STUDY

If an insurance company sends e-mail solicitations to potential customers, and if a customer chooses to opt out of the list, then how much time will the company have to remove the person from solicitation lists?

10 days

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

2 years

In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?

5 years

Which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy

Which of the following components must a life insurance policy have to allow policy loans?

Cash value

Which of the following elements in an Indexed Universal Life policy is tied to an index?

Cash values

What does "liquidity" refer to in a life insurance policy?

Cash values can be borrowed at any time

Which component increases in the increasing term insurance?

Death benefit

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

Which of the following is used to determine the annuity amounts that are not taxable?

Exclusion ratio

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?

Fraud

All of the following are Nonforfeiture options EXCEPT

Interest only

The insurer may suspect that a moral hazard exists if the policyholder

Is not honest about his health on an application for insurance

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection

Why is an equity indexed annuity considered to be a fixed annuity?

It is a guaranteed minimum interest rate

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium

Which of the following is true about the CAN-SPAM Act?

It protects consumers from receiving unwanted solicitation from companies

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Limited pay whole life

Which of the following would provide an underwriter with information concerning an applicant's health history?

MIB

The dividend option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the

One-year term option

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

Paid-up option

An insured died by suicide one year after the life insurance policy was issued. The insurer will

Refund the premiums paid

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Survivor protection

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

The benefit is received tax free

How is it determined whether an insurer is allowed to write business in a state?

The insurer's domicile or location of incorporation will determine whether a company is domestic, foreign, or alien

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account

What kind of policy allows withdrawals or partial surrenders?

Universal Life

Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?

Withdraws are not taxable

In increasing and decreasing term policies, which policy component fluctuates during the policy term?

death benefit