life insurance exam
A key person insurance policy can pay for which of the following? a)Costs of training a replacement b)Loss of personal income c)Workers compensation d)Hospital bills of the key employee
a
What is the maximum a producer may be fined for violating a cease and desist order? a)$500 b)$1,000 c)$5,000 d)$10,000
a
ow often will the Commissioner examine domestic insurers in this state? a)Every 5 years b)Biennially c)Annually d)Every 3 years
a
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? a)Cost of Living Rider b)Value Adjustment Rider c)Return of Premium Rider d)Inflation Rider
a The Cost of Living rider annually adjusts the policy's face value in accordance with the national rate of inflation or deflation. This rider adjusts the face amount of the policy to correspond with the rate of inflation, in order to keep the initial value of the policy constant over time.
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 by providing evidence of insurability. b)The death benefit cannot be increased. c)The death benefit can be increased only when the policy has developed a cash value. d)The death benefit can be increased only by exchanging the existing policy for a new one.
a The policyowner (insured) would need to prove insurability for the amount of the increase.
All insurers that terminate employment with a producer are required to notify the Commissioner within how many days following the effective date of the termination? a)30 days b)45 days c)10 days d)20 days
b
Social Security was created to provide all of the following benefits EXCEPT a)Retirement income. b)Unemployment income. c)Survivor's benefits. d)Disability income.
b
Which of the following terms will be permissible in describing a life insurance policy in company advertisements? a)Retirement plan b)Variable plan c)Risk-free plan d)Investment plan
b
What is the purpose of settlement options? a)They provide the beneficiary with the income he/she cannot outlive. b)They determine how death proceeds will be paid. c)They are guarantees built into the policy. d)They guarantee a return of excess premiums.
b Settlement options are methods used to pay the death benefits to a beneficiary upon the insured's death, or to pay the endowment benefit if the insured lives to the endowment date.
If an insured under a variable life insurance policy dies, how will the insurer respond to outstanding policy loans? a)The loan amount is charged to the beneficiaries. b)The loans are waived. c)The loan amounts are deducted from the death benefit. d)The policy is withheld until payments are met.
c
Which of the following information about the applicant is NOT included in the General Information section of the application for insurance? a)Occupation b)Marital status c)Medical background d)Gender
c
If the Commissioner believes that an unauthorized person is engaging in the business of insurance in violation of the provisions of the Insurance Code, creating an immediate danger to the public safety, the Commissioner may a)Publish a warning in an official newspaper circulated in Colorado. b)Notify the National Association of Insurance Commissioners. c)Order an immediate hearing to be conducted. d)Issue an emergency cease and desist order.
d
To which of the following situations does the Replacement Regulation apply? a)Group life insurance b)Immediate annuities purchased with proceeds from an existing policy c)Coverage under a binding receipt issued by the same company d)Nonrenewable coverage expiring in 8 years
d
When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income? a)Both principal and interest b)Neither principal nor interest c)Principal only d)Interest only
d