CH 6

Which of the following outlines the features of various policies and outlines the advantages and disadvantages to both? A Buyer's Guide B Policy Index C Comparative Policy Analysis D Applicant's Guide

A Buyer's Guide

Which of the following terms can be used by producers to identify themselves at the beginning of sales presentations? A Insurance producer B Investment planner C Investment advisor D Financial planner

A Insurance producer

A new life insurance policy is derived from a policy that was recently terminated. Which of the following terms best describes this policy? A Replacement B Transfer C Reduced D Reinstatement

A Replacement

Under what conditions must an insured sign a Notice Regarding Replacement of Life Insurance or Annuity form? A When replacing a policy with a different insurer that is under different ownership than the current company B When replacing a life insurance policy that has been in existence for over five years C When replacing a life insurance policy, under nearly all circumstances D Only when replacing a policy with a different insurer

A When replacing a policy with a different insurer that is under different ownership than the current company

At what annual rate does interest on life insurance proceeds accrue from the date of death of the insured? A 5% B 10% C 12% D 15%

B 10%

According to the life insurance replacement regulations, which of the following would be an example of policy replacement? A A term policy expires, and the insured buys another term life policy. B A policy is reissued with a reduction in cash value. C A lapsed policy is reinstated within a specific timeframe. D Term insurance is changed to a whole life policy.

B A policy is reissued with a reduction in cash value.

What must an insurer present to a prospective policy purchaser before the initial premium is paid? A Policy Summary B Buyer's Guide C Conditional receipt D Policy illustrations

B Buyer's Guide

Which of the following type of discrimination by the company underwriters would be considered legal? A In rates for persons within the same class B In policy benefits on the basis of life expectancies C In premiums because of the applicant's blindness D In policy benefits on the basis of marital status

B In policy benefits on the basis of life expectancies

Duties of the replacing insurer include all of the following EXCEPT A Send to the existing insurer, within three days of receiving the replacement application, the Notice Regarding Proposed Replacement of Life Insurance or Annuity. B Keep records related to replacement for at least 5 years. C Make sure that the producer signs the Notice. D Maintain records related to replacement for 3 years.

B Keep records related to replacement for at least 5 years.

An agent uses an insurer's illustration. He obtains proper approval and does not change the illustration in any way. The illustration involves projected amounts, and the agent stipulates that the amount would not be guaranteed. Which of the following is true? A The illustration is fine the way it is. B The agent must stipulate that the illustration is not part of the contract. C It is illegal to include a non-guaranteed amount in an illustration. D The agent needs to change the illustration to include guaranteed amounts only.

B The agent must stipulate that the illustration is not part of the contract.

The Director must find all of the following to be true of a viatical supplement provider applicant before a license will be issued EXCEPT A The applicant possesses a good business reputation. B The applicant posts a bond with the Department of Insurance. C The applicant has provided a detailed plan of operation. D The applicant has paid the fee.

B The applicant posts a bond with the Department of Insurance.

What is the name of the insured who enters into a viatical settlement? A Viatical broker B Viator C Third party D Contingent

B Viator

The Illinois Life and Health Insurance Guaranty Association is obligated to pay covered claims only if under the amount of A$100,000 B$300,000 C$500,000 D$1,000,000

B$300,000

The Replacement Regulation does NOT apply to situations in which the total existing coverage to be replaced represents less than how much of the face amount? A$2,000 B$5,000 C$8,000 D$10,000

B$5,000

At what annual rate does interest on life insurance proceeds accrue from the date of death of the insured? A5% B10% C12% D15%

B10%

If a viatical settlement provider moves his business the new address must be reported to the Director within A15 days. B30 days. C60 days. D90 days.

B30 days.

In the state of Illinois, a viatical settlement contract must contain an unconditional right to cancel. How long does this right remain in effect? A 30 days from the receipt of the viatical settlement proceeds B 10 days from the date the contract is delivered C 30 days from the date the contract is executed D 15 days from the date the contract is delivered

C 30 days from the date the contract is executed

Which of the following is NOT an exclusion to the requirement stating that no insurer may recommend the purchase of an annuity if the recommendation results in an insurance transaction unless the recommendation is suitable for the consumer? A Government or church plans B Prepaid funeral plans C Contracts designed for senior citizens D Deferred compensation plans

C Contracts designed for senior citizens

Which of the following is NOT an exclusion to the requirement stating that no insurer may recommend the purchase of an annuity if the recommendation results in an insurance transaction unless the recommendation is suitable for the consumer? A Government or church plans B Prepaid funeral plans C Contracts designed for senior citizens D Deferred compensation plans

C Contracts designed for senior citizens

The Life Solicitation Rule applies to which of the following? A Annuities B Credit life C Individual life D Variable life

C Individual life

Ronald is buying life insurance policies. He is unclear which one to buy, and his insurer explains the costs of similar plans, in addition to their basic features. Which rule requires the insurer to disclose such information? A Informational Rule B Policy Information Rule C Life Solicitation Rule D Insurance Disclosure Rule

C Life Solicitation Rule

The Replacement Regulation minimizes A Unnecessary replacement. B Illegal policy renewal. C Misrepresentation. D The need for replacement.

C Misrepresentation.

To which of the following situations does the Replacement Regulation apply? A Life coverage in a tax-qualified retirement plan B Variable life C Nonrenewable coverage expiring in 8 years D Group annuities

C Nonrenewable coverage expiring in 8 years

An agent wants to include an illustration written by his insurance company. Which of the following best describes the conditions under which she may use the illustration? A Illustrations must accurately portray what would be included in a potential contract. B All changes must be submitted to the insurer before approval. C The illustration must stay exactly as it is. D The illustration can only be used for a month before it requires re-approval.

C The illustration must stay exactly as it is.

What is the maximum percentage of the face amount of a life insurance policy that can be paid in an acceleration of benefits? A25% B50% C75% D100%

C75%

An insurer creates an advertisement in January of 2015 and keeps a record of its contents on file. Its next regular examination will occur in December of 2018. How long must the insurer keep its advertisements on file? AJanuary 2018 BDecember 2018 CJanuary 2019 DJanuary 2020

CJanuary 2019

An insured has been diagnosed with a life-threatening disease, and is given approximately 6 months to live. The insured is in a hard financial situation which will worsen with the upcoming medical expenses. Which of the following options could the insured utilize right away? ASurrender BChange of Beneficiary CViatical Settlement DLiquidity

CViatical Settlement

The policy loans provision states that the insurer must advance to the policyowner a sum up to the policy's cash value after the full amount of premiums have been paid for how long? A 6 months B 1 year C 2 years D 3 years

D 3 years

The term "illustration" in a life insurance policy refers to A Pictures accompanying a policy. B A depiction of policy benefits and guarantees. C Charts and graphs. D A presentation of nonguaranteed elements of a policy.

D A presentation of nonguaranteed elements of a policy.

To which of the following policies would the state regulation on illustrations NOT apply? A A whole life policy with a guaranteed death benefit of $20,000 B A group life policy C A term policy D An individual variable life policy

D An individual variable life policy

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered A A misrepresentation. B A required disclosure. C A legal representation of the Association. D An unfair trade practice.

D An unfair trade practice.

Which of the following entities ultimately decides if an advertisement is complete and truthful? A Consumer Protection Agency B Federal Advertisement Review Board C Illinois Guaranty Association D Director

D Director

How often does a viatical settlement provider's license expire? A Every 2 years B Every 3 years C Every 5 years D Every year

D Every year

The purpose of the Illinois Guaranty Association is to A Encourage Life insurers to write substandard business. B Allow producers to continue to solicit insurance, even if the company they represent is financially impaired. C Protect the reputation of the Insurance Department if they issue a Certificate of Authority to a company that becomes insolvent. D Help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company.

D Help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company.

Variable life, group life, and annuities are EXEMPT under which rule? A Insurance Disclosure B Fiduciary C Life Insurance Taxation D Life Solicitation

D Life Solicitation

A transaction where new life insurance is purchased, and as part of the transaction, existing life insurance is lapsed or surrendered, is known as A Conversion. B Conservation. C Renewal. D Replacement.

D Replacement.

An agent wants to include an illustration written by his insurance company. Which of the following best describes the conditions under which she may use the illustration? A The illustration can only be used for a month before it requires re-approval. B Illustrations must accurately portray what would be included in a potential contract. C All changes must be submitted to the insurer before approval. D The illustration must stay exactly as it is.

D The illustration must stay exactly as it is.

Each year a license viatical settlement provider must file with the Director a(n) AWarranty Guarantee. BGrievance. CViatical agreement. DAnnual statement.

DAnnual statement.