RIDINES TEST
Which of the following are considered activities of daily living in most long-term care policies?
Eating and dressing
An agent's license has been suspended, but he continues to transact insurance for his existing clients. This will be considered a(n)
Felony
At what point would an automatic premium loan be generated?
Following the grace period
All of the following statements about mutual insurance companies are correct EXCEPT
Policy dividends issued by mutual companies are guaranteed and not taxable
A whole life policy is surrendered for a reduced paid-up policy. The cash value in the new policy will
Remain the same
Which risk classification is rep
Standard
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
What is the purpose of key-person insurance?
To cover decreased business revenues as a result of the death of a key employee
An annuity has accumu
$70,000
A distribution from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvested in an IRA within
60 days
Where are premiums from fixed accounts invested?
A separate account (unsure may be general)
In which of the following cases the insured must consent in writing to the life insurance contract?
A spouse is purchasing insurance on their spouse
Which of the following would be required to become licensed as an insurance producer?
An officer of an insurer who does not receive commissions
Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs?
Applicants who may require a larger death benefit in the future should buy convertible term insurance
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?
Cash surrender value
Which of the following is true of the taxation of cash values in a business life insurance policy?
Cash values grow tax deferred (unsure)
If the Insurance Commissioner believes that an insurer has engaged in an unfair method of competition, what may the Commissioner issue?
Cease and desist order
To be valid, an insuran
Countersignature
Cash Value guarantees in a whole
Dividends
Under which of the following conditions would life insurance proceeds be taxable by the federal by the federal government?
If there is a transfer for value
Which of the following best describes life annuity with period certain option?
It guarantees benefit payments for life of the annuitant and for a specified period for the beneficiary
According to this state's rules regulating the advertisement of life insurance, advertisement does NOT include which of the following?
Material prepared by the insurer for training new agents
Upon surrender of a life insurance policy, any cash value accumulated in excess of the premium payments is
Not taxed
When term insurance is added to
Term Rider
Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application?
The application contains material misstatements
What does the application contract of adhesion mean?
The holder of the contract has the ultimate power of promise
In a life insurance application, all of the following signatures will be required EXCEPT
The home office underwriter (unsure)
Life insurance creates an immediate estate. Which of the following best explains this statement?
The policy generates immediate cash value
Which of the following is TRUE regarding premium in a 10-year level premium policy?
The premium will remain level for 10 years
A stock insurer is defined as an insurer
owned by its stockholders
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:
Nonforfeiture options
Insurers must screen all marketing plans to assure that an advertisement does NOT use as the name of an annuity contract ant phrase that
Does not emphasize investment or tax features to such a degree that prospective buyers believe that the contract is for anything other than insurance purposes (unsure)
An annuitant pays the annuity premium on the 14th
Level
Which method of dealing with risk is applied when insurance is purchased?
Transfer
The risk selection and classification process is known as
Underwriting
