Life insurance exam

The commission will send an agent whose license is about to expire notice such expiration at least

30 days before the date

What do Modified Life and Straight Life policies have in common?

Accumulation of cash value

When can agent renewed their license?

Every 2 year on the licensee birthday, either on even number or add number

The commission must examine all authorized insurers at least once

Every 5 years

When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n)

Executive bonus

Interest rates on policy loans are classified as

Fixed variable

All of the following are true of key person insurance except

The plan is funded by permanent insurance only.

Which of the following best describes gross annual premium?

annual cost of mortality plus expenses

temporary

the commission may issue a temporary life insurance agent license, effective for 90 days, without requiring a written to applicant who completed a 40 hours training course before apply for the license or within 14 days after

Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?

the employer is the owner and beneficiary

Premium Mode

the manner or frequency that the policyowner pays the policy premium

Employer contributions made to a qualified plan

Are subject to vesting requirements

SIMPLE Plans require all of the following EXCEPT

At least 1,000 employees.

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash surrender

alien

Outside the United States

Which is true about a spouse term rider?

The rider is usually level term insurance

Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?

buy-sell agreement

Consideration

something of value exchanged for something else of value

When a closely held corporation enters into an agreement with its stockholders to insure each of them individually for the purpose of buying their stock, should any of them die, it is called

stock redemption plan

The interest earned on policy dividends is

taxable

Children's riders attached to whole life policies are usually issued as what type of insurance?

term

An insured requests a loan from her life insurance policy to pay a premium that is due. The insurer may delay that request for how many months?

0

Which is the following types of insurance policies is most commonly used in credit life insurance?

Decreasing term

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

Guaranteed insurability rider

What type of insurance would be used for a Return of Premium rider?

Increasing Term

The mode of premium payment

Is defined as the frequency and the amount of the premium payment.

Grace Period

Is the period time after the premium due date that the policyowners had to pay the premium before the policy lapses( usually 30 or 31 days)

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider

Which type of insurance policy pays dividends if there are excess premiums over the cost of providing the insurance?

Participating

Which nonforfeiture option provides coverage for the longest period of time?

Reduced Paid-Up

An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?

Reduction of premium

If the insured she's during a period of time for which the premium had been paid, the insurer must—-— along with the policy proceed

Refund any unearned premium

In order to assure that an insurer can cover liabilities, insurance regulators require it to set aside funds called

Reserve

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

Which of the following is an example of liquidity in a life insurance contract?

The cash value available to the policyowner

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?

The death benefit will be smaller

What is the purpose of a fixed-period settlement option?

To provide a guaranteed income for a certain amount of time

How long will the beneficiary receive payments under the single life settlement option?

Until the beneficiary's death

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of Premium

Mortality - Interest + Expense =

gross premium

foreign

is an insurance company that is incorporated in another state of territorial possession

domestic

is an insurance company that is incorporated in this state

Under what type of insurance plan is the cash value of a permanent policy used to pay the policy premiums through policy loans?

minimum deposit

Which of the following premium modes would result in the highest annual cost for an insurance policy?

monthly

Is a temporary license renewable?

not renewable and cannot be issued more than once in any 6 month period to the same applicant

In a life settlement contract, whom does the life settlement broker represent?

owner

Which of the following riders can be included in a life insurance policy without additional premium due?

Automatic premium loan

A maximum family benefit is updated annually and is established for each level of

Average earning

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount

A nonpayment of premiums may result in a

Lapsed policy

What is the primary purpose of qualified plans?

Retirement benefits

Which of the following would be considered a nonqualified retirement plan?

Split-dollar plan

Which of the following characteristics applies to defined benefit plans but not defined contribution plans?

The amount of contributions made by the employer is determined by an actuarial formula.

Free Look Period

The free look period starts when the policy owner receives the policy, not when the insurer issues the policy

Which of the following best defines the "owner" "as it pertains to life settlement contracts?

The policyowner of the life insurance policy