Life Insurance Exam
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 ?
$50,000
The notice to senior consumers regarding their right to cancel a policy must be printed on the cover or policy jacket in at least what type of print?
12-point BOLD print
An insurer, by filing a notice of appointment on behalf of the applicant, shall be deemed to have declared that the applicant has had experience or instruction in insurance or that the necessary instruction will be given within
30 days after issuance of license
An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of
A STOLI policy
All of the following would be considered insolvent insurers EXCEPT
A company that reinsurers outstanding risks
The legal definition of "person" would not include which of the following?
A family
Which concept is associated with "exclusion ratio"?
Annuities Payments
Who is eligible to purchase an IRA?
Anyone under the age of 70 1/2 who has earned income.
All of the following are true of the federal tax advantages of a qualified plan except:
At distribution, all amounts received by the employee are tax free
Any insurance agent who engages in the insurance business and violates the Code with respect to insurance replacement shall on the first violation...
Be fined a sum of $1,000 (for the first offense)
The set of regulations issued by the California Life Insurance Commissioner that identifies the standards for the insurance code and how it is to be administered is
California ADMINISTRATIVE code of REGULATIONS
What does "liquidity" refer to in a life insurance policy
Cash values can be borrowed at any time
What an insured makes truthful statements on the application for insurance and pays the required premium, it is known as
Consideration
Which of the following types of insurance policies is most commonly used in credit life insurance?
Decreasing term
What is the term for a sales campaign conducted through the mail?
Direct-response
Selection of coverage in employee benefits plans refers to
Employee choosing benefits
Which of the following best defines earned surplus?
Insurer's unassigned funds
Which of the following is true regarding a single life settlement option?
It provides income the beneficiary cannot outlive
An insurer received a claim on May 1st. On May 31st, the claim was approved in its entirety. By what date can the claimant expect the payment?
June 30th (30 days after)
Which of the following statements is incorrect concerning an IRA
Married individuals must contribute into one account for both spouses, up to a specified amount for each person.
Which of the following premium modes would result in the HIGHEST annual cost for an insurance policy?
Monthly
What describes a situation when poor risks are balanced with preferred risks, and average risks are in the middle?
Profitable distribution of exposures
In case of a loss, the indemnity provision in insurance policies
Restores an insured person to the same financial state as before the loss
The interest earned on policy dividends is
Taxable
All of the following are reasons an insurer or an insured would have the right to rescind a policy EXCEPT
The amount of paid claims exceeds the premiums paid
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
The employer is the owner and beneficiary
All of the following statements are true regarding installments for a fixed amount except
The payments will stop when the annuitant dies.
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits.
All of the following are true about variable products EXCEPT
The premiums are invested in the insurer's general account
What is the purpose of the California laws regulating production agencies?
To provide protection for the clients by requiring producers to maintain professional standards of conduct
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
If a policy includes a free-look period of at least 10 days, the buyers guide may be delivered to the applicant
With the policy