XCEL Final Exam
Reinstatement
Which of these provisions require proof of insurability after a policy has lapsed?
Individual Retirement Account (IRA)
Which of these retirement plans can be started by an employee, even if another plan is in existence?
The group was formed for a purpose other than acquiring insurance.
Which requirement must be met for an association to be eligible for a group life plan?
20k
On June 1, 2004 G takes out a $20,000 Whole Life insurance policy with an Accidental Death and Dismemberment rider. On July 15, 2005 G intentionally overdoses on sleeping pills and takes her own life. What will G's beneficiary receive as a death benefit?
Set up a meeting with the applicant to answer the remaining questions
P is a producer who notices 5 questions on a life application were not answered. What actions should P take?
A family maintenance policy
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase?
$50,000 minus any outstanding policy loans
P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?
Expires at the end of the policy period
Term insurance has which of the following characteristics?
the initial premium.
The consideration clause in a life insurance policy indicated that a policy owner's consideration consists of a completed application and
enforce all laws of the state governing insurance companies and to make rules and regulations relating to the business of insurance.
The duty of the Commissioner of Insurance in Colorado is to
Contest a claim during the contestable period
The incontestable clause allows an insurer to
determine the solvency of the company
The insurance Commissioner may examine the records of an insurance company in order to
Accidental Death and Dismemberment rider (AD&D)
The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n)
protect the public
The primary reason that Colorado requires insurance producers to be licensed is to
ensure that claims filed against insolvent companies will be paid
The purpose of Guaranty Fund is to
Single premium
An immediate annuity consists of a
Application will be returned to the writing agent.
An incomplete life insurance application submitted to an insurer will result in which of these actions?
30
An insurer that terminates a producer's appointment must inform the Commissioner within how many days?
Applicant
Any changes made on an insurance application requires the initials of whom?
Income tax and 10% penalty assessed upon funds withdrawn from the Qualified Plan
At the age of 45, an individual withdraws $50, from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in
additional Whole Life coverage at specific times
B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurabillity, stated amounts of
level
What kind of premium does a whole life policy have?
prior use of marjuana
A Medical Information Report (MIB) report may disclose which of the following
Whole life and Increasing term
A Return of Premium Life insurance policy is
31
A group life insurance policy holder must be given a grace period for premium payment of how many days.
Certificate
A person who is insured within a group contract will be given a
Mode of Premium
A policy owner is allowed to pay premiums more than once a year under which provision?
Irrevocable
A policy would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need?
Premium Mode
A policy-owner is able to choose the frequency of premium payments through what policy feature?
24
A producer in Colorado must complete a minimum of ow many hours of continuing education every 2 years?
Another producer who is licensed in the same line of insurance
A producer may legally share commissions only with
A policy summary and buyer's guide
A producer who sells an individual life insurance policy in Colorado MUST deliver to the policy owner...
180 days
A temporary license issued to an applicant for an insurance license is valid for a maximum of how many days
does not guarantee a return on its investment accounts
A variable insurance policy
misrepresentation
A verbal or written statement which misleads a policy's features, benefits, or coverage is considered
Certificates of authority
According to the Colorado Fraud Statute, all of the following must contain a warning against insurance fraud except
representing a foreign insurance company
All of the following activities may result in the revocation or suspension of a producer's license EXCEPT
Level term
D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?
The full face amount
D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a war exclusion clause. How much will D's beneficiary's receive?
Decreasing term policy
F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?
Claims are denied under the suicide clause of the policy
How do life insurance companies handle cases where the insured commits suicide within he contract's stated contestable period?
Policy was returned within the free-look period, premium will be fully refunded.
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?
interest to the insurer is decreased while the administrative costs are increased
Quarterly premium payments increase the annual cost of insurance because
24
Renewing a producer's license requires___hours of continued education every 2 years.
0
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?
A renewable
T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?
Child term rider
Which rider provides coverage for a child under a parent's life insurance policy?
When insurable interest exists
Which situation allows the producer to also be the beneficiary on a client's application for life insurance?
A modified endowment contract
Which type of policy is considered to be over funded, as stated by IRS guidelines?
Beneficiary
Who is NOT required to sign a life insurance application?
Complete a pre licensing examination
An applicant for a resident insurance producer's license MUST meet which of the following requirements?
applicant's physician
An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the
Communication or materials used within an insurer's own organization
All of the following are considered a form of advertisement Except
Limited Lines Credit
Continuing education is required of individuals licensed to sell which of the following types of insurance?
Life insurance
Continuing education requirements in Colorado apply to which of the following persons?
Resident producers
Continuing education requirements in Colorado apply to which of the following persons?
issued in an amount not to exceed the amount of the loan
Credit life insurance is
age 100
How long does the coverage normally remain on a limited-pay life policy?
If the primary beneficiary dies before the insured
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
separate insurance trust account
If a producer is going to deposit any premium into a bank account prior to remitting the funds to the insurer, he/she must use a
5k
If a producer knowingly violates the Unfair Trade Practices Laws of Colorado, the Office of the Insurance commissioner may fine the producer a MAXIMUM of which of the following amounts per violation?
w/in 5 business days of the insurer receiving the application
If an annuity application was not taken in person, an insurer must provide the applicant a Buyer's Guide
is incorporated and formed in CO
In Colorado, a domestic insurance company is defined as a company that
2 yrs
In Colorado, a producer's license must be renewed every
an insurance company
In Colorado, an individual producer is considered to represent
performance is conditioned upon a future occurrence
Insurance policies are considered aleatory contracts because
Daughter
K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?
30 pay life
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?
100 hour pre licensing education
To be licensed to sell life, accident, and health insurance in Colorado, an applicant must complete
1 yr
Under the suicide clause, a life insurance claim cannot be denied due to suicide after a period of ___ from the policy's effective date.
Signed HIPAA disclosure
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following except
hold both a life and securities license
Variable Life products require a producer to
Insurer's corporate business account
Variable annuities may invest premiums in each of the following except
Immediate annuity
W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)
Assign policy ownership to the bank
What action can a policy owner take if an application for a bank loan requires collateral?
Forward the application o the insurer without the initial premium.
What action should a producer take if the initial premium is NOT Submitted with the application?
Social Security
What is Old Age and Survivors Health Insurance (OASDHI) also known as?
Promise to pay a death benefit
What is the consideration given by an insurer in the consideration clause of a life policy?
To detect and deter terrorism
What is the purpose of the USA Patriot Act
The early years are charged more than what is needed
What is the underlying concept regarding level premiums?
Family Maintenance Policy
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
Irrevocable beneficiary
What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made?
Survivor-ship
What type of life policy covers two people and pays upon the death of the last insured?
20-pay life
What type of policy would offer a 40-year old the quickest accumulation of cash value?
Modified Endowment Contract (MEC)
When a life insurance policy exceeds certain IRS table values, the result would create which of the following
sexual orientation
When a life insurance underwriter is determining insurability, it is illegal o base these decisions on
Conversion provision
When a policy owner exchanges a term policy for a whole life policy providing proof of good health, which of these apply?
The policy proceeds will be paid if the employee dies during the conversion period.
When an employee is terminated, which statement about a group term life conversion is true?
Anytime
When can a policy-owner change a revocable beneficiary?
at future dates specified in the contract with no evidence of insurability required.
When does a guaranteed Insurability Rider allow the insured to buy additional coverage?
When insurable interest exists
When is it appropriate for a producer's spouse to be the primary beneficiary on an applicant's life insurance policy?
Writing primarily controlled business
Which activity may result in suspension or revocation of a producer's license?
Accumulation at Interest
Which of the following Dividend options results in taxable income to the policyowner?
Collecting premiums and paying then to the insurance company
Which of the following basics is a producer's fiduciary responsibility?
Certificates
Which of the following documents are NOT required to mention the Colorado Fraud Statute?
describing a universal life policy as a security
Which of the following is an example of a misrepresentation?
Free look policy
Which of the following offers an insurance applicant the right to review the contract and receive a full refund?
payor clause
Which of the following provisions guarantees that premiums will be waived if a juvenile life policy owner becomes disabled?
Must have a terminal illness to qualify
Which of the following statements is correct about accelerated death benefits?
Entire contract provision
what provision in a life insurance policy states that the application is considered part of the contract?
Investor-Originated Life Insurance
which of these arrangements allows one to bypass insurable interest laws?