Exam FX Test

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An individual not covered by an employer sponsored plan who has earned income.

Who can make a fully deductible contribution to a traditional IRA?

Premiums are determined by the age, sex and occupation of each individual certificate holder.

All of the following are characteristics of group life insurance, EXCEPT

The plan is funded by permanent insurance only

All of the following are true key person insurance Except

Refund the premiums paid

An insured committed suicide one year after his life insurance policy was issued. The insurer will

9,800

An insured had a 10000 term life policy. The annual premium of 200 was due on February 1 however, the insured failed to pay the premium. He died on February 28 How much would the beneficiary receive from the policy

Hazards

Events or conditions that increase the chances of an insured loss occurring are referred to as

"Not taxable" since the IRS treats them as a return of a portion of the premium paid.

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are

180 days

Temporary licenses can last for how long?

The beneficiary will receive the greater of the money paid into the annuity or the cash value

The annuitant dies while the annuity is still in the accumulation stage. Which of the following is true

Express Authority

The autority granted to an agent through the agent contract is referred to as

gradually increases each year by the amount that the cash value increases

The death benefit under the Universal Life Option B

Annually Renewable Term

The least expensive first year premium is found in which of the following polices

Signed waiver of premium

Upon policy delivery, the producer may be required to obtain any of the following except

The owner will receive the surrender value of the annuity

What happens if a deferred annuity is surrendered before the annuities action period

To protect the public

What is the main justification for the existence of the State Insurance Department?

15

What is the minimum age for purchasing life insurance policy in this state?

An applicant who is a smoker

Which of the following appliicants could the insuer charge a higher rate of premium and not violate regulations regairing unfair discrimation?

The insureds medical history

Which of the following are generally not considered when underwriting group insurance

They earn lower interest rates than fixed annuities

Which of the following is NOT true regarding Equity Indexed Annuities?

It needs IRS approval

Which of the following is Not true regarding a non qualified retirement plan

The annuitant assumes the risks of investment

Which of the following is TRUE regrading variable annuities

single life

Which settlement option provides a single beneficiary with income for the rest of his/her life?

It has a guaranteed minimum interest rate

Why is an equity indexed annuity considered to b e fixed annuity

the refund of the original amount minus payments already made

With the cash refund option, when the annuitant dies, what would the beneficiary receive

Survivor Protection

A producer is helping a married couple determine the financial needs of their children in the event one or both die prematurely. This is a personal use of life insurance known as

Insurer

All advertisements are the responsibility of the

the interest is not taxable since it remains inside the insurance policy

All of the following are True statements regarding the accumulation at interest option Except

specified

All of the following are beneficiary designations except

They are not included as income for the employee, but are taxable upon distribution

How are contributions to a tax-sheltered annuity treated with regards to taxation?

Increasing

A return of premium term life poilcv is written as what type of coverage?

Guaranteed surrender value

According to the nonforfeiture law. If the owner decides to surrender a deffered annuity prior to annuitization, the owner is entitled to which of the following

The plan is funded by permanent insurance only

All of the following are true of Key Person insurance EXCEPT

The plan is funded by the permanent insurance only

All of the following are true of Key Person insurance EXCEPT

At distribution, all amounts received by the employee are tax free

All of the following are true regarding a qualified annuity EXCEPT

This rider is available to all insureds with no additional premium

All of the following are true regarding the guaranteed insurability rider EXCEPT

Suggesting negotiations in settling the claim

All of the following are unfair claims settlement practices except

A new Commissioner is put into office.

All of the following events will terminate a producers certificate of appointment Except

The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy

An applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day,

The insurer will pay the full death benefit from the group policv to the beneficiary

An employee quits his job on May15 and doesn't convert his group life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

profit-sharing plan

An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this term called?

Common Disaster

An insured an his wife are both involved in a head on collision. The husband dies instantly, and the wife dies 15 days later. The comapny pays the death benefit to the estate of the insured. This indicates that the life insu rance policy had what provision

Paid-Up Additions

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called?

2 years

How long must an insurer keep the receipt of a policy delivery to the policy owner if the delivery was by mail?

The balance of the loan will be taken out of the death benefit

If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?

The policy will terminate when the cash value is reduced to nothing

If an insured continually uses the automatic premium loan option to pay the policy premium

cease and desist order

If the commissioner believes that a producer may be in violation of an incurance law or regulation what may be issued

Amount of premium

In flexible premium payment annuities, the term flexible refers to what?

False Financial Statements

When an insurance agency published an advertising brochure , it emphasized the company financial stability and sound business practices. In reality, it's financial health is terrible and the company will soon have to file for bankruptcy which of the following terms best describes the advertisement

Extended Term

Which nonforfeiture option has the highest amount of insurance protection?

Notice Regarding Replacement

Which of the following documents must be provided to the policyowner or applicant during policy replacement?

Life Paid-up at Age 65

Which of the following is an example of a limited pay policy?

Premiums are not tax-deductible as a business expense

Which of the following is correct concerning the taxation of the premiums in a key person life insurance policy?

The annuitant cannot be the same person as the annuity owner

Which of the following is not true regrading the annuitant

It remains the same no matter how many children are added to the policy

Which of the following is true about the premium on the children's rider in a life insurance policy

Both annuities and life insurance use mortality tables

Which of the following is true comparison between annuities and life insurance?

Universal Life OptionA

Which of the following policies would have IRS required corridor or gap between the cash value and the death benefit?

It transfers rights of ownership from the owner to another person

Which of the following statments is true about a policy assignment?

After more than 1 year

With a single Premium Deferred Annuity SPDA when are the benefits paid?

Benefits are paid to the borrower's beneficiary.

All of the following statements are correct regarding Credit Life Insurance EXCEPT

An agent misrepresents policy benefits to convince a policy owner to replace policies

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policy owner to replace policies

All of the following would be considered rebating except

100.000

An individual purchased a 100000 joint life policy on himself and his wife. Eight years later he died in a automobile accident. How much will his wife receive from the policy

Fraud

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?

Whether an insurable interest exists between the individuals

If an applicant for life insurance policy and person to be insured by the e policy are two different people, the underwriter would be concerned about

As of the application date

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

Reduction of premium

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Interest Only Option

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. What settlement option should the policyowner choose?

The insured estate

The sole beneficiary of a life insurance policy dies before the insured if the policy owner fails to change the beneficiary before the insureds death, the proceeds of the policy will go to

It is intended to provide coverage on a date prior to the policy issue

What is the purpose of a conditional recipt?

Increasing term

What type of insurance would be used for a Return of Premium rider?

Payor Benefit

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Taxation on accumulation

All of the following would be different between qualified and nonqualified retirement plans except

Reduced Paid-Up

Which nonforfeiture option provides coverage for the longest period of time?

To provide a guaranteed income of a certain amount of life

What is the purpose of a fixed period settlement option

Income tax on distributions and no penalty.

What is the tax consequence of the amounts received from a Traditional IRA after the money was left in the tax deferred account for the beneficiary

Inspection Report

An underwriter may obtain information on an applicants hobbies, financial status, and habits by ordering an

30 days

When a resident producer changes his residence address, the insurance department must be notified within

A producers retirement

This states provided for a temporary license for all the following except

Fixed amount

When the policy owner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option

An insured is diagnosed with cancer and needs help paying for her medical treatment.

Under which of the following circumstances would an insurer pay accelerated benefits?

It is level term insurance

Which of the following best describes annually renewable term insurance

They have a guaranteed minimum interest rate

Which of the following is true for both equity indexed annuities and fixed annuities?

It allows the owner to surrender the annuity without a charge

Which of the following best describes a bail out provision?

Joint and Survivor

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select

Automatic Premium Loan

A policy owner fails to pay the premium due on his whole life policy after the grace period passes but the policy still remains in force. This is due to what provision?

The producer

A producer is charged with committing several crimes in Louisiana. Who is required to report the charges to the commissioner?

They are tax deferred until withdrawn

Under a SIMPLE plan, which of the following is true regrading taxation on both contributions and earnings?

The same face amount as in the whole life policy

Under an extended term nonforfeiture option, the policy cash value is converted to

Respond to the consumer's complaint.

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must...

Reduction of premium

The policy owner pays for her life insurance annually. Until now she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

A presentation of nonguaranteed elements of a policy

The term Illustration in a life insurance policy refers to

The insured estate

The sole beneficiary of a life insurance policy dies before the insured. If the policy owner fails to change the beneficiary before the insured death the proceeds of the policy will go to

2 years

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

The application given to a prospective insured

Which of the following is not the consideration in a policy?

Variable Universal Life Insurance

Which of the following types of policies allows for flexible premium and a variable investment group

Option B

Which option for universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Face Amount

Which policy component decreases in decreasing term insurance?


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