Life insurance test 2
which of the following is true about life insurance beneficiary designations?
if there is no surviving beneficiary, the death benefit is paid to the insureds estate
in the event of an accidental death, the principal sum in a disability policy will be paid:
in one lump sum
if an insurer is not able to meet financial obligations when due, the insurer would be considered:
insolvent
which of the following describes an insurer who has enough financial resources only to provide for all its liabilities and for all reinsurances of all outstanding risks?
insolvent
usually, in order to join a group insurance plan without proving insurability, an employee must:
join the plan during the enrollment period
in order to deal with the financial consequences of the death of a senior sales manager, a corporation could purchase:
key person insurance
term life insurance is typically characterized by:
low premiums and no cash value
what would a person be guilty of who refuses to submit books and records to the commissioner?
misdemeanor
An insured bought 150,000 non participating whole life policy and has made all premium payments when due. The policy cash value:
$150,000
an insured bought a $150,000 non-participating whole life policy many years ago. he is 100 years old today. he has never borrowed from the policy's cash value and has faithfully made all payments when due. the policys cash value is:
$150,000
how much continuing education is a new agent who is both life and fire and casualty license is required to complete?
25 hours per year for either license
how long must a life-only agent maintain records regarding policies sold in this state?
5 years
when are parties to a contract required to communicate info solely based on personal judgment for a matter in question?
never
when may a representation be withdrawn?
only before the insurance is in effect
people commonly purchase an annuity to protect against the risk of:
outliving their financial resources
the employee retirement income security act of 1974 (ERISA) mandates requiring plan sponsor to provide participants with:
plan descriptions and benefit statements
according to the CA insurance code, all of insurers must maintain a department to investigate:
possible fraudulent claims from insureds
in the state of California:
providing free insurance coverage in connection with the sale of service as an inducement for completing the transaction is not legal
the guaranteed insurability option provides the ability to :
purchase additional insurance regardless of insurability
an intentional concealment entitles the injury party to which course of action?
recession of the contract
Which type of insurance guarantees the right to renew the policy each year, regardless oh health, but an increased premium?
renewable term
unintentional concealment entitles the injured party to which course of action?
rescission of the contract
what recourses does an insurer have if a violation of a material warranty on the part of the insured is discovered?
rescission of the policy
the adjustment that an insurer makes in a cash value account in a universal life policy each time a payment is made includes all of the following, except:
subtract the policy surrender charges
what does the insurance commissioner have the right to do if an agent lacks authority from an insurer named on a binder for coverage?
suspend or revoke the license of the agent
an individual with a low income and high insurance need should buy:
term insurance
when a licensed agent submits a renewal application with applicable fee on or before the expiration date:
the agent will be able to operate for up to 60 days after the specified expiration date
a $50,000 whole life policy with a cash value of $10,000 has been in force for 11years. The policy owner is unable to continue the premium payments. which of the following describes the reduced paid-up non forfeiture option?
the cash value is used to purchase a $20,000 paid up policy
all of the following statements about contingent beneficiaries are true , except :
the contingent beneficiary shares death proceeds equally with the primary beneficiary
the common disaster provision is designed to protect the interest of which of the following?
the contingent or secondary beneficiary
a significant benefit to the insured in group underwriting verses individual is:
the cost of coverage is lower
according to the insurance code, an insureds policy must specify all of the following except:
the financial rating of the insurer
why is having a large # of similar exposure units important to insurers?
the greater the # insured, the more accurately the insurer can predict losses and set appropriate premium
in group life insurance the certificates of insurance are issued to:
the group members
after a life insurance policy has been in effect for two years, what keeps it from being rescinded by the insurer?
the incontestability clauses
which of the following is a correct statement about life insurance policy types?
the initial premium for term insurance is lower than the initial premium for whole life insurance
which of the following statements about policy dividends is true?
the insured usually selects the dividend option at the time of policy purchase
the payor rider on a juvenile life policy provides that if the payor dies or becomes disabled before the insured juvenile reaches the age specified on the policy:
the insurer will make the payments until the insured juvenile reaches the specified age
all of the following statements about survivorship life insurance are true, except:
the policy face amount is paid out only upon the death of the insured to die
while an insurer is paying the premium for a life insurance policy under the waiver of premium rider:
the policy remains in full force in every respect
what makes up the entire contract in a life insurance policy?
the policy, and when attached, the application
loss retention is an effective risk management technique when all of the following conditions exist, except:
the probability of loss is unknown
which of the following is a true statement regarding the social security program?
the program provides only a minimum floor of income. individuals are expected to supplement this with their own personal programs
the department responsible for evaluation selection, and distribution of risks is
the underwriting department
what is the purpose of "key person" insurance?
to cover decreased business earnings due to the death of a key employee
the insured is totally and permanently disabled. The insureds policy continues in force without the payment of a premium because the policy contains a:
waiver of premium provision
all of the following statements about the election of a life insurance policy's settlement options are true, except
when no settlement options is chosen, the proceeds are automatically paid to the policy owner's estate
the probationary period in a group policy is intended for people:
who joined the group after the policy effective date
Identify the penalty for each violation for person engaging in any unfair method of competition
No more than 5,000 for each act, of no more than $10,000 for each act is the act is judged to be willful
Which type of life insurance policy gives the policy owner the the right to share in the insurers surplus ?
Participating
In life insurance the loss of a key family member is
Personal loss
Unless it is merely a statement of an expectation or belief a representation as to the future is considered which of the following ?
Promise
RW and associates is an agency which represents BLG insurance corporation . RW and associates may leave the BLG insurance corporation in its advertisements by clearly stating the relationship between the two businesses in any of the following ways, except:
RW and associates underwriting for BLG insurance corporation
Which of the following is a correct statement about life insurance policy types?
The initial premium for term insurance is lower than the initial premium for whole life insurance
The policy owner age 50 has been paying the premium on his whole life policy for 15 years. He needs the equivalent of 1/3 of cash value of his policy owner the next two years. He wants to continue to have the policy protection, an can afford to pay the premiums. Which of the following would appear to be his best course of action ?
Use the policy loan provision to borrow money from the policy but keep paying the policy premium to keep the policy in force
what would we call a representation which fails to correspond with its stipulations or assertions?
false
Which of the following is true regarding participation in a group ?plan ?
A non contributory
In insurance terms a representation can be considered
An implied warranty
All of the following are true statmemts concerning the treatment of federal income tax on life insurance, except
Annuity death benefit proceeds exemt from all taxation
The purchase of a life insurance policy may not provide one of the following for the insured. Select the most complete answer
Elimination of the risk
Under the 10 day right to return the policy will pay proceeds
If the policy is not returned but premium is paid
which of the following is a hazard?
a condition that might increase the likelihood of a loss occurring
renewable term insurance can best be described as:
a level death benefit with a raising premium
renewable term insurance can be best described as:
a level death benefit with an increase in premium
joe receives a large bonus at work and decides to purchase an annuity with it. His monthly income payments from the annuity will begin the following month: which of the following has joe purchased?
a single premium immediate annuity
which provisions will pay a portion of the death benefit prior to the insured death due to a serious illness?
accelerated death benefit
the insured, aged 65, owns a $100,000 non-participating whole life policy. The policy is paid-up as of today. when would the cash value reach $100,000?
age 100
how do rights of an irrevocable beneficiary differ from those of a revocable beneficiary?
an irrevocable beneficiary has a vested right that neithier the policy owner nor his creditors can impair without the beneficiary's consent
the policy provision which comes into effect when the insured an primary beneficiary die in a simulataneous accident with no evidence as to who died first is:
common disaster provision
insurers make an adjustment to the cash value of an account of a universal life policy each time a payment is made. They add the premium paid and:
current interest; adjusted for morality and a general expense charge
what would be the insurance commissioner's most likely course of action if an applicant for an insurance license had a previous application for a professional license denied for cause by any licensing authority within five years of the date of the filing?
deny the application without a hearing
common life insurance policy riders include all of the following, except:
extended term
which of the following requires a reporting company to respond to a consumer's complaint that his file contains inaccurate info about them?
fair credit reporting act
which of the following requires a reporting company to respond to a consumers complaint that his file contains inaccurate information ?
fair credit reporting act