Offially 2

#46. The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT a) Purchase of a new home. b) Approximately every 3 years between the ages of 25 and 40. c) Birth of a child. d) Marriage.

A

#15. Dividends received on participating life insurance policies are a) Not taxable because they are a return on your investment. b) Taxable because they are a return of unused premiums. c) Not taxable because they are a return of unused premiums. d) Taxable because they are a return on your investment.

C

#2. Which of the following is consideration on the part of an insurer? a) Decreasing premium amounts b) Paying the premium c) Underwriting d) Paying a claim

D

#34. All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT a) Insurers are not required to give customers a copy of the report. b) It applies to credit reports ordered in connection with insurance, banking and employment. c) The customer must be notified if adverse action is taken as a result of a report. d) Reports may be sent to anyone who requests one.

D

#24. When life insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as a) Estate conservation. b) Estate creation. c) Liquidity. d) Life settlement.

A

#18. When comparing a Joint Life Policy to two individual life policies of the same amount on the same insureds, which condition is true? a) The Joint Life premium can only be paid monthly. b) Joint Life has a higher premium than the total of the two individual policies. c) Joint Life has a lower premium than the total of the two individual policies. d) Joint Life has a premium that is identical to the sum of the two individual policies.

C

#51. As an insurer's field underwriter, a producer has all of the following responsibilities EXCEPT a) Soliciting insurance contracts. b) Collecting premiums. c) Issuing policies on behalf of the insurer. d) Completing applications.

C

50. Which of the following is NOT true regarding a deferred annuity? a) It is used to accumulate funds for retirement. b) It can be purchased with a single lump sum. c) The annuity grows tax deferred. d) Income payments begin within 1 year from the date of purchase.

D

#10. What is the purpose of the Agent's Report in the application process? a) To provide additional information about the applicant to the underwriters b) To explain policy features and benefits to the applicant c) To provide medical information about the applicant to the underwriters d) To give disclosure to the applicant

A

#12. An employee is covered under COBRA. His previous premium payment was $100 per month. His employer now collects $102 each month. Why does the employer collect an extra $2? a) To cover the employer's administration costs b) Penalty for termination c) Premiums go up every year regardless of health conditions d) To cover other employees who qualify to bypass premium payment

A

#25. Considering the principles of liquidity, how would the policyowner use today's cash values in a life insurance policy? a) Use it for emergency expenses b) Secure a car loan next year c) Make a down payment on a home in 5 years d) Fund a retirement

A

#4. If a life insurance policy is purchased by someone who has no insurable interest in the insured, it is considered a) STOLI. b) Estate liquidation. c) Third-party ownership. d) Controlled business.

A

#41. Which of the following is guaranteed under a variable whole life insurance policy? a) Minimum death benefit b) Interest rates c) Cash value d) Stock performance

A

47. What would the insurance company do if an insured under a whole life policy with an accidental death rider intentionally kills himself a couple of months after purchasing the policy? a) Deny only payment of the face amount but pay the rider since suicide is an accident b) Pay the face amount only because suicide is not an accident c) Pay twice the face amount d) Deny the death benefit, but refund the premium

D

#26. Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select? a) Joint and Survivor b) Fixed-amount installments c) Fixed-period installments d) Life income

A

#28. With Adjustable Life, the owner can change all of the following EXCEPT a) The insured. b) The death benefit. c) The premium. d) The length of time the coverage will last.

A

#33. When term insurance is added to the main policy to enhance the policy or provide added benefit or coverage, it is called a a) Term rider. b) Nonforfeiture option. c) Future Income rider. d) Guaranteed Insurability rider.

A

#35. Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care? a) Intermediate care b) Custodial care c) Home health care d) Skilled care

A

#17. When an insured reinstated his major medical policy, he was involved in an accident that required hospitalization. When would this accident be covered upon reinstatement of the policy? a) It would not be covered. b) Immediately c) After 10 days d) After 31 days

B

#32. All of the following are true of the Survivorship Life policy EXCEPT a) It can insure more than 2 lives. b) The premium is based on the age of each insured. c) The death benefit is not paid until the last death. d) The premium would be lower than in a joint life policy.

B