readiness exam

All of the following statements about mutual insurance companies are correct EXCEPT

'Policy dividends issued by mutual companies are guaranteed and not taxable

How long is the grace period for an individual life insurance policy?

1 month

the incontestability provision included in an annuity contract states that the validity of the contract canot be contested after how many years

2 years

All annuity contracts must have a free examination period of how many days

20 days

How long must a free look period be on all annuity and pure endownment contracts issued in idaho?

20 days

in policy replacement situations, insurers must provide a free-look period of how many days

20 days??

How many Ethics continuing education hours must be completed every 2 years?

24 hours

How many days notice must an insurer provide to an insured reguarding the lapse of a policy due to outstanding loans?

30 days

When a licensee moves to a new address, the commissionar must be notified within

30 days??

If an insured dies, and it is discovered that the insured misstated their age or gender on the application, the life insurance company will.

Adjust the death benefit to what the premium would have purchased at actual age or gender.

An insurer who transacts insurance in this state but whose articles of incorporation are registered in Canada is considered what type of insurer?

Alien

Conditions for an insurance agency seeking to obtain in Idahos Producers license include which of the following?

All agency principals selling insurance must have an individual license/

A loss resulting from which of the following would qualify for the accidental death rider coverage?

An automobile accident

Which of the following is NOT a personal use of life insurance?

An individual buys insurance to fund a buy-sell agreement

To which of the following could a producer pay part of her commission without violating any insurance regulation

Another producer who has a licensed

Who may be the Director of Insurance

Any qualified person appointed by the governor

What of the following is a correct statement concerning assignment

Assignment refers to the person who will receive the benefits of a policy should an insured die.

Which distributions from a modified endowment contract would be taxable as income at the time received ti the extent that the cash value of the contract immediately before the payment exceeds the investment in the contract?

Both, any funds distributed

Partners in a business want to make sure that if one of them were to pass away, their surviving family will receive a fair value for their portion in the business. what life insurance arrangement would be most suited for transitioning the business?

Buy sell agreement

WHile completing a life insurance application the applicant realizes that she could have answered an earlier question differently.

Cross out the incorrect information, write in the correct answer, and have the applicant initial the change.

Which of the following Losses whould likely be covered under the accidental death rider?

Death caused by head on collision

in this state the owner gets a freelook of a specifid number of days from

Delivery of the policy

Which of the following is a correct statement about annuities?

Fixed Annuities do not provide protection against inflation

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?

Fixed amount

What provisions helps to make sure that the insured is protection in the event of an unintentional lapse of the policy

Grace period

All of the following information needs to be included on an application for life insurance EXCEPT

Health insurance policies in force

If a creditor has claims against an insured, what may the insurer do with the proceedings of a life insurance policy?

Hold the proceeds???

Under what circumstances will the contingent beneficiary recieve the death benefit?

If the primary beneficiary dies before the insured.

If a loan request is for payment of due premiums on the policy, how soon must the insurer issue a loan

Immediately

What is the most common name for single policy that is designed to insure two or more lives with a standard premium, and that pays the benefit upon the first death

Joint Life

All of the following are true regarding a producers fiduciary responsibilities EXCEPT

Producers may commingle personal funds with company funds.

Variable insurance and variable annuities are regulated by

SEC, FINRA and departments of insurance

Varible life insurance is regulated by all of the following entities EXCEPT

SEC?

An individual receive a lump sum inheritance. He would like to use the money to create a lifetime income but will be retiring soon. He purchases and annuity and wishes to receive payments beginning 2 months. What did he buy ?

Single premium deferred annuity

A whole life policy that will generate immediate cash value is

Single premium policy

Which of the following will NOT be included in the buyers guide?

Specific info about the policy

If an applicants health is poorer than that of an average applicant, the policy may be issued.

Substandard

WHich of the following is permissible reason for an insurance company to contest payment of a claim based on statements in the application?

The applicant contains material misstatments

What happens to the face amount of a whole life policy if the insured reaches the age of 100?

The face amount is paid to the insured

Which of the following would not be eligible for coverage under key person?

The owner of a shop

If an applicant submits the initial premium without an application, which action constitutes acceptance?

Underwriters approve the application

Which of the following policies can be described as a flexible premium adjustable life policy?

Univeral life

WHo acts on behalf of the principal

agent

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

at insureds age 100

All of the following are requirements for obtaining a producers license except

attainment of age 21

WHich of the following is NOT an indicator of a competent party?

business profession

Which of the following elements of an insurance contract requires payment of premium?

consideration

All of the following are true about Group Life insurance EXCEPT

evidence of insurability is usually not required

Which of the following is NOT a type of a hazard?

exposure

Which type of authority is found in the agents contract

express

WHen a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

extended term

Under which of the following conditions would life insurance proceed the taxable by the federal government

if there is transfer for value

An annuitant accidentally misstated her gender on application for her policy. The insurance company later discovers this as it prepares to pay on her policy. Which of the following will most likely happen?

in accordance to her actual gender

As it relates to life settlements, the term owner means

owner of policy

Which dividend option will increase the death benefit?

paid up additions

all of the following are true of annually renewable term insurance except

proof of insurability must be provided at each renewal

What effect will the long-term care rider have on the death benefit of a life insurance policy if LTC benefits were paid to the insurer.

reduce the death benefit

Which of the following is provision found in life insurance policies?

reinstatement

In a deferred annuity, the difference between the accumulation value and the surrender value is the

surrender charge

Upon the surrender of a life insurance policy, any cash value accumulated in excess of the premium payments is

taxed as ordinary income

Which of the following is TRUE of level term insurance?

temporary protection

In an insured dies while in the midst of grace period, which of the following entities will recieve the death benefit?

the beneficiary

When a settlement option is chosen at death, how are the monthly income payments taxed?

the principal portion is generally income tax free while the interest portion is taxed as ordinary income

if an annuity has guaranteed minimum interest rate, this means

the rate wil never rise above guaranteed minimum

A life insurance policy qualifies as a modified endownment contract (MEC) if the amount of premium paid exceeds the amount that would have provided paid-up insurance in how many years?

7 years

An annuity has accumulated the cash value of $70,000, of which $30,000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive

70,000

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?

Joint and survivor

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

Level

The Human life value approach to determining life insurance needs is based upon which of the following ideas?

Loss of the breadwinner's income.The human life value approach is based upon loss of income

Which of the following types of insurance products would be appropriate for an individual with a low income high insurance needs?

Term insurance

In life insurance, which of the following is NOT required to have an insurable interest in the insured?

The Beneficiary

The director may suspend a producers license for all of the following except

traffic violation

which of the following would be considered a peril?

{Fire}, wind, water and theft

An individual is currently licensed in another state, although she resides in idaho. In order to avoid a prelicensing examination, how soon after cancelling her previous license should she apply for a resident license?

90 days

An insured recieves his life insurance policy and is not satisfied with the provisions. He decided to return the policy after 25 days. What percentage of his premium will be refunded?

90??

to purchase insurance, the policy owner must face the possibility of losing money or something of value in the event of loss! What is this concept called?

Insurable Interest

Which of the following term refers to solicitation, negotiation, effectuation or advising related to an insurance contract?

Insurance transaction

If an insurer suspects that insurance fraud is being committed, to whom should it be reported?

NAIC -National Association insurance commisioner

if an 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; the insurer has waived its right to answer those answers by issuing the policy

When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?

Paid up additions

key person insurance can provide protection for all of the following economic losses to a buisness EXCEPT

Pay the death benefit to the estate of the insured

Which of the following is true reguarding a joint life annuity?

Payment stops at the first death

A married couple purchases a life insurance policy for their newborn baby. They are concerned about what would happen to the policy if either of them were unable to continue making the premium payments due to death or disability. WHich policy rider should their agent recommend?

Payor benefit

What is the difference between straight life policy and 20 pay whole life policy

Premium payment period

Which of the following types of insurance is invested based, has a level fixed premium, and a nonguaranteed cash value?

Variable Whole Life

Because of an injury, an insured has been unable to work for 9 months. he paid the policy premium for his life insurance for the first 6 months of disability, but didn't have to pay anything for the remaining 3 months, yet the policy remained in force. The policy includes

Waiver of premium rider

Credit life insurance and credit disability insurance can be issued in all of the following terms EXCEPT

group policy of disability insurance issued to creditors on a term plan insuring debtors, or disability benefit provision in group credit life insurance policies to provided such coverage .

The mechanism used to pay covered claims and prevent financial losses to claimants and policyowners when an insurance company becomes insolvent is a

guaranty association

Because of the imposed blackout period, the surviving spouse will not receive social security benefits until

he or she qualifies for retirement benefits

A jumping juvenile policy is unique in that the death benefit automadiclly

increase at a certain age

hazard or conditions or situations that

increase the liklihood of a loss occurring

In order to reinstate a life insurance policy the insured must do all of the following EXCEPT

pay next years premium in advanced

An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as

twisting