Life Insurance
how much interest would a beneficiary of a life contract earn annually on a death claim if the proceeds of the policy were 1,000?
$90, (9% of 1,000)
a rhode island insurance company filed an insurance policy form with the commisioner 20 days ago. if the commissioner takes no action on the form, the company will be able to use the form in how many days?
10
An individual purchased 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?
100,000
what is the maximum amount in health insurance benefits the Life and Health Guaranty Association will cover for an indivdual
100,000
how many excess continuting education credit hours may licensees carry over from one licensing period to the next
12 hours
The validity of coverage under a life insurance policy may not be contested, except for which nonpayment of the premium, after the policy as been in force for at least how many years?
2 years
how long must an insurer maintain a rcord of policy claims after an insurance policy is no longer in affect?
4 years
life policies issued in this state must include a provision that allows a fixed interest rate for policy loans not exceeding
4% per yeard
if a consumer requests additional information concerning an investigative consumer report, how ling does the insurer or reporting agency have to comply?
5 days
when an annuity is purchased or exchanged based on a producer's recommendation, how long must the producer keep the records of each transaction
5 yrs
the commissioner is authorized to levy all of the penalites, except
6 month in prision (can't grant prision time)
when a death claim on a life insurance policy is present, how much interest on the proceeds must the insurer pay the beneficiary from the date of death?
6% per annum
Who is a third party owner
A policyowner who is not the insured
What is material misrepresentation
A statement by the applicant that, upon deliver, would affect the underwriting decision of the I.C
what is true about class designation
Beneficiaries are not identified by name
Liquidity in life insurance means..
Cash values can be borrowed at anytime
Because an insurance policy is a legal contract, it must confirm to the state laws governing contracts which requires..
Consideration, Legal Purposes, and Offer and appectanance. NOT CONDITIONS
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?
Cost of Living Rider
Which policy component decreases in decreasing term insurance
Face Amount
out of whole life, variable life, group life, and annuties, which policys must contain a clear;y stated nonforfeiture provisions except
Group life
is replacing insurance policies for the purpose of making commissions legal?
ILLEGAL NO!
STOLI (stranger-originated life insurance) policies are in direct opposition to the principle of?
Insurable interest
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
Insuring clause
Which of the following risks will result in the highest premium
Substandard risk
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT
The insured's age at death
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
which of the following statements is not true concerning insurable interest as it applies to life insurance
a debtor has an insurable interest in the life of a lender. WRONG OTHER WAY AROUND
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower echelon employees. this plan would be funded with before tax corporate dollars, and it does not meet government approval standards. This annuity plan is subject to:
a nonqualified annuity plan
whenever the insurer establishes a relationship with a consumer, the insurer must provide
a privacy notice
when must an insurer deliver a privacy notice to consumers?
every 12 months
which of the following settlement options in life insurance is known as straight life
life income
all of the following statements about equity index annuities are correct except (1. the annuitant receives a fixed amount of the return, 2. they have a gaurenteed minimum interest rate, 3. the interest rate is tied to an index such as the standard & poor's 500, 4. they invest on a more aggressive basis aiming for higher premiums)
the annuitant receives a fixed amount of the return
if the annuitant dies during the accumulation period, who will receive the annuity benefits
the beneficiary
the primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husbands death. who will select the settlement option in this case?
the beneficiary
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then
the benefit is received tax free
If an insured under a variable life insurance policy dies, how will the insurer respond to outstanding policy loans?
the loan amounts are deducted from the DB
what is true about a spouse term rider
the rider is usually level term insurance
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
the surviving beneficiary will continue to receiving 2/3 of the benefit paid when both beneficiaries were alive
which of the following is another term for the accumulation period of an aunnitiy
pay-in period
what provides specific information about the products that are being considered and shows policy guarantees
policy summary
what is true about the premium on the children's rider in a life policy
premium stays the same no matter how many children are added to the policy
what form of the annuity settlement options provide payments to an annuitant for the rest of the aunnuitants life and ceases at the death
pure life
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
rebating
a married couple owns a permanent policy which covers both of their lives and pays the DB only upon the first death
Joint life policy
what is an example of a producers fiduciary responsibilites?
a producer must promptly forward premiums to the insurance company
in which of the following cases would a producer be responsible for the suitabillity of the annuity for the consumer?
a recommrndation for the exchange of an annuity rather than a new purchase
for variable products, underlying assests musut be kept in?
a seperate account
the policy summary is required to include the name and address, generic name of each policy ride, the guaramteed amount payable at death, AND NOT..
a signed copy of application
all of the following examples of violations of replacement except
advising an applicant to answer questinons correctly
When transacting business in this state an insurer formed under the laws of another country is known as a/an
alien insurer
the current interest rate on an equity indexed annuity is often based on
an index like standard & poor's 500
if an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, the report may contain everything but (1. prior insurance, 2. credit history, 3. habits, 4. ancestry)
ancestry
which premium payment mode will incur the lowest overall payment
annual (no fees)
the least expensive first-year premium is found in which of the following polices
annually renewable term
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
as of the application date
all admitted insurance companies in this state are subject to fiscal examinations by the commissioner
at least every 5 years
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
authorized
when a producer is soliciting life insurance, what must they provide to the prospective insured?
buyers guide
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
cash option
Nonforfeiture Options
cash surrender, reduced paid-up insurance, extended term insurance. NOT INTEREST ONLY
a tax-sheltered annuity is a special tax-favored retirement plan available to
certain groups of employees only
To legally transact insurance in this state, an insurer must obtain which of the following?
certificate of authority
all of the following are duties and responsibilities of producers at the time of application EXCEPT
change any incorrect statement on the application personally. Must be applicant, they must initial next to changes
a banker is ready to close a customers loan. the bank is prepared to offer the loan but only if the customer purchases an insurance policy from the bank in the amount of the loan. this is an example of
coercion
which of the following reports will provide the underwriter with the information about an insurance applicant's credit
consumer report
an individual has just borrowed 10,000 from his bank on a 5 year installment loan requiring monthly payments. what type of life insurance policy would be best suited to this situtation
decreasing term
which of the following best describes the aleatory nature of an insurance contract
exchange of unequal values
A license may be denied, suspended, or revoked if the licensee for deals with insurance outside the scope of license, enganges in fraoud but NOT
fails to meet company goal in sales
which rider, when attatched to a permanent life policy provides an amount of insurance on every family member?
family term rider
fixed annuities do not provide
hedge against inflation
when would a misrepresentation on the insurance application be considered fraud
if it's intentional and material
in which of the following cases will the insured be able to receive the full face amount from a whole life policy
if the insured lives to 100
What do individuals use to transfer their risk of loss to a larger group?
insurance
forgein insurer
insurer with a home office in a different state
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?
interest only option
an insured purchases 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
interest-sensitive whole life
The sole beneficiary of a life insurance policy dies before the insured. If the policyowner does not amend the beneficiary designation, what will happen to the policy's death benefit?
it goes to the INSURED'S estate
what best describes the MIB
it is an nonprofit organization that maintains underwriting information an applicants for life and health insurance
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?
it is only taxable if the cash value exceeds the amount paid for premiums
The premium of a surviorship life policy compared with that of a joint life policy would be higher or lower?
lower, premium is based of average of both ages
which of the following is not true regarding policy loans
money borrowed from the cash val is taxes. MONEY BORROWED IS NOT TAXABLEwh
if an insured wishes to designate a third-party to receive cancellation notices, the insured must provide the insurer with?
name and address
DB's payable to a beneficiary under a life insurance policy are generally
not subject to income taxation by the Fed Gov
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
paid-up option
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?
paid-up option
rhode island offers producers licencesed in another state the same privileges that the other state offers RI, this is called?
reciprocal licensing
Which nonforfeiture option provides coverage for the longest period of time?
reduced paid-up
which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance
replacemnet rule
Which type of retirement account does not require the owner to start taking distributions at age 72?
roth ira
The Ownership provision entitles the policyowner to do all of the following EXCEPT
set premium rates
your client is planning to retire. she has accmulated 100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. as her agent what would you reccomend
straight life
which of the following would help prevent a universal life policy from lapsing
target premium
the premiums paid by the employer in a business life insurance policy are
tax deductible by the employer
which of the following may not be included in an insurance company's advertisment
that it's policies are covered by a state guaranty association
when a company requires an applicant to be tested for HIV infection as a part of the underwriting process, it must provide a written notice of those requirements to the applicant and?
they must receive the applicants written authorization to proceed with testing
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?
twisting
an insured owns a life insurance policy. to be able to pay some of her medical bills, she withdraws a portion of the policys cash value. there is a limit for a withdrawl and the insurer charges a fee. what type of policy does the insured likey have
universal life
what kind of policy allows withdrawals or partial surrenders
universal life
if an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwrititer would be concered about?
weather an insurable interest exsits between the individuals
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than
with the policy