Life and Health
A nonadmitted insurer who provides unique insurance coverage that is not available from an admitted insurer is called a/an? A.) Surplus lines insurer B.) Assessment mutual insurer C.) Capital stock Insurer D.) Reciprocal insurer
A
Each person licensed as an agent or solicitor is required to complete how many hours of approved continuing education instruction every 2 years?a)24 b)22 c)26 d)18
A
What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident? A.) Nonforfeiture Clause B.) Common Disaster Clause C.) Spendthrift Clause D.) Settlement Clause
B
insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe? a)Unilateral b)Conditional c)Personal d)Adhesion
D
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a)Cost of living provision. b)Nonforfeiture option. c)Guaranteed insurability rider. d)Paid-up additions option.
c
Which of the following riders would NOT cause the Death Benefit to increase? a)Guaranteed Insurability Rider b)Cost of Living Rider c)Accidental Death Rider d)Payor Benefit Rider
d
Which of the following is an example of limited-pay life policy? A.) Level term life B.)Straight Life C.) Life Paid-up at Age 65 D.) Renewable Term to Age 70
C
Which of the following types of agent authority is also called "Perceived authority"? A.) Express B.) Implied C.) Fiduciary D.) Apparent
D
A producer agent must do all of the follwing when delevering a new policy to the insured EXCEPT A.) Disclose commissions earned from the sale of the policy B.) Explain the policy provisions, riders, and exclusions C.) Collect any premium due D.) Explain the rating procedures if the policy is rated differently than applied for
A
All of the following are examples of risk retention EXCEPT A.) Premiums B.) Deductables C.) Copayments D.) Self-insurance
A
When an annuity is written, whose life expectancy is taken into account? a)Annuitant b)Beneficiary c)Life expectancy is not a factor when writing an annuity. d)Owner
A
A 60-year-old participant in a 401(K) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true? A.) The amount distibuted is subject to ordinary income tax. B.) The amount of distribution is reduced by the amount of a 20% withholding tax C.) No taxes are due since the plan participant is over age 59 1/2 D.) There is a 10% early withdrawal penalty
B
What type of insurance would be used for a Return of Premium rider? A.) Annually Renewable Term B.) Increasing Term C.) Level Term D.) Decreasing Term
B
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that? A.) Second-to-die B.) Family income policy C.) Joint Life policy D.) Survivorship Life policy
C
Which of the following terms is used to name the nontaxed return of unused premiums? a)Interest b)Surrender c)Dividend d)Premium return
C
A Universal Life insurance policy is best described as a/an A.) Variable life with a cash value account. B.) Whole life policy with two premiums: target and minimum C.) Flexible premium Variable Life policy D.) Annually renewable term policy with a cash value account.
D
Which of the following will NOT be an appropriate use of a deferred annuity? A.) Accumulating retirement funds B.) Accumulating funds in an IRA C.) Funding a child's college education D.) Creating an estate
D
Who is a person, other than a viator, that enters into a viatical settlement contract? a)Purchaser b)Effectuator c)Broker d)Provider
D
Which of the following is true regarding a waiver of a surrender charge on an annuity contract? a)The charge can only be waived if the annuitant needs the funds for medical expenses. b)The surrender charge will be applied to all premature surrenders. c)The surrender charge waiver only applies to immediate annuity. d)The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days.
d
When would a 20-pay whole life policy endow? a)At the insured's age 65 b)After 20 payments c)In 20 years d)When the insured reaches age 100
d
All of the following statements are correct regarding credit life insurance EXCEPT a)Benefits are paid to the borrower's beneficiary. b)The amount of insurance permissible is limited per borrower. c)Premiums are usually paid by the borrower. d)Benefits are paid to the creditor.
a
All of the following are requirments for life insurance illustrations EXCEPT A.) They must indentify nonguaranteed values B.) They must differentiate between guaranteed and projected amounts C.) The must be apart of the contract D.) They msut only be used as approved
C
An agent changes his residential address. Within how many days must the superintendent be notified? A.) 10 B.) 20 C.) 30 D.) The superintendent does not need to be notified. Only changes in business addresses need to be reported
C
Which of the following is NOT true regarding the annuitant? a)The annuitant receives the annuity benefits. b)The annuitant must be a natural person. c)The annuitant cannot be the same person as the annuity owner. d)The annuitant's life expectancy is taken into consideration for the annuity.
c
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy? a)$20,000 b)$25,000 c)$50,000 D) The fae amount will be determined by the insurer
C
An underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require? a)A complete medical record b)Sworn health affidavit from the applicant c)Statement of Continued Good Health d)Attending Physician Statement
d
Who is the annuity owner? A.) The person whose life the annuity is written B.) the insurer C.) The person who purchases the annuity D.) The person who receives the benefits
C
All of the following are true regarding a decreasing term policy EXCEPT A.) the death benefit is $0 at the end of the policy term. B.) The contract pays only in the event of death during the term and there is no cash value. C.) The face amount steadily declines throughout the duration of the contract. D.) The payable premium amount steadily declines throughout the duration of the contract.
D
All of the following statements are true regarding an Ordinary (Straight) Life policy EXCEPT A.) It is funded by a level premium B.) It builds cash value C.) If the isnured lives to age 100, the policy matures, and the face amount is paid to the insured D.) It does not have a guarnteed death benefit
D
For how long is the certificate of prelicensing course completion valid? A.) Indefinitely B.) 120 days C.) 2 years D.) 180 calendar days
D
In this state the owner gets a "free look" of a specified number of days from A.) Acceptance of the risk by the insurer B.) The date of the application C.) Acceptance of the application D.) Delievery of the policy
D
Who makes up the Medical Information Bureau? a)Hospitals b)Former insured c)Physicians and paramedics d)Insurers
D
A tornado that destroys property would be an example of which of the following? a)A peril b)A pure risk c)A loss d)A physical hazard
A
All of the following information about a customer must be used in determining annuity suitability EXCEPT A.) Beneficiary's age B.) Tax status C.) Financial experience D.) Annual income
A
All of the following would be condsidered an insurance transaction EXCEPT A.) Obtaining an insureance license B.) Soliciting a policy C.) Advising a policyholder regarding a claim D.) Negotiating coverage
A
Which of the following is NOT true regarding policy loans? A.) policy loans can be repaid at death B.) An insurer can charge interest on outstanding policy loans C.) A policy loan may be repaid after the policy is surrendered D.) Money borrowed from the cash value is taxable.
D
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? a)Revocation of license b)$2,500 c)$1,000 d)$100 per violation
b
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums? a)The insured's premiums will be waived until she is 21. b)The premiums will become tax deductible until the insured's 18th birthday. c)Since it is the policyowner, and not the insured, who has become disabled, the life insurance policy will not be affected. d)The insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums.
A
All of the following are true regarding the waiver of cost of insurance rider EXCEPT A.) The rider expires when the insured reaches age 60 B.) The rider waives insurance costs in the event the insured becomes disabled C.) The rider is only applicable to universal life policies D.) The rider cannot waive the cost of premiums that accumulate cash value
A
An Adjustable Life policyowner can change which of the following policy features? a)The coverage period b)The mortality expense c)The investment account d)The insured
A
An insured wants to transfer his personal insurance policy to a friend. Under what conditions would this be possible? a)The insured will need a written consent of the insurer. b)It is impossible to transfer a policy. c)The insured would have to surrender his policy to the insurer, and his friend could then ask to buy it. d)The insured can transfer the policy to his friend and then notify the insurer of the change.
A
Each Viatical settlement contract entered into in this state must provide the viator with an unconditional right to rescind the contract for at least 15 days after A.) Receipt of the viatical settlement proceeds B.) Notifying the insurer of the assignment C.) Signing the agreement D.) Assigning the life insureance policy
A
The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the a)Entire contract. b)Total contract. c)Aleatory contract. d)Complete contract.
A
Under which of the following conditions would life insurance proceeds be taxable by the federal government? A.) If there is a transfer for value B.) If collaterally assigned to a lender C.) If taken as a lump sum D.) If paid to the policyowner
A
What insurance concept is associated with the names Weiss and Fitch? A.) Guides describing company financial integrity B.) Policy dividends C.) Types of Mutual companies D.) Index used by stock companies
A
What provision in an insurance policy extends coverage beyond the premium due date? a)Grace period b)Free look c)Automatic premium loan d)Waiver of premium
A
What type of interest rate is guaranteed in a universal life policy? A.) Contract interest rate B.) Nominal interest rate C.) Adjuestable interest rate D.) Current interest rate
A
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option? A.) Extended term B.) Paid-up additions C.) Cash surrender value D.) Reduced paid-up
A
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? A.) Consideration B.) Legal Purpose C.) Contract of adhesion D.) Acceptance
A
When an insured terminates membership in the insured group, the insured can convert to A.) Whole life without proof of insurability B.) Whole life with proof of insurability C.) Term without proof of insurability D.) Term with proof of insurability
A
When will fraud be considered a felony? A.) When the amount of the claim is above $1,000 B.) Only when the amount of the claim is about $100,000 C.) Never; fraud is always considered a misdemeanor D.) Any type of fraud is considered a felony
A
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? a)Implied b)Apparent c)Assumed d)Express
A
Who assumes control over an insurance company's funds and management if they become insolvent? A.) Department of Insurance B.) The policyholders or stock owners of the company C.) State and attorney general D.) National Association of Insurance commissioners
A
All of the following are required to qualify for a resident license EXCEPT a)An applicant that has passed at least one examination. b)An applicant that is at least 21 years old. c)An applicant that has not committed any act that is a ground for the denial, suspension, or revocation of a license. d)An applicant that is of good reputation and character.
B
All of the following are ture of group life insurance EXCEPT A.) When the insured terminates memebrship in the group the coverage can be converted to Whole life. B.) The insureds each own their own contract C.) Evidence of insurability is usually not required D.) Premium rated are based upon the average age, gender and purpose of the group
B
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a)Nonforfeiture option. b)Guaranteed insurability rider. c)Paid-up additions option. d)Cost of living provision.
B
In Ohio, the written statement that describes all relevant elements of the policy must be titled a)The Policy Provisions .b)Statement of Policy Cost and Benefit Information. c)The Policy Illustration. d)The Buyer's Guide.
B
Under what circumstances may a life insurance agent deliver a policy that is dated up to 3 months before the application was taken? a)To shorten the period of contestability b)To avoid an increase in premium rate for the insured c)To meet sales quotas established by the insurer d)To make a policy effective during a period when the agent's appointment was in force
B
What must happen when an individual policy or annuity has been personally delivered to the policyowner? a)A notary public must witness the exchange. b)The policyowner must sign a delivery receipt. c)The policyowner must pay the annual premium in full. d)The producer must go over the policy with the policyowner.
B
When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all of the premiums paid. Which rider is attached to the policy? a)Premature death b)Return of premium c)Cost of living d)Decreasing term
B
Which of the following best describes what the annuity period is? A.) The period of time from the effective date of the contract to the date of its termination B.) The period of time during which accumulated money is converted into income payments C.) The period of time from the accumulation period to the annuitization period D.) The period of time during which money is accumulated in an annuity
B
Which of the following is NOT an allowable 1035 exchange? A.) A life insurance policy in exchange for an annuity B.) A whole life insurance policy in exchange for a term insurance policy C.) A whole life insurance policy is exchanged for a universal life insurance policy D.) An annuity is exchanged for another annuity
B
Which of the following is the closest term to an authorized insurer? A.) Legal B.) Admitted C.) Certified D.) Licensed
B
Which of the following is true about the premium on the children's rider in a life insurance policy? A.) It decreases when an adopted child is added to the policy B.) It remains the same no matter how many children are added to the policy C.) It decreases when the oldest child reaches the age of 21 D.) It increases when a newborn baby is added to the policy
B
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? A.) Slandering B.) defamation C.) Undercutting D.) Twisting
B
Which of the following terms refers to the nontaxable portion of each annuity benefit payment? A.) Principal B.) Cost base C.) Tax base D.) Interest
B
Which option for Univerisal life insurance allows the benefciaries to collect both the death benefit and cash value upon the death of the insured? A.) Option A B.) Option B C.) Corridor option D.) Variable option
B
Which statement regarding insurable risks is NOT correct? A.) An insurable risk must involve a loss that is definite as to cause, time, place, and amount B.) Insureds cannot be randomly selected. C.) Insurance cannot be mandatory D.) The insurable risk needs to be statistically predictable
B
Who can make a fully deductible contribution to a traditional IRA? A.) A person whose contributions are funded by a return on investment B.) An individual not covered by an employer-sponsored plan who has earned income C.) Anybody: all IRA contributions are fully deductible regardless of income level. D.) someone making contributions to an Educational IRA
B
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 A.) Living need rider B.) Payor rider C.) Cost of living rider D.) Accelerated benefit rider
C
According to the life insurance replacement regulations, which of the following would be an example of policy replacement? A.) Term insurance is changed to a whole life policy B.) A lapsed policy is reinstated within a specific timeframe. C.) A policy is reissued with a reduction in cash value D.) A term policy expires, and the insured buys another term policy.
C
All of the following are regulated areas of the insurance industry EXCEPT a)Trade practices. b)Investments. c)Commissions. d)Agents.
C
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? A.) Representation B.) Adhesion C.) Consideration D.) Good faith
C
An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that? a)Agent's Report b)Underwriter's Report c)Inspection Report d)Medical Information Bureau's report
C
Annuities can be used to fund which of the following A.) Group life insurance B.) Estate creation C.) Retirement plans D.) Variable life insurance
C
If an agent has an administrative action taken against him or her in another jurisdiction, how many days does the agent have to report this to the Superintendent after the final disposition? a)7 days b)15 days c)30 days d)45 days
C
Mike named his wife Lisa as primary beneficiary of his life insurance policy. No contingent beneficiary was named on the policy. Mike and Lisa then divorced. Mike died 5 years later, but never changed the primary beneficiary on his policy. Who will receive the benefits from Mike's policy? A.) The benefits will be split between Lisa's and Mike's estate B.) The state C.) Mike's estate D.) Lisa
C
Upon surrender of a life insurance policy, any cash value accumulation in excess of the premium payment is A.) Taxed as income on 50% of the excess B.) Assessed a fine of 10% of the excess C.) Taxed as ordinary income D.) Not taxed
C
What is the advantage of reinstating a policy instead of applying for a new one? A.) The face amount can be increased B.) The cash values have gained interest while the policy was lapsed C.) The orginal age is used for premium determination D.) Proof of insurability is not required
C
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary? a)Single life b)Fixed-amount c)Life income with period certain d)Joint and survivor
C
Which nonforfeiture option provides coverage for the longest period of time? a)Paid-up option b)Accumulated at interest c)Reduced paid-up d)Extended term
C
Which of the following is correct regarding credit life insurance? A.) it insures the of a creditor B.) It has maximum term of 20 years. C.) It insures the life of a debtor D.) It is purchases on an installment basis.
C
Which of the following is true regarding a joint life annuity? A.)The payments go to a beneficiary upon the last death B.) The payments go to the surviving annuitant after the first death C.) The payments stop at the first death D.) The payments stop at the last death
C
Which of the following is true regarding examination of financial affairs of insurers? A.) Examinations are conducted by the NAIC B.) Examinations must be conducted at least annually C.) Examination expenses are the responsibility of the insurer D.) The superintendent must examine all insureres: domestic, foreign, and alien
C
Which of the following would be sufficient violation to warrant rejection, revocation, or suspension of an insurance agent's lincense? A.) An unintentional misrepresentation of the terms of a contract B.) A moving violation ticket C.) A denied license in another state D.) Acting as a fiduciary
C
Which universal life option has a gradually increasing cash value and a level death benefit A.) Term insurance B.) Option B C.) Option A D.) Juvenile life
C
which of the following best describes the MIB? A.) It is a member organization that protects insured agaisnt insolvent insurers. B.) It is rating organization for health insurance C.) It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance D.) It is a government agency that collects medical infomration on the insured from the insurance companies.
C
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT a)The annual dividend is retained by the company. b)The interest is credited at a rate specified by the policy. c)The policyholder has the right to withdraw the accumulations at any time. d)The interest is not taxable since it remains inside the insurance policy.
D
All of the following statements are true regarding installments for a fixed amount EXCEPT A.) Value of the account and future earnings will determine the time period for the benefits B.) The option pays a specific amount until the funds are exhausted C.) The annuitant may select how big the payments will be D.) The payments will stop when the annuitant dies.
D
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT A.) It will pay the benefit only for a designated period of time B.) The payments are not guaranteed for life C.) The insurer determines the amount for each payment D.) It is a life contingency option
D
An aleatory contract is basded on what kind of exchange? A.) Equal amounts pay in and pay out B.) Balanced benefits C.) Exchange of equal obliigations D.) Unequal exchange of values
D
An insured owns a term policy with a guaranteed renewable option. When the end of the policy draws near, the insured answers medical questions in order to prove insurability and qualifies for a discounted premium rate. Which option best describes this scenario? a)Preferred premium reduction b)Contract review c)Revision of consideration d)Re-entry
D
An insured purchased an individual life insurance policy with a face amount of $15,000. He pays a premium each month. What type of policy is that? a)Industrial life b)Home service insurance c)Commercial life d)Ordinary life
D
If an annuitant dies before annuitization start date, which of the following is true? A.) The interest will not be tax-deferred B.) The interest is tax-free if the beneficiary is a spouse C.) The interest is nontaxable D.) The interest is taxable
D
The causes of loss insured against in an insurance policy are known as A.) losses B.) Risks C.) Hazards D.) Perils
D
What is the exclusion ratio used to determine? A.)The premium amounts to be included in taxes. B.) The interest base and the payout base C.) The benefit amounts to be paid to the annuitant D.) The annuity benefit to be excluded from taxes.
D
What is the purpose of a free-look period in insurance policies? A.) It allows the insrued 10 days to pay the initial premium B.) It allows the insurer to temporarily suspend coverage after an insured's disability C.) It allows the insurer to cancel coverage if a misrepresentation is discovered D.) It allows the insured to reject the policy with a full refund
D
What is the waiting period on a Waiver of Premium rider in life insurance policies? A.) 30 days B.) 3 months C.) 5 Months D.) 6 months
D
What is the waiting period on a Waiver of Premium rider in life insurance policies? A.) 30 days B.) 3 months C.) 5 months D.) 6 months
D
What type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called A.) Fixed period B.) Fixed amount C.) Joint life D.) Joint and survivor
D
When is the earliest a policy may go into effect? a)When the first premium is paid and the policy has been delivered b)When the insurer approves the application c)After the underwriter reviews the policy d)When the application is signed and a check is given to the agent
D
Which nonforfeiture option has the highest amount of insurance protection? A.) Conversion B.)Decreasing Term C.) Reduced paid-up D.) Extended Term
D
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? A.) Jumping Juvenile B.) Juvenile Premium Provision C.) Waiver of Premium D.) Payor Benefit
D
Which of the following best describes a bail-out provision? A.) It waives the surrender charge for the annuitants contines to a long-term care facilitiy B.) It allows the owner to receive higher interest rate at certain timeframe. C.) It decreases the annuity surrender value D.) It allows the owner to surrender the annuity without a charge
D
Which of the following individuals must have insurable interest in the insured? A.) Beneficiary B.) Underwriter C.) Producer D.) Policyowner
D
Which of the following is NOT true of Section 1035 Policy Exchanges? a)It requires an absolute assignment of the existing policy to the replacing company who surrenders the contract and issues a replacement policy. b)It is an IRS Code which permits like kind exchanges of property. c)It is typically used when exchanging or replacing a less competitive life policy with a more competitive life policy. d)Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days.
D
Which of the following is NOT ture regarding a certificate of Authority? A.) It may be necessary for transacting business is a specific state. B.) It is equivalent to an insurance license C.) It is issued by the state department of insurance D.) It is issued to a group insurance participants
D
Which of the following is true about warranties? a)If they aren't true, the insurer must file with court to void the policy. b)They are true to the best of the agent's knowledge. c)They are true to the best of the applicant's knowledge. d)They are guaranteed to be true.
D
Which of the following statements is NOT true concerning insurable interest as it aplies to life insurance? A.) Business partners have an insurable interest in each other B.) A husband or wife has insurable interest in their spouce C.) An individual has an insurable interest in his or her own life D.) A debtor has an insurable interest in the life of the lender
D
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have? a)Universal life b)Adjustable life c)Term life d)Limited pay
a
The minimum interest rate on an equity indexed annuity is often based on a)An index like Standard & Poor's 500. b)The returns from the insurance company's separate account. c)The annuitant's individual stock portfolio. d)The insurance company's general account investments.
a
When would life insurance policy proceeds be included in the insured's taxable estate? a)When there are any incidents of ownership at the time of death b)If the insured's spouse is the policyowner c)If the insured transfers ownership of the policy or makes a gift of the policy 5 years prior to his or her death d)When the beneficiary is named in the policy
a
Which of the following statements about group life is correct? a)The cost of coverage is based on the ratio of men and women in the group. b)The premiums are higher than in an individual policy because there is no medical exam. c)The group sponsor receives a Certificate of Insurance. d)The policy can be converted to an individual term insurance policy.
a
When a viator sells a life insurance policy, a)Collateral assignment is given to the insurance company. b)Absolute assignment is given to the viatical settlement company. c)Collateral assignment is given to the viatical settlement company. d)Absolute assignment is given to the insurance company.
b
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 a)Survivorship insurance b)Juvenile protection provision c)Survivor protection d)Life planning
c
Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?a)Reciprocal b)Fraternal c)Stock d)Mutual
c
Which of the following is NOT the consideration in a policy? a)The premium amount paid at the time of application b)The promise to pay covered losses c)The application given to a prospective insured d)Something of value exchanged between parties
c
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? a)Reinstatement b)Reduced paid-up option c)Automatic premium loan d)Extended term
c
How many days after being licensed to place business transactions in Ohio must an insurer have an antifraud program in place? a)15 days b)30 days c)45 days d)90 days
d
If an annuitant dies before annuitization occurs, what will the beneficiary receive? a)Either the amount paid into the plan or the cash value of the plan, whichever is the lesser amount b)Amount paid into the plan c)Cash value of the plan d)Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
d
Which of the following is NOT true regarding policy loans? a)Policy loans can be repaid at death. b)An insurer can charge interest on outstanding policy loans. c)A policy loan may be repaid after the policy is surrendered. d)Money borrowed from the cash value is taxable.
d
A couple near retirement is planning for their golden years. They want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose? A.) Joint and survivor B.) Joint life C.) Life with a period certain D.) Straight life
A
A producer who fails to segregate premium monies from his own personal funds is guilty of a)Commingling. b)Larceny. c)Embezzlement. d)Theft.
A
A prospective insured receives a conditional receipt but dies before the policy is issued. The isurer will A.) Automatically pay the policy proceeds B.) Pay the policy proceeds only if it would have issued the policy C.) Pay the policy proceeds up to an established limit. D.) Not pay the policy proceeds under any circumstances.
B
A viatical settlement is arranged between a viatical company and a/an A.) Lender B.) Terminally ill insured C.) Insurance producer D.) Beneficiary
B
All of the following could own group life insurance EXCEPT A.) a debtor group. B.) a group needing low-cost life insurance. C.) a group sponsored by an employer. D.) An alumni group.
B
J transferred his life insurance policy to his son two years before his death. Which of the following is true? A.) Because the policy has been transferred, it will not be included in J's taxable estate B.) The entire face value of the policy will be included in J's taxable estate. C.) The interest portion of the policy will be included in J's taxable estate. D.) The unpaid premiums on the policy will be deducted from J's taxable estate.
B
The authority granted to an agent through the agent's contract is referred to as A.) Absolute authority B.) Express authority C.) Apparent authority D.) Implied authority
B
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? A.) Predicted needs of the family after the insured's death. B.) Insured's current and future income. C.) Insured's annual expenses. D.) Effect of inflation on income expenses
A
How many hours of prelicensing education are required for applicants seeking a resident agent license for a single line of insurance A.) 20 B.) 32 C.) 40 D.) 50
A
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a A.) Settlement option B.) Nontaxable exchange C.) Nonforfeiture option D.) Rollover
A
In insurance transactions, fiduciary responsibility means A.) handling insurer funds in a trust capacity B.) maintaining a good credit record C.) Being liable with respect to payment of claims. D.) Commingling premiums with agent's personal funds.
A
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.) Reduction of premium B.) Paid-up addition C.) Accumulation at interest D.) Cash option
A
Which of the following would provide an underwiter with information concerning an applicant's health history? A.) The medical information Bureau B.) A medical examination C.) The agent's report D.) The inspection report
A
All other factors being equal, the least expensive first-year premium payment is found is A.) Level Term. B.) Annually renewable Term. C.) Increasing Term D.) Decreasing Term.
B
An applicant wants to buy a life insurance policy in which he can count on receiving the same benefits as stated in the contract. Which type should he buy? A.) Any type of annuity B.) Fixed C.) Permanent D.) Variable
B
Are Insurance company underwriters allowed to discriminate? A.) Yes, but only for gender B.) Yes, but not unfairly C.) No, higher risks pay higher premiums D.) No, Discrimination is an unfair practice
B
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 A.) send an actual certified copy of the entire report to the consumer. B.) Respond to the consumer's complaint. C.) Defend the report if the agency feels it is accurate. D.) Change the report.
B
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? A.) The same as the orginal policy minue the cash value B.) Equal to the orginal policy for as long as the cash values will purchase C.) In lesser amounts for the remaining policy term of age 100 D.) Equal to the cash value surrendered from the policy
B
Which of the following are generally NOT considered when underwriting group insurance? A.) The size of the group B.) The isureds' medical history C.) The nature of the group D.) The group's past claim experience
B
An Insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this? A.) Incontestable clause B.) Grace period C.) Reinstatement provision D.) Waiver of premium provision
C
An individual purchases a $100,000 joint life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy? A.) Nothing B.) $50,000 C.) 100,000 D.) 200,000
C
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? A.) Reduction of premium B.) Accumulation at interest C.) Paid-up option D.) One-year term
C
How many hours of continuing education must be completed in ethics? A.) 12 B.) 2 C.) 3 D.) 5
C
An individual is purchasing a permanent 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 follwoing options should be included in the policy? A.) Dividend options B.) Guaranteed renewable option C.) Nonforfeiture option D.) Guaranteed insurablility option
D
An insured purchased a life policy, in 2010 and died in 2017. The insurance company discovers at that time that the insured had concealed information during the application process. What can they do? A.) Refuse to pay the death benefit because of the fraud B.) Pay a decreased death benefit C.) Sue for the right to not pay the death benefit D.) Pay the death benefit
D
An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information? A.) Interviews B.) State record C.) medical records D.) Application
D
Units with some or similar exposure to loss are referred to as A.) Catastrophic loss exposure B.) Insurable risks C.) Law of large numbers D.) Homogeneous
D
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest-only settlement option. What does this mean? A.) the beneficiary must pay interest to the insurer B.) The beneficiary will receive the lump sum, plus interest C.) The primary beneficiary will receive the death benefit and the secondary beneficiaries will share the interest payments. D.) The beneficiary will only receive payments of the interest earned on the death benefit.
D
Which of the following terms describes making false statements about the financial condition of any isurer that intended to injure any person engaged in the business of insurance? A.) Undercutting B.) Twisting C.) Slandering D.) Defamation
D
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? A.) Reduction of premium B.) Paid-up addition C.) Accumulation at interest D.) Cash Option
A
The superintendent issues a cease and desist order. A hearing is held in order to determine whether the order should be continued. After the hearing, the superintendent decides to continue the order. The agent wants to appeal this decision. Which of the following is true? A.) The order can be appealed B.) The order cannot be appealed C.) There is not enough informatio D.) The order cannot be appealed at this point, since it is the final order.
A
The term "Illustration" in a life insurance policy refers to A.) a presentation of nonguaranteed elements of a policy. B.) a depiction of policy benefits and guarantees. C.) Pictures accompanying a policy. D.) Charts and graphs
A
Which of the following is NOT true regarding Equity Indexed Annuities? A.) They earn lower interest rates than fixed annuities B.) The insurance company keeps a percentage of the returns C.) They have guaranteed minimum interest rates. D.) They are less risky than variable annuities
A
Which of the following is NOT typically excluded from life policies A.) Death due to plane crash for a fare-paying passenger B.) Self-inflicted death C.) Death that occurs while a person is committing a felony D.) Death due to war or military service
A
Which of the following is TRUE about a class designation? A.) Beneficiaries are not identified by name. B.) Beneficiaries must be part of the insured's immediate family. C.) It is not allowed D.) It determines the succession of the beneficiaries.
A
Which of the following must an insurer obtain in order to transact insurance within a given state? A.) Certificate of authority B.) Producer's certificate C.) Business entity license D.) Insurer's license
A
Which of the following produces evaluations of insurers' financial status often used by state departments of insurance? A.) AM Best B.) NAIC C.) consumer's guide D.) SEC
A
An insured has a Modified Endowment Contract. He wants to withdraw some money in order to pay medical bills. Which of the following is true A.) He cannot withdraw money from his MEC before age 59 1/2 B.) He will have to pay a penalty if he is younger than 59 1/2 C.) He will have to pay a penatly regardless of his age D.) He will not have to pay a penalty, regardless of his age
B
An insured stops making payments on a loan taken from his cash value policy. What will must likely happen? A.) The policy will be reduced to an extended term option B.) The policy will terminate when the loan amount with interest equals or exceeds the cash value C.) The insurer will increase the interest rate on the loan and charge a penalty D.) The insurer will not permit the policyowner to take out any more loans.
B
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as A.) binding contracts B.) Contracts of adhesion C.) Unilateral contracts D.) Aleatory contracts
B
In a group life insurance policy, the employer may select all of the following EXCEPT A.) the premium payor B.) The beneficiary C.) The type of insurance D.) The amount of insurance
B
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. Which settlement option should the policyowner choose? A.) Fixed amount option B.) Interest only option C.) Life income with a period certain D.) Joint and survivor
B
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? A.) The death benefit can be increased only by exchangng the existing policy for a new one B.) The death benefit can be increased by providing evidence of insurability C.) The death benefit cannot be increased D.) The death benefit can be increased only when the policy has developed a chas value
B
An insured states her age as 40 on the application. When she dies, the insurer discovers that she is actually only 37 at the time of application. What will the insurance company do? A.) Pay an increased death benefit B.) Pay nothing since there was a material misrepresentation on the application C.) Pay the death benefit in the amount that the premium at the correct age would have purchased D.) Pay a decreased death benefit
C
If an annuitant dies during the accumulation period, what benefit (if any) will be included in the annuitant's estate? A.) No benefits B.) Policy loans C.) Accumulated cash value D.) Full annuity benefit
C
In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment? A.) The annuitant will receive the lower if either the guaranteed minimum rate or current rate B.) The annuitant will only receive the guaranteed minimum specified in the contract C.) The annuitant will receive the higher of either the guaranteed minimum rate or the current rate D.) The annuitant will always receive the current interest rate
C
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? A.) The death benefit can be increased only when the policy has developed a cash value. B.) The death benefit can be increased only by exchanging the existing policy for a new one. C.) The death benefit can be increased by providing evidence of insurability. D.) The death benefit cannot be increased.
C
The waiver of cost of insurance rider is found in what type of insurance? A.) Joint and Survivor B.) Juvenile Life C.) Universal Life D.) Whole Life
C
When an agent's appointment has been terminated, the insurer must notify the superintendent within how many days? A.) 10 B.) 15 C.) 30 D.) 60
C
When the beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income? A.) neither principal nor interest B.) Principal only C.) Interest only D.) Both principal and interest
C
Because an agent is using stationary with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe? A.) Assumed B.) Apparent C.) Express D.) Implied
D
In a direct rollover, how is the money transferred from one plan to the new one? A.) from the trustee to the participant B.) From the participant to the new plan C.) From the orginal plan to the original custodian D.) From the trustee to the trustee.
D
The authority granted to an agent through the agent's contract is referred to as A.) Apparent authority B.) Implied authority C.) absolute authority D.) Express authority
D
The medical information Bureau (MIB) was created to protect A.) Insurance departments from lawsuits by policy owners. B.) Insureds from unreasonable underwriting requirements by the insurance companies. C.) Medical examiners that perform insurance physical examinations. D.) Insurance companies from adverse selection by high risk persons.
D
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? A.) Industrial life B.) Credit life C.) Ordinary life D.) Franchise life
A
If an insured changes his payment plan from monthly to annually, what happens to the total premium? A.) Doubles B.) Increases C.) Decreases D.) Stays the same
C
When an employee terminates coverage under a group insurance policy, coverage continues in force A.) Until the employee can obtain coverage under a new group plan. B.) Until the employee notifies the group insurance provider that coverage conversion policy is issued. C.) For 31 days. D.) For 60 days.
C
Which of the following is NOT a characteristic of an insurable risk? A.) The loss must be measurable B.) The loss exposure must be large. C.) The loss must be catastrophic D.) The loss must be due to chance
C
Which of the following is NOT a goal of risk retention? A.) To increase control of claim reserving and claims settlements B.) To fund losses that cannot be insured C.) To minimize the insured's level of liability in the event of loss D.) To reduce expenses and improve cash flow
C
According to the entire Contract provision, a policy must contain A.) A declarations page with a summary of insureds. B.) Buyer's guide to life insurance. C.) Listing of the insured's former insurer(s) for incontestability provisions. D.) A copy of the original application for insurance.
D
