extra life exam practice

K. and B. have a Family Plan. K is insured for $50,000 Whole Life and B. is insured for $25,000 with a Level Spouse Rider to age 65. B. dies at age 67. How much is paid out by the insurer?

$0

An insurer has just made the news because it is insolvent. Chris has had a $1,000,000 policy with the company for five years. If Chris were to die, what is the most that would be paid out by the Guarantee Association?

$300,000

A life insurance policy was originally issued at age 35 as a Double Protection Policy. If the initial Death Benefit was $90,000, how much of the death benefit is permanent?

$45,000

Kim owns a 20 pay life policy that was purchased at age 45. The cash value and face value will be equal at age

100

A self-employed pension (HR-10) has maximum contribution limits of approximately

25% up to $50,000

The amount paid to the policyowner when a life insurance policy is surrendered is called the:

Cash value

An agent license may be issued to which of the following?

Corporation Individual or LLC Remember that corporations are people according to politics

A licensee decides to terminate his residency in this state. Which of the following would be an appropriate action?

Delivering the license to the Commissioner within 30 days.

What qualifies an individual to contribute to an IRA?

Earned income

The Commissioner of Insurance can do all of the following

Examine insurers in person or through a representative Suspend an agent's license while an investigation is pending Issue administrative orders to carry out the insurance laws

A major factor in determining insurance premiums is

Expenses of the insurer

Which of the following types of insurance covers the whole family in a single contract?

Family Protection Policy

The provision that prohibits the insurer from refusing to pay a claim after a specified time is the

Incontestability clause

What best describes the surrender charge in a deferred annuity?

It is a rear end load

In order to sell an equity-indexed life policy what is required by the agent?

Life license only

An annuity that provides a lifetime income with a guaranteed return of principal regardless of whether the annuitant lives or dies is known as

Life with refund

Which policy feature would require underwriting?

Reinstatement

A long term disability policy provides benefits for

The time specified in the contract

Which of the following is true about examination of agent records by the DOI?

They may be disclosed at any time

The purpose of the reinstatement provision is

To determine the process for reactivating coverage once a policy has lapsed

Under which of the following types of receipts is it that coverage begins immediately for a specified length of time even if the applicant is found later to be uninsurable?

Unconditional (binding) receipt

Which of the following is a statement that is guaranteed to be true, and if untrue may breach an insurance contract?

Warranty

Once a life insurance policy is reinstated, the contestability period

Will apply for two years

Klinger has a $5,000 life insurance policy issued by Life of Toledo in 1948. Klinger is drafted into the Army and sent to Korea where he dies in a helicopter crash in 1954. His policy does NOT contain the war clause exclusion or the accidental death benefit. How much will be paid by the insurer?

$5,000

B. purchased a $50,000 20-pay Life policy with the AD&D rider in 1999. He died of cancer 10 years later. How much benefit was paid to the beneficiary?

$50,000

A minor can buy life insurance on himself/herself at age 15. To purchase a policy on a third party one must be 18. But how old does one have to be to name a third party beneficiary?

15

R. has a 20 year Family Income plan. He dies after 15 years. How many years of income benefits would go to the beneficiary?

5

If someone dies as the result of military activity, the claim is settled in the following manner

A return of all unearned premiums

Lee's insurer has made all of the decisions regarding the provisions included in her policy. She finds an objectionable provision and wants to negotiate it with her insurer, but is not allowed to do so. Her only options are to reject the policy because the policy is written on a "take it or leave it basis". Which contract element does this describe?

Adhesion

The administrator of a reciprocal insurer who tracks membership and collects premiums from the members is the

Attorney-in-fact

An individual has just borrowed $10,000 from his bank on a 5-year note. The note is due in installments. What type of life insurance policy would be best suited to this situation?

Decreasing term

If an agent is guilty of commingling, the first thing the DOI will probably do is:

Issue a cease and desist order

With a Juvenile Life policy, which provision waives premiums temporarily should the owner die or become disabled?

Payor provision

Annuities may be classified in the following ways

Premium mode Number of annuitants Settlement option

Which of the following types of risk will result in the highest premium?

Substandard risk

When considering the purchase of a whole life policy, the applicant asks the difference in cash accumulation between a 20 pay life policy and a straight life policy. Which of the following statements is correct? The 20 pay life policy will accumulate cash value faster The straight life policy will accumulate cash value faster The policies will probably accumulate cash value at the same rate The cash value accumulation depends upon the dividend option selected

The 20 pay life policy will accumulate cash value faster

All of the following statements are true about a Credit Life program

The amount of insurance permissible is limited per borrower Premiums are usually paid by the borrower Benefits are paid directly to the creditor

All of the following are true about Universal Life

The insurance company deducts the cost of insurance on a monthly basis The contract will specify the deductions for policy expenses The premiums are flexible within certain guidelines The insurance company deducts the cost of insurance on a monthly basis The contract will specify the deductions for policy expenses No premiums would be required as long as there is enough to cover the monthly deductions

Agent Z takes an application for a policy and accepts a check for the first premium. The application and check are mailed to the insurer, who discovers the check is not signed. When will coverage for this policy go into effect?

When the policy is issued, delivered, and the premium is paid

An insurer is attempting to determine insurability of an applicant and decides to obtain medical information from several different sources. Which entity must be notified of this investigation?

the applicant