Licensing Life Exam

An applicant for life insurance may question the validity and source of any consumer information developed under the:

Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)

All of the following groups are considered eligible for group life insurance except

Volunteer religious groups

The Waiver of Premium provision of a life policy allows the insurer to take which of the following actions

Waive an insured's becomes totally disabled before a certain age

At which of the following times MUST a life insurance applicant be informed of their rights under the Fair Credit Reporting Act?

When the policy is delivered

An individual may obtain a temporary insurance producer's license without passing the licensing examination if the individual:

is a deceased licensed producer's next of kin

Which of the following statements about Credit Life Insurance is correct?

it may be provided through a group or individual policy

Reinstatement of a life insurance policy requires an insured to take all of the following actions EXCEPT:

make collateral assignment to the insurer

Which of the following policy provisions provides for continuation of coverage despite nonpayment of premiums?

nonforfeiture option

Federal income tax laws generally treat proceeds of life insurance policies as:

nontaxable

the PRIMARY purpose of an inspection report is to assess an applicant's:

personal characteristics

In life insurance, the free look provision begins on the:

policy delivery date

if an applicant for life insurance submits a completed application to a producer without paying the first premium, coverage becomes effective when the:

policy is delivery and the premium paid

The right to change a beneficiary designation is reserved for the:

policyowner

In life insurance, insurable interest must exist at the time the:

producer writes an application on a proposed insured

An applicant's statements on an application are considered to be legal:

representations

Peter wants to name her husband as the beneficiary of her life policy. However, she wishes to retain all of the rights of ownership. Peter should have her husband named as the:

revocable beneficiary

Which of the following provisions in a life policy specifies the manner in which proceeds will be paid to a beneficiary on the death of the insured?

settlement options

Under the Social Security Retirement Benefits, all of the following facts will influence how much a retiring individual will receive as a monthly income benefit EXCEPT the individual's:

sex

When a producer submits an insurance application to the company, the producer must take all of the following actions EXCEPT:

submit a completed medical information report

A life policy is usually contestable due to material misrepresentation on the application for a period of:

2 years

An insured owns a $10,000 policy with a $4,000 cash value and a 6% interest rate. On January 1, the insured borrows $500 and pays one year's interest in advance. During the year, the insured does not repay ant part of the loan or interest. If the insured dies on December 31, the beneficiary will be entitled to a MAXIMUM of:

$9,500

Which of the following situations is considered rebating?

A producer returns a portion of the commission to an insured

the insurance commissioner may examine the records of an insurance company at which of the following times?

AT any time the insurance commissioner sees fit

In which of the following contracts is the death benefit called the principal sum

Accidental Death and Dismemberment (AD&D)

A variable life contract must contain all of the following provisions except:

Accidental death

Which of the following terms refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another?

Assignment

Two business partners own life insurance on each other. If one partner dies, which of the following contracts will allow the other partner to buy 100% of the business interest?

Buy and Sell Agreement

An insurance producer who makes false statements that harm the reputation of another insurance company is guilty of:

Defamation

Which of the following retirement plans is tax-qualified?

Defined contribution

Which of the following policy provisions states that the application is part of the policy?

Entire Contract

Which of the following features allows an insurance policy to remain in force for a specified number of days beyond the premium due date?

Grace period provision

Which of the following statements about a Renewable Term policy is CORRECT?

It is renewable at the option of the insured.

A contract that promises to pay an income to an insured until his/her death is called:

Life Annuity

Richard has just graduated from law school. Richard knowns his future earnings will be much higher than they are now, but wants to purchase a permanent policy now to cover future needs. Which of the following policies would BEST suit Richard's needs?

Modified Whole Life

All of the following policies may be examples of third party ownership EXCEPT:

Modified life

All of the following elements must be included in policy summary given to a purchaser of life insurance EXCEPT the:

Names and addresses of each beneficiary

Controlled business is defined as insurance a producer writes on all of the following individuals EXCEPT the producer's:

Neighbors

An insured intentionally understates her age on her application for a life policy. At death, the insurer will take which of the following actions?

Pay a reduced Death benefit on the insured's actual age

If an insured commits suicide after the Suicide clause in the insured's life insurance policy has expired, the insurer will take which of the following actions?

Pay the death benefit

A producer takes applications from identical twins who want to buy the same type of policy in the same amount. The insurer issues the policies as applied for, but charges a 25% higher premium for one of the policies. The different in premiums is probably due to which of the following factors?

Risk classification

All of the following provisions must be included in group life insurance policies issued in this state EXCEPT

Suicide

A producer may be quality of misrepresentation if the producer:

Tells an insured the deductible on a policy is less than it actually is

A client needs a substantial amount of protection but has limited financial resources. Which of the following insurance policies would BEST meet the client's needs?

Term life

A Policyowner names his wife as the primary beneficiary of his Universal Life policy on a revocable basis. he also names his 3 children as his secondary beneficiaries and his estate as his tertiary beneficiary. If the policyowner's wife predeceases him and then he dies, who will receive the policy proceeds?

The children

Which of the following persons is authorized to enforce state insurance laws?

The insurance commissioner

An insurance producer takes an application for a life insurance policy but does not collect the initial premium. On delivery of the policy to the proposed insured, the producer must collect the initial premium and which of the following?

The insured's signed statement of continued good health

The life insurance and annuity replacement rule is designed for which of the following purposes?

To ensure that policyowners receive adequate information on which to base a replacement decision

Which of the following policies is an interest-sensitive form of permanent protection?

Universal life

An insurance company doing business in this state must operate under:

a certificate of authority

Which of the following annuities would BEST suit the needs of a 35 year old factory worker who is concerned about inflation and wants to establish a retirement plan?

a flexible premium variable annuity

Which of the following types of insurance policies is EXEMPT from the life insurance and annuity replacement rule?

a group life

An individual who, for the purpose of collecting premiums, acts for another in negotiating a contract of insurance is considered to be:

a producer

A payor benefit rider provides which of the following benefits?

a temporary waiver of premium should the payor die, until the insured reaches a predetermined age

if a policy contains a guaranteed insurability rider, the insured has the right to purchase:

additional coverage at specified ages

In a life policy, a special benefit prepays a portion of the death benefit during the lifetime of an insured in the event of a specified illness is called:

an acceleration of life insurance benefit

An individual appointed by an insurance company to solicit applications for a policy of insurance on its behalf is known as:

an insurance producer

A contract that has as its basic function the systematic liquidation of accumulated assets through periodic payments is called an:

annuity

Which of the following statements about replacement of existing life insurance is correct?

both the applicant for insurance and the insurance producer must sign a statement stating whether existing insurance is to be replaced

If life insurance policy applicant is classified as a substandard risk, the insurance company will MOST likely:

charge an extra premium

Which of the following group life plans requires at least 75% of the eligible members to partcipate?

contributory

Which of the following statements is CORRECT about group life conversion privileges?

death during the conversion period is covered even if the departing employee chose not to convert the policy

In the event of an insured's death, which of the following provides an income for the family during a designated period of time followed by a lump sum death benefit?

family income rider

An insurance company formed under the laws of a state other than this state is known as:

foreign company

The major difference between a mutual insurance company and a stock insurance company is the:

form of ownership each company is permitted

An employer can deduct premium payments as an ordinary business expense for which of the following life coverages?

group

The insurance commissioner may revoke or suspend a producer's license if the producer:

has forged another person's name on an insurance application

The PRIMARY reason for selecting a variable whole life policy instead of a traditional whole life policy is that the variable whole life policy:

has the potential to earn a higher rate of return on the cash value

In order for nonresident applicants to be eligible for an insurance producer license in this state, they MUST:

hold a like license in another state

a life insurance application is incomplete if it is missing the signature of which of the following?

the proposed adult insured

Which of the following statements is CORRECT about insurance producers who fail to satisfy the continuing education requirements?

their licenses will be terminated

Which of the following statements is CORRECT about the paid-up additions in a participating Whole life policy?

they are purchased on an attained age basis.

which of the following statements is NOT correct about representations?

they are true in every aspect

Which of the following terms may be used in advertisements for life insurance?

universal life plan

If an Adjustable Life policyowner makes an additional premium payment, the policy may be affected in all of the following ways EXCEPT the:

value of the Nonforfeiture Options may decrease

A type of annuity in which the cash values are invested in securities is called:

variable