WFG Life Insurance
A candidate for a producer license passed his licensing exam 6 months ago but has not applied for a license yet. Which of the following is true? a) The candidate has 6 more months to apply for a license. b) The candidate will need to apply for a license immediately. c) The candidate has waited too long to apply for a license and must retake the examination. d) The candidate does not need to apply for a license. After passing the exam, all required information is transmitted to the Insurance Department by the testing provider.
a) The candidate has 6 more months to apply for a license. In order to obtain a producer's license, candidates need to pass a licensing exam. The candidate must then apply for a license within 1 year.
If an insured requires an application in order to reinstate a policy, and if the insured requests reinstatement in writing, an application must be delivered to the insured within a) 7 days b) 10 days c) 15 days d) 30 days
b) 30 days If, in order to renew or reinstate a life insurance or annuity policy, an insurer must first receive an application, the insurer must supply this application to the insured within 30 days, upon the insured's request.
The minimum number of credits required for partially insured status for Social Security disability benefits is a) 4 credits b) 6 credits c) 10 credits d) 40 credits
b) 6 credits. To be considered partially insured, an individual must have earned 6 credits during the last 13-quarter period.
Which of the following statements is true regarding the cash value in a Universal life policy? a) The insurer backs the cash value with a nonguaranteed interest rate. b) The insurer backs the cash value with a current interest rate. c) The insurer credits the cash value in the policy with a current interest rate. d) The insurer credits the cash value in the policy with a guaranteed intereste rate.
c) The insurer credits the cash value in the policy with a current interest rate. The insurer credits the cash value in the policy with a current (nonguaranteed) interest rate and backs the cash value with a lower guaranteed (contract) rate of interest.
The term "illustration" in a life insurance policy refers to a) A depiction of policy benefits and guarantees. b) Pictures accompanying a policy. c) Charts and graphs. d) A presentation of nonguaranteed elements of a policy.
d) A presentation of nonguaranteed elements of a policy. The term "illustration" means a presentation or depiction that includes nonguaranteed elements of a policy of individual or group life insurance over a period of years.
Which of the following is the closest term to an "authorized" insurer? a) Certified b) Licensed c) Legal d) Admitted
d) Admitted Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this? a) Incontestable clause b) Grace period c) Reinstatement provision d) Waiver of premium provision
c) Reinstatement provision A lapsed policy may be reinstated within 3 years by paying back premiums, with interest, and proving insurability.
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement? a) $200,000 b) $100,000 plus the total of paid premiums c) $0 d) $100,000
a) $200,000 The beneficiary would most likely receive twice the face value of the policy, since his fatal injuries were caused by an accident and he died within the 90-day benefit limit stipulated in most policies.
What type of insurance would be used for a Return of Premium rider? a) Decreasing Term b) Annually Renewable Term c) Increasing Term d) Level Term
c) Increasing Term The Return of Premium Rider is achieved by using increasing term insurance. When added to a whole life policy it provides that at death prior to a given age, not only is the original face amount payable, but also all premiums previously paid are payable to the beneficiary.
What is the minimum licensing age for nonresident insurance producers in New Jersey? a) 20 b) 21 c) 25 d) 18
d) 18 To qualify for a producer license, all candidates must meet be at least 18 years of age or older.
Provided that it is a first offense, what is the maximum penalty for failing to respond to a subpoena? a) $5,000 b) $500 c) $100 d) $10,000
a) $5,000 Any person violating an insurance law or regulation is liable to a penalty of no more than $5,000 for a first offense and no more than $10,000 for each subsequent offense.
If a producer has been convicted of a crime, he or she must notify the Commissioner within a) 30 days. b) 10 days. c) 15 days. d) 20 days.
a) 30 days. A producer must notify the Commissioner within 30 days of a conviction of a crime, indictment, or filing of a formal charge against him/her.
All other factors being equal, the least expensive first-year premium payment is found in a) Annually Renewable Term. b) Increasing Term. c) Decreasing Term. d) Level Term.
a) Annually Renewable Term. Annually renewable term is the purest form of term insurance. The death benefit remains level, but the premium increases each year with the insured's attained age. In decreasing policies, while the face amount decreases, the premium remains constant throughout the life of the contracts. In Level term and increasing term policies, the premium also remains level for the term of the policy. Therefore, in the other types of level policies, the first-year premium would not be different from any other year.
Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application? a) Return the application to the applicant for completion b)Issue a policy anyway since the application has been submitted c) Ask the producer who solicited the policy to complete and resign the application d) Fill in the blanks of the best of the insurer's knowledge
a) Return the application to the applicant for completion Any unanswered questions need to be answered before the policy is issued. If the insurer receives incomplete applications, they need to be returned to the applicants for completion.
During policy replacement, the replacing insurer must notify existing insurers within what time period? a) 90 days b) 5 business days c) 10 calendar days d) 30 days
b) 5 business days When a replacement is being recommended by an agent, a replacing insurer has a duty to notify any existing insurer within 5 business days that a replacement may be in order for an existing policy and mail a copy of the illustration or policy summary for the replacement policy.
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a) Nonforfeiture option. b) Guaranteed insurability rider. c) Paid-up additions option. d) Cost of living provision.
b) Guaranteed insurability rider. The Guaranteed Insurability rider allows the policyowner to purchase specific amounts of additional insurance at specific dates or events, without proving continued insurability. Rates for the additions are based upon attained age.
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do? a) Pay the full death benefit and refund excess premium. b) Pay a reduced death benefit. c) Pay the full death benefit. d) Pay nothing; there was a misrepresentation on the application.
b) Pay a reduced death benefit The incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years. However, it does not apply to statements relating to age, sex, and identity.
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? a) The premium for individual coverage will be based upon the insured's attained age. b) The insured may choose to convert to term or permanent individual coverage. c) The insured would not need to prove insurability for a conversion policy. d) The insured may convert coverage to an individual policy within 31 days.
b) The insured may choose to convert to term or permanent individual coverage. When group coverage is converted to an individual policy, the insurer will determine the type of coverage, usually permanent insurance.
Under an extended term nonforfeiture option, the policy cash value is converted to a) A higher face amount than the whole life policy. b) The same face amount as in the whole life policy. c) The face amount equal to the cash value. d) A lower face amount than the whole life policy.
b) The same face amount as in the whole life policy. Under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy.
When an employee terminates coverage under a group insurance policy, coverage continues in force a) Until the employee can obtain coverage under a new group plan. b) Until the employee notifies the group insurance provider that coverage conversion policy is issued. c) For 31 days. d) For 60 days.
c) For 31 days. An employee has 31 days under the conversion privilege to convert to an individual policy.
A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefits rider. In which of the following scenarios will the rider waive the payment of premium? a) If the daughter is disabled for more than 3 months b) If the daughter is disabled for any length of time c) If the father is disabled for more than 6 months d) If the father is disabled for at least a year
c) If the father is disabled for more than 6 months Payor benefit only pays if the owner, the father in this example, is disabled for at least 6 months.
What is the purpose of a conditional receipt? a) It serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company. b) It is given by the agent only to applicants who fully prepay all scheduled premiums in advance of the policy issue. c) It is intended to provide coverage on a date earlier than the date of the issuance of the policy. d) It guarantees the applicant that a policy will be issued in the amount applied for in the application.
c) It is intended to provide coverage on a date earlier than the date of the issuance of the policy. Coverage commences on the date of the application or the date of a medical examination, whichever is later, on the condition that the applicant is determined to be insurable at the rate applied for.
Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting? a) Reciprocal b) Fraternal c) Stock d) Mutual
c) Stock Only stock insurance companies are owned and controlled by stockholders.
Which of the following is TRUE about nonforfeiture values? a) A table showing nonforfeiture values for the next 10 years must be included in the policy. b) Policyowners do not have the authority to decide how to exercise nonforfeiture values. c) They are required by state law to be included in the policy. d) They are optional provisions.
c) They are required by state law to be included in the policy. Nonforfeiture values are required by state law to be included in the policy, and cannot be altered by the policyowner. A table showing the nonforfeiture values for the next 20 years must be included in the policy.
If an applicant's license has lapsed within the past year, the applicant may apply for late renewal of the license within the maximum of how many months of expiration? a) 3 months b) 6 months c) 9 months d) 12 months
d) 12 months If an applicant's license has lapsed within the past year, the applicant may apply for late renewal of the license within 12 months of expiration.
What is the waiting period on a Waiver of Premium rider in life Insurance policies? a) 30 days b) 3 months c) 5 months d) 6 months
d) 6 months Most insurers impose a 6-month waiting period from the time of disability until the first premium is waived.
Which of the following would be considered a nonmedical insurance application? a) An application that does not ask any questions about the applicant's medical history b) An application submitted with the Agent's Report c) Any application for life insurance d) An application on which the medical information is completed by the applicant and the agent only
d) An application on which the medical information is completed by the applicant and the agent only An application on which all of the questions, including medical history questions, do not need to be completed by medical professionals, and may be completed by the applicant and the agent.
If the annuitant dies during the accumulation period, who will receive the annuity benefits? a) Owner b) Insurance company c) Estate d) Beneficiary
d) Beneficiary If the annuitant dies during the accumulation period, the beneficiary receives benefits from the annuity: either the amount paid into the plan or the cash value, whichever is greater.
During partial withdrawal from a universal life policy, which portion will be taxed? a) Cash value b) Principal c) Loan d) Interest
d) Interest During the withdrawal, the interest earned on the withdrawn cash value may be subject to taxation.
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possibly otherwise. What dividend option could she use? a) One-year term b) Reduction of premium c) Accumulation at interest d) Paid-up option
d) Paid-up option With the paid-up option, the insurer can accumulate dividends at interest and then use them, in addition to interest and the policy's cash value, to pay the policy earlier than planned. This is different from paid-up additions, in which the dividends are used to buy additional policies that increase the face amount of the original policy.