State board test review part 5
All of the following allow practices regarding producers commissions except
Offering a financial reward to an unlicensed individual for providing a sales lead
Guaranteeing future dividend is considered to be an unfair or deceptive act known as
Misrepresentation
All of the following are true of group life insurance except
The insureds each own their own contract
Policy loan requests except for loan requests for payment of due premium may be deferred for a period of up to
6 momths
The policy owner has an option to pledge the life insurance policy as collateral for a bank loan. This is called
A collateral assignment
All of the following are ways to handle risk except
Elimination
An important fact about the financial status of an insurer was deliberately withheld. Which of the following terms best describes this action
False financial statement
Because of the imposed blackout period the surviving spouse will not receive social security benefits until
He or she qualifies for retirement benefits
An annuitant pays the annuity premium on the 14th of each month. Which of the following best describes this arrangement
Level
A stock insurer is defined as an insurer
Owned by its stockholders
What is the purpose of the surrender charge in a deferred annuity
To compensate the company for loss of investment value
A lender who conditions approval of a loan on the condition that the borrower purchase insurance from that lended may be guilty of
coercion
Life insurance can provide which of the following?
Survivor protection
All of the following are true of annually renewable term insurance except
proof of insurability must be provided at each renewal
Which of the following riders pay a beneficiary a death benefit that is double or triple the face amount of the insured's death was caused by an accident as defined in the policy
An accidental death rider
Underwriters use all of these methods to protect the insurer against adverse selection except
Only accepting a small percentage of applicants
A whole life policy is surrendered for a reduced paid up policy. The cash value in the new policy will
continue to increase
A loss resulting from which of the following would qualify for the accidental death rider coverage
An automobile accideng
How many days is the free look period in most life insurance policies
10 days
With Adjustable Life, the owner can change all of the following EXCEPT
insured
If an insured dies and it is discovered that the insured misstated his/her age or gender the insurance company will
Adjust the death benefit to what the premium would have purchased at the actual age
An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount
Children's term rider
A whole life policy that will generate immediate cash value is a
Single premium policy
In life insurance which of the following is not required for you to have an insurance interest in the insured
The beneficiary
Who is responsible for content and form of insurance advertisements
The insurer whose policies are being advertised
While completing a life insurance application. The applicant realizes that she should have answered an earlier question differently. what should the agent do to make the necessary change
Cross out the incorrect information, write in the correct answer, and have the applicant initial the change
How will life insurance proceeds that are paid as a lump sum received by the beneficiary
Free of federal income taxation
An agent tells an insured that if he replaces his current insurance policy for a newer one his dividend will be higher and his premium will be slightly lower. The policy however would not offer neither one of these things. What type of misrepresentation is being committed
Twisting
Considering the principles of liquidity how would the policy owner use today's cash value in a life insurance policy
Use it for emergency expenses
How is a licensee's date of continuating education credit review determined
By the licensee month and date of birth
An annuity has accumulated the cash value of $70000 of which $30000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive
$70,000
According to the life insurance replacement regulations which of the following would be an example of policy replacement
A policy is reissued with a reduction in cash value
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?
Extended term
Which of the following could reduce the amount of death benefit
Failure to repay a policy loan
To purchase insurance the policy owner must face the possibility of losing money or something of value in the even if a loss. What is this concept called
Insurance interest
All of the following statements are true regarding an ordinary (straight) life policy except
It does not have a gaurenteed death benefit
An equity indexed annuity will grow based upon
Performance of a recognized index
What does the application of contract of adhesion mean
Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured
Which of the following is required in order for a plan to be qualified
The plan must be formally written and communicated to the employees
Which of the following elements of an insurance contract requires paying premium and providing a statement of good Health
Consideration
Key person insurance can provide protection for all of the following economic losses to a business except
pay the death benefit to the estate of the insured
Which of the following is not one of the independent rating services that publishes guides to insurance companies financial integrity
NAIC
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 misrepresentation
Partners in a business want to make sure that if one of them was to pass away their surviving family will receive a fair value Of their portion in the business. What life insurance arrangement would be most suited for transitioning business?
Buy sell agreement