TN Insurance license exam practice !
An IRA owner who is 57 years old wants to make a withdrawal from her traditional IRA. What penalty will be imposed?
10%
Which of the following would be required to become licensed as an insurance producer?
Agency supervisor whose actions do not include selling insurance
In this state, an unlicensed person may be compensated for a referral to a licensed insurance producer only if the compensation is a fixed amount, not to exceed what minimum dollar amount?
$25
What is the maximum fine the Commissioner may impose on an insurer for a single willful violation of the Insurance Code?
$25,000
Category of an "adverse underwriting decision
- charging a higher rate based upon the information given on the insurance application - declination of insurance coverage - termination of insurance coverage
Purpose of law
- to establish penalties for failure to comply with replacement requirements - to assure the purchaser receives information to make an informed decision - to reduce the opportunity for misrepresentation and incomplete disclosures
All resident producers must complete at least how many hours of continuing education every 2 years?
24
An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?
3 days
Insurers must maintain a record of all sales and solicitation materials for a period of
5 years.
A distribution from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvested in an IRA within
60 days.
How long is the grace period for an individual life insurance policy?
7 to 10 business days
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 Double Indemnity Rider
Which of the following is the primary source of information that an insurer uses to evaluate an insured's risk for life insurance?
Insurance application
Which of the following is true regarding pure life annuity settlement option?
It provides the highest monthly benefit.
Testimony, documents, or other evidence obtained by the Commissioner may NOT be used in which of the following situations?
A private civil proceeding against an agency or producer
The complete transfer by the existing owner of all rights in an insurance policy to another person is
Absolute assignment
In this state the owner gets a "free look" of a specified number of days from
Delivery of the policy.
As it relates to life settlements, the term "owner" means
Life settlement broker.
Which of the following is guaranteed under a variable whole life insurance policy?
Minimum death benefit
During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sound worse than it is. This is an example of an unfair trade practice of
Misrepresentation.
The reduction of premium option uses the dividend to reduce
Next year's premium.
Social Security provides protection against the financial consequences of al of the following, except
Poor investments
What is the difference between a straight life policy and a 20-pay whole life policy?
Premium payment period
A whole life policy that will generate immediate cash value is a
Single premium policy.
Which risk classification is representative of the majority of people in a certain age group and with similar lifestyles?
Standard
The Commissioner may share confidential and privileged documents regarding a termination of a producer appointment with all of the following EXCEPT
The general public.
Which of the following is NOT an example of the company's location of incorporation?
Alien
A worker dies while he is credited with six quarters of the last 13 quarter period. What status does the worker have under social security?
Currently insured
At what point would an automatic premium loan be generated?
Following the grace period
Which retirement plan utilizes non-deductible contributions?
Roth IRAs feature non-deductible contributions and tax free distributions.
When an agent delivered an insurance policy to the insured, he collected the initial premium, as well as a document verifying that the insured had not had any injuries or illness since the application date. What is this document called?
Statement of Good Health
Which retirement plan was designed for employees of public school systems?
Tax Sheltered Accounts (TSAs) are designed for non-profit organizations
Which of the following are characteristics of term life insurance?
Temporary protection, renewability, no cash value
Which of the following types of insurance products would be appropriate for an individual with a low income and high insurance needs?
Term insurance
Which of the following policies would NOT offer a policy loan option?
Term life
With Adjustable Life, the owner can change all of the following EXCEPT
The insured.
What is the difference between a defined contribution plan and a defined benefit plan
The penalties for early distribution
An agent who acts as an insurance agent, broker, solicitor, life-only agent, or bail agent, acts ni which capacity when handling premiums or return premiums for an insured?
A fiduciary is a person entrusted with the funds or property of another (e.g. premiums).
Which of the following is NOT a standard exclusion in life insurance policies?
Disability
The social security normal retirement age depends upon
The worker's year of birth
Which of the following terms refers to solicitation, negotiation, effectuation or advising related to an insurance contract?
Insurance transaction
In making an annuity recommendation to a consumer the producer must have reasonable grounds to believe that the annuity
Is suitable.
What happens to the face amount of a whole life policy if the insured reaches the age of 100?
It is paid to the beneficiary in full.
What does the application of contract of adhesion mean?
It makes sure that the insured does not get more than the value of the loss.
A policyowner names his elderly parents as beneficiaries to ensure retirement income for them 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?
Joint and survivor
For a contract to be enforceable by law, the purpose of the contract must be
Legal and not against public policy.
An annuitant pays the annuity premium on the 14th of each month. Which of the following best describes this arrangement?
Level
What does an annuity protect the annuitant against?
Living longer than expected
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
Named beneficiary.
Among the applicants in the same class and life expectancy, which of the following factors can be used to determine premium rates?
Occupation
Which of the following best defines the unfair trade practice of rebating?
Offering an inducement of something of value not specified in the policy
Which statement best describes agreement as it relates to insurance contracts?
One party accepts the exact terms of the other party's offer.
Which of the following is NOT a mandatory policy provision in life insurance policies issued in this state?
Other insureds
Alife-only agent's records must include al of the following, except
Printed material in general use which has been distributed by the insurer
Al of the folowing statements about qualified pension plans are true, except
Revenue accumulating in a qualified retirement plan grows income tax deferred.
An individual receives a lump-sum inheritance. He'd like to use the money to create a lifetime income since he'll be retiring soon. He purchases an annuity and wishes to receive payments beginning in 2 months. What did he buy?
Single Premium Immediate Annuity
A return of premium rider is a rider that
The periodic return of premiums also applies if the insured has not made a claim for a specified period of time.
What is the written instrument caled ni which the insurance contract si set forth?
The policy is the written agreement which puts insurance coverage into effect.
All of the following statements about indexed whole life insurance are correct EXCEPT
The premium is fixed.
Viatical settlements are accomplished through the use of
The rights of ownership have been totally and permanently granted to another party, ni this case to the viatical settlement company.
What does the Guaranty Association guard against?
Insurer insolvency
The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called the
Insuring clause.
In life insurance, which of the following is NOT required to have an insurable interest in the insured?
The beneficiary
In order to determine the amount of premium an insured will pay, the insurer multiplies the rate by
The exposure units are the persons or items exposed to the risk of loss
Life insurance creates an immediate estate. Which of the following best explains this statement?
The face value of the policy is payable to the beneficiary upon the death of the insured
Al of the following apply to the life insurance cost-of-living rider, except
The face value will not decrease in deflationary periods.
Who is the annuity owner?
The person who purchases the annuity
An agent's appointment with an insurer wil be discontinued if all of the following circumstances exist, except
Another insurer submits an employment application.
If a policy contains an unconditional refund offer, what is the latest point at which the buyer's guide and policy summary must be issued?
Any point prior to the collection of the first premium
The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT
Approximately every 3 years between the ages of 25 and 40.
Which provision may be added to a permanent life policy, at no cost, that insures that the policy will not lapse so long as there is cash value?
Automatic Premium Loan option
Answers to questions in an insurance application are called representations and, as such, they are
Believed to be true to the best of the applicant's knowledge.
Which of the following is true of the taxation of cash values in a business life insurance policy?
Cash values grow tax deferred.
Which of the following statements is true regarding SIMPLE plans?
Contributions and earnings are tax-deferred until funds are withdrawn.
Decreasing Term insurance is often used to
Cover a mortgage
The conversion privilege allows a person to change coverage from
This conversion right gives a certificate holder the ability to covert group life or group health insurance to an individual policy without a physical examination to furnish evidence of insurability. Usually, this must be done within 31 days of termination of employment.
Which non-forfeiture option uses cash surrender values to purchase paid-up term insurance for the ful face amount of the policy?
This is a true statement concerning the non-forfeiture option in an ordinary life policy. The length of the term policy depends on the size of the cash value and the attained age of the insured.
The risk selection and classification process is known as
Underwriting
Which department or division of an insurance company is responsible for the selection, evaluation, and distribution of risks?
Underwriting
An aleatory contract is based on what kind of exchange?
Unequal exchange of values
If a loan request is for payment of due premiums on the policy, how soon must the insurer issue a loan?
Within 30 days
An insured has a life insurance policy in the amount of $250,000 naming his wife as beneficiary. Upon his death, his beneficiary decides not to receive the death benefit for some time. When she finally receives the death benefit check, it's in the amount of $250,530. Is any portion of the proceeds that the beneficiary receives taxable?
Yes, proceeds in the excess of face amount are taxable as interest.
How many days' notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans?
30 days
Which of the following has the right to change a settlement option in a life insurance policy?
A beneficiary after the policyowner's death
The policyowner has an option to pledge the life insurance policy as collateral for a bank loan. This is called
A collateral assignment.
Which settlement option alows only hte death benefit earnings ot be paid ot the beneficiary?
Earnings on the death benefit = interest
An adjustable life policy can assume the form of
Either term insurance or permanent insurance.
In order to obtain group insurance without providing evidence of insurability, what do eligible individuals generally have to do?
Enroll within a specified eligibility period
In Tennessee, how often must an insurance license be renewed?
Every 2 years
Premiums collected on behalf of the insurance company by an agent will be held in what capacity?
Fiduciary
Jis receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?
Fixed Amount
How will life insurance proceeds that are paid as a lump sum received by the beneficiary?
Free of federal income taxation
All of the occurrences listed below are examples of an insurable event as defined by the CA Insurance Code, except
Gambling is an uninsurable speculative risk.
Rules of replacement apply to all of the following EXCEPT
Group life insurance.
Which of the following statements is TRUE regarding advertising that the Insurance Guaranty Association would ensure payment of benefits in the event of insurer insolvency?
If insureds join the Association, they will be protected financially if their insurers become insolvent.
Under which of the following conditions would life insurance proceeds be taxable by the federal government?
If there is a transfer for value
Which of the following best describes the difference between joint life and joint and survivor annuity payment options?
In joint life option, the benefits stop after the first death.
If the Commissioner denies an application for an insurance license, how should the applicant be notified?
In writing
If a soliciting producer suspects that there could be misrepresentation on the part of the applicant for insurance, what must the producer do?
Inform the insurance company
