KY Life Insurance Exam
Reasonable expectations
A court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?
a desist order
A request from the Commissioner for a person to stop committing a violation is called
Copy of the original application
According to the entire contract provision, what document must be made part of the insurance policy?
6 months.
An insurer may delay or defer a request for a policy loan for up to
Fixed period
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 Modified Endowment Contract.
If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is
Gross premium
Mortality - Interest + Expense =
Write insurance statutes.
The Commissioner has the power and authority to perform all of the following EXCEPT
Grace period.
The automatic premium loan provision is activated at the end of the
expenses
The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the business is called
The rider is usually level term insurance.
Which is true about a spouse term rider?
a RN
Who may complete a paramedical report?
3 days
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
cost of living rider
a rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the consumer price index, is called
funding against general company financial loss
all of the following are business uses of life insurance except
term
children's riders attached to whole life policies are usually issued as what type of insurance
misrepresentation
during sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. this describes what
as of the application date
the full premium was submitted with the application for life insurance, and the policy was issues two weeks later as requested. when does the policy coverage become effective
to purchase a one-year term insurance in the amount of the cash value
the paid-up addition option uses the dividend
workers compensation
which of the following is not an example of a business use of life insurance
Surplus lines insurer.
A nonadmitted insurer who provides insurance coverages that are not available from an admitted insurer is called
survivor protection
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Fulfill post secondary education requirements.
All of the following are requirements for insurance license applicants EXCEPT
The amount of insurance on the life of any debtor may exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor.
All of the following statements are TRUE concerning Debtor Groups EXCEPT
It will increase because the insured will be 5 years older than when the policy was originally purchased.
An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?
Refund the premiums paid.
An insured committed suicide one year after his life insurance policy was issued. The insurer will
Interest-sensitive Whole Life.
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an
Executive is the owner, and the executive pays the premium.
In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?
Investment Experience.
L&D Insurance earned a higher return on their invested premiums than they expected to. They will use this money to pay dividends on life insurance policies. This is called
The value of the policy
The collateral for policy loans can be which of the following?
premium
The consideration paid to the insurance company for life insurance protection is called a (n)
To purchase a smaller amount of the same type of insurance as the original policy.
The paid-up addition option uses the dividend
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?
Family Income Policy
W owns a policy in which she is covered as the bread-winner with permanent insurance and with decreasing term insurance in the form of a rider. What type of policy is this?
Coverage until death or age 100
What characteristic makes whole life permanent protection?
Favorable tax treatment
What is the advantage of having a qualified annuity?
6 months
What is the waiting period on a Waiver of Premium rider in life insurance policies?
Issue the policy anyway and pay the face value to the beneficiary.
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will
December 31 of the year that contains the fifth anniversary of the owner's death.
When must an IRA be completely distributed when a beneficiary is not named?
At the time of application
When must insurable interest exist in a life insurance policy?
Funds exceeding the premium paid are taxable as ordinary income.
Which is TRUE about the cash surrender nonforfeiture option?
Application
Which is the primary source of information used for insurance underwriting?
Attempting in good faith to effect prompt, fair and equitable settlements of claims on which liability has become reasonably clear.
Which of the following are NOT improper claims practices if committed in conscious disregard for the law or if committed with such frequency as to indicate a general business practice to engage in that type of conduct?
pension plans
Which of the following are established by the employer to provide specific benefits to eligible employees at retirement?
It may last for the lifetime of the annuitant.
Which of the following is TRUE regarding the annuity period?
The chief administrator of the insurer is called an "attorney-in-fact".
Which of the following is a characteristic of a Reciprocal Insurance Exchange?
It provides income the beneficiary cannot outlive.
Which of the following is true regarding a single life settlement option?
Dividends are not taxable.
Which of the following is true regarding taxation of dividends in participating policies?
PIA
Which of the following refers to the amount of retirement benefits a worker receives under Social Security based on the worker's earnings and retirement age?
Automatic premium loan
Which of the following riders can be included in a life insurance policy without additional premium due?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
Which of the following statements about the reinstatement provision is true?
Insuring clause
Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?
Participating
Which type of insurance policy pays dividends if there are excess premiums over the cost of providing the insurance?
Monthly premium waiver and monthly income
Z falls from the roof of his house while fixing it and damages his spinal column enough to render him disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will Z receive?
revocable beneficiary
a policy owner who is also the insured wants to name her husband as the beneficiary of her life policy. she also wishes to retain all the rights of ownership. the policy owner should have her husband named as the
an employee's elderly mother
all of the following would be considered dependents under a group life policy except
higher
all other factors being equal, what would the premium be life in a survivorship life policy as compared to the premium in a joint life policy
fair credit reporting act
an applicant is denied insurance because of information found on a consumer report. which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company
mortality
fewer of L&D insurance's insureds died than were actuarially projected this year, therefore, fewer death claims were paid. when l&d insurance uses the money saved on death claims to pay life insurance dividends, it is called
until the beneficiary's death
how long will the beneficiary receive payments under the single life settlement option
4.5 days
if a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply
whether an insurable interest exists between the individuals
if an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
require evidence of insurability
if an employee wants to enter the group outside of the open enrollment period, to reduce the adverse selection, the insurer may
considered true to the best of the applicant's knowledge
representations are written or oral statements made by the applicant that are
agents
solicitors are employed by
depends on the performance of a separate account
the death benefit in a variable universal life policy
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
2.2 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
3
under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer then makes a matching contribution up to an amount equal to what percent of the employee's annual wages
extended term
under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policy owner
coverage until death or age 100
what characteristic makes whole life permanent protection
it is a period during which payments into the annuity grow tax deferred
which of the following is true regarding the accumulation period of an annuity
Pay the policy proceeds only if it would have issued the policy.
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
Return the policy to the insurer.
Agent D submitted an application for life insurance on client A. No money was sent with the application. When Agent D attempted to deliver the policy, he discovered that A had suffered a heart attack since the application was taken. The agent should
It is level term insurance.
Which of the following best describes annually renewable term insurance?
19 years and 8 months
a 20 year family income policy was purchased effective April 1, 2001. the insured died four months later on August 1, 2001. the beneficiary receives monthly income for
guaranteed insurability option
an individual is purchasing a life insurance policy with a face value of $25,000. while this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. which of the following options should be included in the policy?
industrial life
an insured has a life insurance policy with a face amount of $500. he pays a premium each week to the agent who sold him the policy. what kind of policy does the insured have
pay a reduced death benefit
an insured has had a life insurance policy that he purchased 3 years ago when he was forty years old. he is killed in an automobile accident and it is discovered that he is actually 45 years old, not 43, as stated on the app. what will the company do?
whether an insurable interest exists between the individuals
if an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about what
decreases
if an insured changes his payment plan from monthly to annually what happens to the total premium
reserves
in order to assure that an insurer can cover liabilities, insurance regulators require it to set aside funds called
cash values can be borrowed at any time
what does "liquidity" refer to in a life insurance policy
retirement benefit
what is the primary purpose of qualified plans
when the application is signed and a check is given to the agent
when is the earliest a policy may go into effect
the donor must give all rights of ownership to the charity
when making a charitable gift of a life insurance policy, what must the donor do to receive the tax advantages available
the time is not specified so long as the total indebtedness does not exceed the policy cash
when must a life insurance policy loan be repaid
reduced paid-up
which nonforfeiture option provides coverage for the longest period of time
the period of time during which accumulated money is converted into income payments
which of the following best describes what the annuity period is
a whole life insurance policy is exchanged for a term insurance policy
which of the following is not an allowable 1035 exchange
debtor in creditor
which of the following is not an example of an insurable interest
policy delivery
which of the following is the most common time for errors and omissions to occur on the part of an insurer
the cost of coverage is based on the ratio of men and women in the group
which of the following statements about group life is correct
a debtor has an insurable interest in the life of a lender
which of the following statements is not true concerning insurable interest as it applies to life insurance
creating an estate
which of the following will not be an appropriate use of a deferred annuity
life insurance proceeds
which of the following would be the best option that would help the surviving spouse of the insured to put her child through daycare after the insured's death
family income policy
which special policy combines decreasing term insurance with whole life insurance to provide the insured's family with a monthly income upon the death of the insured, while maintaining permanent coverage until the end of the income payments