Life Insurance FINAL Exam 2- Georgia

The USA PATRIOT Act, which is designed to help detect money laundering and the international financing of terrorism, requires that a currency transaction report being filed with FinCEN for each financial transaction over which amount?

$10,000

Mr. Jones bought a $100,000 Term Life insurance policy on July 1, 2006 by paying an annual premium of $200. He died on July 15, 2007 without paying his renewal premium. How much will the policy pay, if any?

$99,800

A 30-year old wants cash value Life insurance that will cover him until he dies, but that he can pay up before he retires at age 60. Which of the following policies would be most appropriate?

30 Pay Life

Automatic Premium Loan is not available on which of the following types of Life insurance policies:

5 year Level Term

The Guaranteed Insurability Rider (GIR) allows the insured to increase the face amount of their policy:

At specified times based upon current or attained age

A rider that keeps the policy from lapsing by borrowing from the cash value is:

Automatic Premium Loan

All of the following are Non-Forfeiture options on a cash value Life insurance policy, EXCEPT:

Automatic Premium Loan

On submittal of an application, why is it important for a producer to deliver the policy and collect the premium ASAP?

Because the insured is waiting for coverage to start

Which of the following is not an owner's right?

Changing an irrevocable beneficiary

Term conversion is based upon:

Current age

In an Equity-indexed Annuity, which of the following statement is correct?

If the index performs well, the annuitant will be credited with the extra earnings

J buys Life insurance and names S as the primary beneficiary. If both die as a result of the same accident and it cannot be determined who died first, the proceeds will go to:

J's estate

The IRS classifies a policy whose cash value builds too fast according to IRS rules as which of the following?

MEC

Which of the following is not a non-forfeiture option?

Paid Up Addition

Ron applied for Life insurance on July 1st. The insurer approved his application on July 15th and the agent delivered his new policy on August 1st. Ron returned the policy to the insurer on August 9th, but died before they received it. What will the company do?

Refund the premium to Ron's estate

The feature on most Term policies that allows the insured to continue coverage is:

Renewability

If a three-person business partnership wants to buy Life insurance to fund a cross-purchase buy-sell agreement, how many policies would you have to sell?

Six

A life policy that is guaranteed to have $480 of cash value per $1,000 of face amount in the 20th year is what type of policy:

Straight Whole Life

A life insurance policy with a Guaranteed Insurability Rider (GIR) allows a policyholder to increase coverage based on all of the following rules, EXCEPT:

The amount of increased coverage is based on the insured's health

On an application for Life insurance, which of the following statements is correct?

The applicant is required to make representations

Marie sent in a change of beneficiary to her Life insurance company, but died before they received it. Which of the following is true?

The change is effective when a company officer accepts it

On Life insurance, what is the purpose of the Entire Contract Clause?

To limit the policy to the contract itself, plus any riders or endorsements attached with mutual consent of the parties

Life insurance coverage becomes effective when:

When the conditions in the conditional receipt are satisfied

Adjustable Life insurance is a combination of Term and:

Whole Life

Consideration for the insured consists of the answers to the questions on the application and which of the following?

The first premium

Which law governs the gathering of an applicant's investigative consumer report?

Fair Credit Reporting Act

Of the following statements about the Insuring Clause, which is correct?

The insurer's legally enforceable promise is found in the insuring clause

An insured buys a $150,000 Life insurance policy naming his sons T & S as primary beneficiaries and a spouse as contingent beneficiary. When both the insured and his son T die in a train wreck, who gets the money?

All goes to S

Policies written on a third-party ownership basis are usually written to cover:

Family members or business needs

All are true about Life insurance tax implications, EXCEPT:

Generally, Life insurance premiums are tax deductible

Survivorship Life is often purchased to:

Help with estate planning

Which of the following is prohibited in setting rates for a Life insurance policy?

Marital status

Which Life insurance policy provision allows the insurer to make adjustments in the face amount?

Misstatement of Age Clause

The name of the rider that waives premiums on a child's policy should the payor die or become disabled is called:

Payor Benefit

The rider that will pay the premium on a child's policy if a parent becomes disabled is:

Payor Benefit rider

When does the client's free look start?

Policy delivery

Which of the following statements concerning collecting credit information is correct?

Pre-notification is required when checking someone's credit report

All of the following are true about an LP 65, EXCEPT:

Premiums are payable until age 100

Social Security Disability Income benefits are based upon:

Primary Insurance Amount

On submittal application, when delivering a policy:

Producer should get 1st premium and statement of continued good health

An employer buys and pays the entire premium on a $50,000 Group Life policy for all of his employees. All are true, EXCEPT:

The employer is the beneficiary

A policy that allows for changes in premiums, cash values and death benefits based on changes in mortality, expenses and interest rates is:

Universal Life

A client wants cash value Life insurance with a flexible premium and an adjustable death benefit that will allow him to self direct where the cash value in the separate account is invested. He should buy:

Variable/Universal Life

Which of the following policies does not have a guaranteed interest rate or cash value?

Variable/Universal Life

An agent completes a Life insurance application and sends it to the underwriter who approves it. When is coverage effective?

When the agent delivers the policy and picks up the premium

If an insured designates an irrevocable beneficiary on their Life insurance policy, they could do which of the following without the consent of that beneficiary:

Change a dividend option

Since insurance contracts are written by the insurance company, if there should ever be a lawsuit over ambiguity in the contract, it will always be found for the side of the insured. Which of the following describes this concept?

Contracts of Adhesion

The client receives both dividends and interest on dividends. What is the tax implication?

Dividends not taxed, interest is

The clause that prevents the insurer from changing a policy after issue is which?

Entire Contract

A person selling Variable Life insurance must be registered with the:

FINRA