably

a fixed annuity that provides a guaranteed minimum interest rate is called:

an equity indexed annuity

what type of life policy has premiums paid weekly to an agent who comes to your home to collect?

an industrial plan characterized by premiums that can be paid as often as weekly

bob is leaving his employer for another position. he has a health problem and wishes to continue his life insurance on an individual basis. what should bob do to continue his coverage?

bob must make a written request within 31 days and the company will issue the policy outlined in the plan at his current age

which of the following is a use for whole life insurance

cash for emergencies

which life insurance dividend option does not increase a policy's cash value?

cash payment

which life insurance dividend option does not increase a policy's cash value

cash payment-- the policy holder is sent a check for the amount of the dividend and this does not increase the cash value

level premium term provides a level face amount with level premiums during the policy period. in order to provide this protection, the insurer:

charges premiums that are higher in early years.

Henry has just completed a life application on a prospective client. He should do which of the following before submitting the application to his company?

complete the agent's statement in full

take it or leave it is the basis for insurance policies. because of this, they are referred to as...

contracts of adhesion

Cliff bought a life policy and the agent issued him a conditional receipt. The receipt stated that Cliff was covered as of the date of the application, provided he was insurable as a standard risk. If Cliff dies before the policy is issued, what is the insurance company's responsibility?

if he was insurable, the insurer would pay the death benefit

which of the following is true concerning the conditional receipt?

if the applicant is an acceptable risk, the conditional receipt binds the insurance company as of the later date of the receipt or the medical exam

all of the following are true about credit life insurance EXCEPT:

if the debtor dies, the creditor gets all of the benefits of the policy

what is/are the non-guaranteed elements of an insurance policy?

illustrations--the explain the complex and nonguaranteed aspects of a policy

which of the following is not a characteristic of a group life insurance plan?

individual selection of benefits

which of the following is not a type of whole life policy?

industrial

all of the following are features of variable universal life EXCEPT

insurer decides where to invest premiums the policyowner actually decides where to invest premiums

what life insurance policy provides a blend of the benefits of traditional whole and universal life

interest-sensitive whole life

which of the following statements is true about the return of premium rider?

it is an increasing term rider that matches the total premium input

the purpose of the condition receipt is to:

it specifies the timing and the terms of the insurance coverage applied for

what type of annuity would someone pay monthly premiums for many years until the payout phase begins?

level premium deferred annuity

what rider can decrease the death benefit when utilized?

long term care rider this rider allows the policyholder to utilize some or all of the policies specified amount (death benefit) for long term care costs

what guarantee states that if the policyholder discontinues payment of premiums, the policy holder can have access to the cash value of the policy?

nonforfeiture provision this protects the policyholder from losing their investment

insurance producer responsibilities and duties for replacement include all of the following EXCEPT:

notify insurers of policies to be replaced, and if requested, provide insurers with the policy comparison statement

which dividend option may offset some or all of the benefit reduction caused by loans from a participating whole life plan?

one-year term option this will purchase up to the amount of the cash value annually

mark names his wife and children as beneficiaries on his life policy. they would not be considered

other insureds

all of the following statements are false regarding the paid up additions dividend option in a whole life insurance policy issued by a participating insurer, EXCEPT:

paid-up additions are based on the insured's attained age

which of the following is not a common use for annuities?

pay legal fees

all of the following are characteristics of long-term care rider EXCEPT:

prior hospitalization is not required

which of the following is not true about the accelerated benefit rider?

provides a monthly check when you became disabled

which of the following is true in Louisiana?

renewal commissions may be paid to a person if he was licensed at the time of the sale.

a deferred annuity with a decreasing term life insurance rider is a

retirement income annuity

which of the following statements concerning the payment from a non-qualified annuity is correct?

since this is a non-qualified plan, only a portion of the payment will be taxable?

A couple has created a large estate during their marriage. Their tax attorney has designed a plan that will have no impact when one of the partners dies, but there will be a substantial liability when the second partner dies. An economical solution for funding the estate tax liability with life insurance is:

survivorship life or second to die

which of the following is usually the owner of the annuity?

the annuitant

which of the following is not part of the consideration element of an insurance contract?

the applicant's promises

when the only logical beneficiary is a minor, all of the following option are available EXCEPT:

the benefits can go directly to the estate of the insured

life insurance may be included in the insured estate when

the insured is also the policy owner

the AD&D rider provides additional benefits if:

the insured loses the sight in an eye as a result of an accident

equity indexed universal life works the same way as universal life EXCEPT:

the nonguaranteed indexed rate can reach yields of 30% or more

which of the following statements is not true about the GIR?

the older the insured gets, the more frequent the purchase option

which of the following is true about the automatic premium loan rider?

the rider gives the company the right to borrow against the policies cash value

all of the following are true about market value adjusted annuities EXCEPT

this is not a fixed contract.... Market value adjusted annuity IS a fixed contract

which part of the following is not an assignment whereby someone would transfer legal rights as the policyowner of a life contract?

total, complete, unconditional assignment (this does not exist in the insurance world)

all of the statements are true about universal life policies EXCEPT

universal life policies are only subject to the interest rates stated in the contract

waiver of premium differs from the waiver of the cost of insurance in which of the following ways?

waiver of premiums waives the full premium due. waiver of the cost of insurance will only continue a death benefit feature of the policy

when does the clock start running on the free look provision of a life policy?

when the policy is delivered to the insured