State Exam

If an agent suspects that insurance fraud is being committed, within how many days must the agent notify the Insurance Fraud Unit of the Department of Insurance?

30 days

The Commissioner of Insurance issues a cease and desist order to an agent. If the agent wishes to contest the charges in court, how many days after the order was issued does the agent have to make the request?

60 day

According to the Entire Contract provision, a policy must contain

A copy of the original application for insurance

Which of the following is another term for the accumulation period of an annuity?

Pay-in period (The accumulation period is also known as the pay-in period. It is the period of time over which the annuitant makes payments (premiums) into an annuity.)

Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?

Premiums are not tax deductible as a business expense.

Which nonforfeiture option provides coverage for the longest period of time?

Reduced Paid-Up

Which of the following best details the underwriting process for life insurance?

Selection, classification, and rating of risks

Methods used to pay the death benefits to a beneficiary upon the insured's death are called

Settlement options

Which of the following statements about a suicide clause in a life insurance policy is TRUE?

Suicide is excluded for a specific period of years and covered thereafter.

Which of the following would help prevent a universal life policy from lapsing?

Target premium

The advantage of qualified plans to employers is

Tax-deductible contributions

The following are all causes for the Insurance Commissioner to suspend or impose conditions upon the continuance of an agent's license EXCEPT

The applicant has been shown to be a poor personal credit risk

If a life insurance policy has an irrevocable beneficiary designation,

The beneficiary can only be changed with written permission of the beneficiary.

All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT

The employer can receive a current tax deduction for any contributions made to the plan.

All of the following are true of key person insurance EXCEPT

The plan is funded by permanent insurance only.

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT

The policy is owned by the company

What is the purpose of settlement options?

They determine how death proceeds will be paid

All of the following are true regarding the guaranteed insurability rider ЕХСЕРТ

This rider is available to all insureds with no additional premium.

Which of the following is the basic source of information used by the company in the risk selection process?

application

The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option in this case?

beneficiary

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

false advertising

Which two terms are associated directly with the premium?

Level or flexible

The Gramm-Leach-Bliley Act was passed to

Protect private customer information filed with a financial institution.

All advertisements are the responsibility of the

insurer

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

unilateral

How much notice must the Commissioner provide to an insurer prior to suspending the insurer's Certificate of Authority?

10 days

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?

100% participation of members is required in noncontributory plans.

In response to alleged fraud violation, an insurer must respond to the Department's request for relevant information to an investigation within

15 day

How long is the incontestability period in group life insurance policies issued in Texas?

2 years

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory

Suggesting negotiations in settling the claim.

All of the following are unfair claims settlement practices EXCEPT

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies.

All of the following statements are correct regarding credit life insurance EXCEPT

Benefits are paid to the borrower's beneficiary.

Which of the following is used to compare the cost of one life insurance policy against another in order to guide prospective purchasers to policies that are competitively priced?

Cost comparison methods

Which of the following is TRUE regarding the insurance amount in a credit life policy?

Creditor can only insure the debtor for the amount owed.

A producer must do all of the following when delivering a new policy to the insured EXCEPT

Disclose commissions earned from the sale of the policy.

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer.

The requirement that an agent not co-mingle insurance monies with their own funds is known as

Fiduciary responsibility

When possible, what should insurers strive to eliminate from illustrations?

Footnotes and caveats

Two attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose

HR-10 (Keogh Plan)

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this

Illegal

Annually renewable term policies provide a level death benefit for a premium that

Increases annually

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?

Inspection report

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring clause

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

Which of the following best describes the MIB? It Is a nonprofit organization that maintains underwriting information on

It Is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?

It does not guarantee that the entire principal amount will be paid out.

In which of the following situations is it legal to limit coverage based on marital status?

It is never legal to limit coverage based on marital status

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

Making comparisons between different policies