PA Life Exam

Type of authority found in agents contract

Express

Guaranteeing future dividends is considered to be an unfair or deceptive act known as....

misrepresentation

Reduction of premium option uses dividend to reduce

next years premium

An annuitant pays the annuity premium on the 14th of each month. Which best describes this??

Level

Flexible premium adjustable life policy

Universal Life

The Guaranty Association guards against...

insolvency

All true for federal Fair Credit Reporting Act except... A. customer must be notified if adverse action is taken as result of report B. reports may be sent to anyone who requests it C. Insurers not required to give customer copy of report D. Applies to credit reports ordered in connection with insurance, banking, and employment

B

An individual has a $200,000 convertible term life insurance policy. If he chooses, he can A. Convert to term policy with lower face amount without proof of insurability B. Convert to whole life policy for same face amount without proof of insurability

B

Primary source of info that an insurer uses to evaluate an insureds risk for life insurance

Insurance Application

Flexible premium invested in a separate account is...

Variable Universal Life

Guarantees the info explained in the insurance contract is true

Warranty

When an insured terminated membership in the insured group, the insured can convert to

Whole life without proof of insurability

All are true for group life insurance except A. Insureds each own their own contract B. Evidence of insurability is not required C. Premium rates are based upon avg age and gender D. can be converted to whole life

A

Div option that increases death benefit

paid up additions

cash value guarantees in a whole life policy are called

nonforfeiture values

Agent collected initial premium and document verifying he had no injuries or illnesses since application date. This is called?

Statement of good health

If a retirement plan or annuity is "qualified", this means A. Div paid until payments are distributed B. Not permitted by IRS C. Satisfied IRS requirements D. Unlimited uses

C

Bears investment risk in variable life insurance policy

policyowner

Life insurance creates immediate estate. What best explains this? A. Policy has cash value and nonforfeiture values B. Policy generate immediate cash value C. Death benefit always paid to estate of insured D. Face value of policy is payable to beneficiary upon death of insured

D

A whole life policy is surrendered for a reduced paid up policy. The cash value in the new policy will Increase, Decrease, or stay the same?

Increase

An individual acted as an exclusive general agent even though she was not licensed to do so. Since this offense occurred over a period of 60 days, what is the max penalty she faces?

$60,000 and third-degree felony

A married couple purchases life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either of them were unable to continue making premium payments due to death or disability. Which policy rider should their agent recommend? A. Automatic premium loan B. Waiver of premium C. Payor benefit D. Guaranteed insurability

C

In whole life insurance when is the policy cash value scheduled to equal face amount?

insureds age of 100

Pure life annuity settlement options have the _______ monthly benefit

Highest

Contains specific medical details about an applicant A. Application B. Attending physicians statement C. Statement of good health D. Agent report

B

If insurance company issues a policy even though some questions on the application were unanswered, when can the insurer get the answers to those questions?

Never

An insured and his spouse had a kid. Which rider allows the couple to insure the child for a limited time period at a specified amount?

Childrens term rider

The renewable provision allows the policyowner to renew the coverage at the expiration date

without evidence of insurability

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option? A. Paid up add. B. Cash surrender value C. Reduced paid up D. Extended term

D

Insurer uses a formal sharing agreement A. reciprocal B. stock C. mutual

A

Which is not a component of an insurance policy premium? A. Number of beneficiaries B. Mortality costs C. Insurer expenses D. Investment returns

A

What is true about thrift plans? A. Employer contributes certain amount for each $ contributed by employees B. Employee is sole contributor C. Employer is sole contributor D. Employer contributes up to 10% of each employees salary

A

With Adjustable Life, the owner can change all of the following EXCEPT A. Insured B. Death benefit C. Premium D. Length of time the coverage lasts

A

If a life insurance company uses HIV testing as a part of its underwriting, when must an applicant be notified of the procedure? A. Prior notice not required B. Prior to performance of test C. Prior to ordering exam D. Prior to solicitation of policy

B

All are true for Ordinary (Straight) Life policy except A. Builds cash value B. If insured lives to 100, policy mature and face amount is paid to insured C. Does not have guaranteed death benefit D. funded by level premium

C

Difference between straight life and 20-pay whole life policy? A. face amount and cash value B. policy maturity date C. premium payment period D. benefit settlement option

C

To purchase insurance, policyowner must face possibility of losing money or something of value in the event of loss. This is... A. Exposure B. Pure loss C. Insurable interest D. Indemnity

C

The purpose of the Agents report is... A. Explain policy features to applicant B. Provide medical info about applicant to underwriter C. Give disclosure to applicant D. Provide add. info about applicant to underwriter

D

In a deferred annuity, difference between accumulation value and surrender value is the A. Interest credit B. Front end load C. Surrender charge D. Mortality charge

surrender charge

Required in order for a plan to be qualifed A. formally written and communicated to employees B. not permanent C. exclusive benefits of the employer

A

Tax penalty for withdrawing money from an annuity prior to 59 1/2

10%