Wisconsin Life Insurance Exam
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select? A) Interest Only B) Fixed Period C) Life with period certain D) Fixed amount
Fixed period
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium? (hint: always remember universal means inclusive)
Universal Life
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium? (hint: the answer starts with a word that also means inclusive) A) Straight whole life B) Universal life C) Variable life D) Decreasing term
Universal life
How long will the beneficiary receive payments under the single life settlement option? (hin: if it's my time it's my time) A) Until the insured's death B) For a specified period of time C) Until the beneficiary's death
Until the beneficiary's death
What is the latest point that a Buyer's Guide can be issued? (hint: all application materials must be submitted together)
When the applicant turns in the application
Are insurance company underwriters allowed to discriminate? (hint: the answer to this is bogus bc why would you ever be allowed to discriminate but the law is the stupid law) A) No, discrimination is an unfair practice B) Yes, but no unfairly
Yes, but not unfairly
Any person who violates an insurance statute or rule of Wisconsin can be fined up to: (hint: enough for vacation for two to the Maldives)
$10,000
What is the maximum life insurance coverage available to the state residents through WI State Life Insurance Fund? A) $10,000 B) $50,000 C) $5,000
$10,000
If a person violates an order specifically issued to him or her, that person may be required to pay a fine of: (hint: average fine)
$1000
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to (hint: Lu will be this old on her birthday)
10 years
An intermediary holding a Wisconsin insurance license in any major line of insurance must complete how many hours of continuing education? (hint: this is how old I am)
24
When replacing a policy an insurer must maintain a file containing copies of statements for:
5 years
What is reinsurance? (hint: assuming means to acquire) A) An agreement between and insurer and insured B) An agreement between a ceding insurer and assuming insurer C) An agreement between an originating insurer and a ceding insurer D) An agreement between a domestic insurer and a foreign insurer
An agreement between a ceding insurer and assuming insurer
The authority granted to an agent through the agent's contract is referred to as: A) Express authority B) Apparent authority
Express authority
A person that markets insurance but does not include an insurer is called (hint: another word for facility)
Firm
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select? A) Fixed period B) Life with period certain
Fixed period
The type of term insurance that provides increasing death benefits as the insured ages is called: (hint: as you age your number is increasing)
Increasing term
Which of the following is an intermediary who acts in the procuring of insurance on behalf of an applicant for insurance or an insured? (hint: an agent sells while a broker represents for the best interest of the client)
Insurance broker
When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?
Interest only
What is the main purpose of the Seven-pay Test? (hint: MAIN = MEC) A) It requires level premium payments WRONG B) It ensures that the policy benefits WRONG C) It guarantees the minimum WRONG D) It determines if the insurance policy is a MEC
It determines if the insurance policy is a MEC
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?
It is a percentage of the cash value and decreases over time
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined? A) It is a percentage of the cash value and decreases over time B) It is a flat fee determined by the annuity owner when the annuity is purchased
It is a percentage of the cash value and decreases over time
Which of the following settlement options in life insurance is known as straight life? A) Single life B) Life with period certain C) Fixed amount D) Life income
Life Income
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report (hint: think must be) A) Must be advised that a copy of the report is available to anyone who requests it (pretty sure that's illegal) B) Are entitled to obtain a copy of the report from the party who ordered it C) Must be informed of the source of the report
Must be informed of the source of the report
The Gramm-Leach-Bliley Act was passed to: (hint: similar to HIPAA but in the insurance world)
Protect private customer information filed with financial institutions
What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death? (hint this is a water brand)
Pure Life
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as: (hint: you get this when you are offered money after buying something in the store if you return the _____)
Rebating
The Federal Fair Credit Reporting Act: A) Prevents money laundering B) Regulates Consumer reports C) Protects customer privacy D) Regulates telemarketing
Regulates consumer reports
All of the following would be different between qualified and nonqualified retirement plans EXCEPT: A) IRS approval requirements B) Taxation on accumulation
Taxation on accumulation
When an insurer is given an order of liquidation, which of the following will protect the insurers' unpaid claims? (hint: this organization has a pool of money for this cause)
The Wisconsin Insurance Security Fund
If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur? (hint: must be reported) A) The change must be reported to the Federal Producer's Directory B) The change but be reported to the department
The change must be reported to the department
Which of the following determines the cash value of a variable life policy? (hint: if you ____ better, you get a raise at work) A) The performance of the policy portfolio B) The policy's guarantees
The performance of the policy portfolio
All of the following are general requirements of a qualified plan EXCEPT: (hint: it MUST be permanent, communicated, be for exclusive benefits) A) The plan must be permanent, written, and legally binding B) The plan must provide an offset for social security benefits C) The plan must be communicated to all employees D) The plan must be for the exclusive benefits of the employees and their beneficiaries
The plan must provide an offset for social security benefits
Which of the following is NOT a goal of risk retention? (hint: risk retention is to reduce, increase, and fund) A: to minimize the insured's level of liability in the event of a loss B: to reduce expenses and improve cash flow C: to increase control of claim reserving and claims settlements D: To fund losses that cannot be insured
To minimize the insured's level of liability in the event of a loss
Which of the following riders added to a life insurance policy can pay part of the death benefit ___ home? (the question was incomplete in this picture) (hint: home = nursing home = ______)
long-term care
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy? (hint: the number is in the question and it's the original amount)
$50,000
Any person who violates an insurance statute or rule of Wisconsin can be imprisoned up to: (hint: half is part of the answer)
3.5 years
During a life insurance policy replacement, the insurer is required to provide the policyowner a free-lock period of at least:
30 days
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? (hint: there are only _ business days in a week)
5 days
For how long is an insurance company allowed to defer policy loan requests? (hint: months)
6 months
At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs? (hint: change means to adjust)
Adjustable life
Which of the following is another term for authorized insurer? (hint: authorized starts with an A and so does the answer) A) Legal B) Admitted C) Certified D) Licensed
Admitted
What documentation grants express authority to an agent? (hint: a contract is binding) A) Agents insurance license B) Agent's contract with the principal
Agent's contract with the principal
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the (hint: one year) A) One-year term options B) Paid-up additions
One-year term option
Which Universal Life option has a gradually increasing cash value and a level death benefit? (hint: gradually increasing, bottom of alphabet to top A-Z)
Option A
Which Universal Life option has a gradually increasing cash value and a level of death benefit? (Hint: Bottom of the alphabet, gradual = starting point and go up from there A-Z)
Option A
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do? (hint: because of the discrepancy, they won't get the full amount but a _____ amount) A) Pay a reduced death benefit B) Pay the full death benefit
Pay a reduced death benefit
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? (hint: it's not twisting)
Rebating
An insured committed suicide 6 months after his life insurance policy was issued. The insurer will: (hint: the death happened within a certain time therefore the money is ____) A) Refund the premiums paid B) Pay the full death benefit to the beneficiary
Refund the premiums paid
The Federal Fair Credit Reporting Act:
Regulates consumer reports
If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back? (hint: paid back, if you have a loan you have to pay it back) A) The policy beneficiary receives the FULL death benefit. B) The balance of the loan will be TAKEN OUT of the death benefit
The balance of the loan will be taken out of the death benefit
What must happen when an individual policy or annuity has been personally delivered to the policy owner? (hint: you have to sign when you receive a package delivered)
The policy owner must sign a delivery receipt
Who can make changes to the policy once it is in effect? (hint: they have a "high" title) A) The agent B) An executive officer of the insurer C) The insured D_ The policyowner
An executive officer of the insurer
Which of the following is NOT true of section 1035 Policy exchanges? (hint: 1035 is in the answer) A) It is an IRS Code which permits like kind exchanges of property B) Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days
Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days
Which of the following is NOT true of Section 1035 Policy Exchanges? (hint: days)
Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days.
Which of the following statements is true of insurance licensing in the State of Wisconsin? (hint: this is your final test you have to take and is a requirement)
Applicants must pass a state licensing exam
Employer contributions made to a qualified plan: A) Are after-tax contributions B) Are subject to vesting requirements
Are subject to vesting requirements
All of the following are duties and responsibilities of producers at the time of application EXCEPT: (hint: 3 make sense, one doesn't) A. Check to make sure that there are no unanswered questions on the application. (all answers must be answered) B. Change any incorrect statement on the application by personally initialing next to the corrected statement. C. Explain the nature and type of any receipt the producer is giving to the applicant. (explanation for what they are signing) D. Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information. (misrepresentation)
B. Change any incorrect statement on the application by personally initialing next to the corrected statement.
Which of the following is a feature of variable annuity? (hint: variable means changing=not guaranteed) A) Interest rate is guaranteed B) Payments into the annuity are kept in the company's general account C) Benefit payment amounts are not guaranteed
Benefit payment amounts are not guaranteed
Which of the following is a generic consumer publication that explains life insurance in general? (hint: the ultimate GUIDE)
Buyers Guide
Tim and Tom are twins. When they applied fo life insurance in company a, the insurance company found that while neither of them smoked and both had similar life style, tim was in a much stronger financial position than Tom. Because of this the company charged tim a higher rate for his insurance. This practice is: (hint: 2020 had a lot of this)
Discrimination
When contributions to an immediate annuity are made with before-tax dollars, which of the following is true of the distributions? (hint: PRE-TAX = you haven't paid tax on it yet) A) Distributions are nontaxable B) Distributions cannot begin prior to age 72 C) Distributions are taxable
Distributions are taxable
All of the following are CORRECT regarding temporary licenses EXCEPT: (hint: examinations)
Examinations are never required for the insurance of a temporary license
Which of the following is a person, other than an officer or employee of the ceding insurer? (hint: not an agent but a ____)
Reinsurance broker
Which of the following is FALSE regarding the life insurance replacement rules? (hint: the answer starts with replacement A) The existing insurer must be notified of the proposed replacement transaction within 5 business days B) Replacement forms must be kept on file for 7 years C) Replacement policies must have a 30 day free lock.
Replacement forms must be kept on file for 7 years
The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the: (hint: death = old people = old people like to thrift)
Spendthrift clause
Annuities differ from life insurance in all of the following ways EXCEPT (hint: the expensive option) A) There is no stated amount of death benefit B) They can be used in a qualified retirement plan C) The annuitant must be living to collect D) They are purchased with premiums
They are purchased with premiums
An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur? (hint: interests, the wife is still assumed to be alive and therefor the taxes are _______) A) The interest will continue to accumulate tax deferred. B) The interest will become immediately taxable
The interest will continue to accumulate tax deferred
Which of the following would provide an underwriter with information concerning an applicant's health history? (hint: two of these do not include medical in the phrase therefore those two are wrong. Medical = health) A) The inspection report B) The Medical Information Bureau C) A medical examination D) The agent's report
The medical information bureau
An insurer refuses to renew a policy written by an intermediary whose contact has been terminated (couldn't see the rest of the question) (hint: a letter to notify someone of something is called a notice) A) The intermediary is the subject of an investigation by the Commissioner B) The notice contains an offer to renew the policy by written request
The notice contains an offer to renew the policy by written request