LIFE ExamFX (guarantee)
How long is the grace period for an individual life insurance policy?
1 month (30-31 days)
All of the following are true of annually renewable term insurance EXCEPT
proof of insurability must be provided at each renewal
what type of insurer uses a formal sharing agreement?
reciprocal insurers
a whole life policy that will generate immediate cash value is
single premium policy
?
?all og
ALREADY HAVE
ALREADY HAVE
which of the following is considered a field underwriter?
An agent
in credit life insurance, who is responsible for paying the policy premiums?
Borrower only
which of the following losses would likely be covered under the Accidental Death Rider?
Death caused by a head-on collision
in which of the following qualified plans are the benefits linked to the employee's number of years of service and/or the amount of compensation earned?
Defined benefit plan
HAVE
IT
all of the following are true of credit life EXCEPT
The insured names the beneficiary
what is the purpose of the Agent's Report in the application process?
To provide additional information about the applicant to the underwriters
which department or division of an insurance company is responsible for the election, evaluation, and distribution of risks?
Underwriting
the entire contract includes all of the following EXCEPT
A buyers guide
If any individual willfully violates the provisions of the fair credit reporting act, what is the maximum civil penalty?
$2,500
all of the factors being equal, which of the following premium modes would result in the lowest overall premium?
Annual
already have
already have
the risk selection and classification process is known as
underwriting
which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity?
Accumulation period
an example of an alien insurer doing business in the state is one formed under the laws of
Puerto Rico
when a life insurance policy is delivered and there is no premium submitted with the application, the insured must sign
a statement of good health
which of the following statements is true regarding SIMPLE plans?
contributions and earnings are tax-deferred until funds are withdrawn
cash value guarantees in a whole life policy are called
nonforfeiture values
which of the following types of insurance products would. be appropriate for an individual with a low income and high insurance needs?
term insurance
what does the spend thrift clause in a life insurance policy protect?
the beneficiary
what is the cost of coverage based on for group life insurance?
The average age and the ratio of meant to women
According to the fair credit reporting act, all of the following statements are true EXCEPT
if an applicant is declined for an insurance policy, he or she has no right to know what was in the report
in making an annuity recommendation to a consumer the producer must have reasonable grounds to believe that the annuity
is suitable
all of the following are true of annually renewable term insurance EXCEPT
proof of insurability must be provided at each renewal
Frank had $25,000 whole life insurance policy that he purchased 25 years ago. he named his wife as the primary. at the time of franks death there was an outstanding loan of $5,000 from the cash value. how much will his wife receive?
$20,000 minus any interest due on the loan
All of the following are true about key-person insurance EXCEPT
The death benefit is taxable to the business
which dividend option will increase the death benefit?
Paid-up additions
which provisions may be added to a permanent life policy, at no cost, that insurers that the policy will not lapse so long as there is cash value?
automatic premium loan option
in credit life insurance, who is responsible for paying the policy premiums?
borrower only
which of the following would be TRUE of both the fixed period and the fixed-amount settlement options?
both guarantee that the principal and interest will be fully paid out
which of the following would be an example of an insurer participating in the unfair trade practice of discrimination?
charging the insured higher premiums based on her race
a whole life policy is surrendered for a reduced-paid up policy. the cash value in the new policy will
continue to increase
the owner of a whole life policy with an accidental death rider intentionally kills himself after having the policy for 18 months. what Is the insurance company's course of action?
deny payment of death benefit
which of the following is an example of a physical hazard?
enjoying skydiving as a hobby
all of the following information needs to be included on an application for life insurance EXCEPT
health insurance policies in force
if a soliciting producer suspects that there could be misrepresentation on the part of the application for insurance, what must the producer do?
inform the insurance company
insurance contracts are unilateral in nature. what does that mean?
only one party makes a promise
as it relates to life settlements, the term "owner" means
owner of the original life policy
in a defined benefit plan
the contribution is known and the benefit is unknown
all of the following are advantages of a qualified retirement plan EXCEPT
the income at retirement is tax free
changes policy due to race when everything else is held constant
unfair discrimination
a graded premium lie insurance policy is a modified form of
whole life
a college student will graduate next year. his studies have limited his ability to work, so he has borrowed funds to pay for his education. he would like to start a permanent life insurance program that would cover his debt and be affordable during the period he is establishing his earning potential. an appropriate policy would be
Modified Whole life
Kristin takes a loan out of the cash value of her life policy and then dies. the insurance company will typically pay
The face amount minus interest and loan amount
which of the following policies van be described as a flexible premium adjustable life policy?
Universal Life
which of the following are characteristics of term life insurance?
temporary protection, renewability, no cash value
J is receiving fixed amount benefit payments from his late wife insurance policy. he was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. which settlement option did J choose?
Fixed amount
according to the common disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first which of the following will be assumed?
the primary beneficiary died before the insured
Joe, age 63, was disabled and can no longer work. he meets the social security definition of total disability. how many credits must Joe have to have the status of fully insured?
40
an agent sold an insurance policy in 2005. when can he discard the records pertaining to that transaction?
in 2010
?
?
all of the following are ways to handle risk EXCEPT
Elimination
an agent is hand delivering an insurance policy to a policy owner. what must the agent obtain to complete the transaction?
a signed delivery recipt
how many days is the free-look period in most life insurance policies?
10 days
Partners in a business want to make sure that if one of them were to pass away, their surviving family will receive a fair value for their portion in the business. what life insurance arrangement would be most suited for transitioning the business?
Buy-Sell Agreement
To purchase insurance, the policy owner must face possibility of losing money or something of value in the event of loss. what is this concept called?
Insurable interest
When an agent delivered an insurance policy to the insured, he collected the initial premium, as a document verifying that the insured had not had any injuries or illness since the application date. what is this document called?
Statement of Good Health
family policy
a life insurance policy that provides coverage to every family member in a single policy, with permanent insurance on the breadwinner and convertible term on other family members is called
when a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?
extended term
which of the following is true about the social security program?
it is mandatory for most workers to pay FICA
which of the following is true about social security programs?
it is mandatory for most workers to pay FICA taxes
which of the following best describes pure life annuity?
it provides the highest monthly benefits
FICA tax
is the money that is taken out of workers' paychecks to pay older Americans their Social Security retirement and Medicare (Hospital Insurance) benefits.
life insurance can provide which of the following?
survivor protection
a life insurance policy can be backdated to affect a lower premium for up to a maximum of how many months?
6
in life insurance, which of the following if NOT required to have an insurable interest in the insured?
the beneficiary
which of the following is the primary source of information that an insurer uses to evaluate an insured's risk for life insurance?
insurance application
an insured and his spout recently had a child. which of the following riders would allow the couple to unsure the child for a limited period of time at a specific amount?
children's term rider
what type of an interest rate is guaranteed in universal life policies?
contract interest rate
which of the following is NOT a standard exclusion in life insurance policies?
disability
If an insurance company issues a policy even though some questions on the application were unanswered, when can the insurer get the answers to those questions?
Never; the insurer has waive the right to those answers by issuing the policy
which of the following statements is TRUE regarding an agents report during the policy application process?
it provides the agents personal observations concerning the proposed insured
if a retirement plan or annuity is qualified, this means
it satisfies IRS requirements for favorable tax treatment
when comparing a joint life policy to two individual life policies of the same amount on the same insureds, which condition is true?
joint life has a lower premium than the two individual policies
key person insurance can provide protection for all of the following economic losses to a business EXCEPT
pay the death benefit to the estate of the insured
If the policy loan and the interest become greater than the total cash value of a life insurance policy, the policy will apps. The policyowner must be given how many days written notice of cancellation when this occurs?
30
gross premium for a life insurance policy is determined by adding which two components?
Net premium and expenses
an IRA contribution can be made from which of the following?
cash
an insurer incorporated under the laws of another state but doing business in this state is considered
foreign
what is the purpose of the surrender charge in a deferred annuity?
to prevent the over funding of the annuity
if an insured under a permanent life policy lives to the maturity of the contract and receives the cash value in a lump sum what can be done?
the insured can purchase an annuity with a lifetime settlement option
which of the following would NOT be eligible for coverage under key person?
the owner of a shop
when an agent changes address of their residence or office, the insurance department must be notified within
30 days
an insurance agent who represents multiple companies on a nonexclusive basis and earns commissions on personal sales is working in what kind of marketing system?
Independent agency system
which of the following is NOT one of the independent rating receives that publishes guides to insurance companies financial integrity?
NAIC
when the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?
paid-up additions
