Exam Fx Life practice quiz

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered a)A required disclosure. b)A legal representation of the Association. c)An unfair trade practice. d)A misrepresentation.

C

An insured receives an annual life insurance dividend check. What term best describes this arrangement? reduction of premium annual dividend provision accumulation at interest cash option

cash option

The type of insurance sold to a debtor and desined to pay the amount due on a loan if the debtor dies before the loan is repaid is called

credit life

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? a)3 days b)5 days c)10 days d)14 days

A

The Washington Insurance Code regulation regarding policy replacement applies to which of the following types of transactions? replacement of policies by the same insurer group life insurance immediate annuity contract credit life insurance

Immediate annuity contract

which of the following best describes gross annual premium? expense premium net premium plus expenses annual loading basic insurance rate plus commissions

Net premium plus expenses

how many eligible employees must elect coverage before a policy can be placed for a Public Employee Association?

at least 75%

What must happen when an individual policy or annuity has been personally delivered to the policyowner? a)The producer must go over the policy with the policyowner .b)A notary public must witness the exchange .c)The policyowner must sign a delivery receipt. d)The policyowner must pay the annual premium in full

c

the commissioner of insurance does NOT have the authority to approve rates approve policy forms withdraw rates approvals set rates

set rates

All of the following are true regarding a decreasing term policy EXCEPT a)The payable premium amount steadily declines throughout the duration of the contract. b)The death benefit is $0 at the end of the policy term. c)The contract pays only in the event of death during the term and there is no cash value. d)The face amount steadily declines throughout the duration of the contract.

A

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's a)Ancestry. b)Credit history. c)Habits. d)Prior insurance.

A

Upon reinstatement or renewal of a policy, after a written request by the insured, how soon must an insurer provide a copy of the policy application? a)7 days b)10 days c)15 days d)20 days

C

When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy for a)8 years. b)10 years. c)3 years. d)5 years.

C

Which of the following is NOT true regarding policy loans? a)An insurer can charge interest on outstanding policy loans. b)A policy loan may be repaid after the policy is surrendered. c)Money borrowed from the cash value is taxable .d)Policy loans can be repaid at death.

c

risk is

the uncertainty or chance of class

Which of the following is TRUE about a class designation?a)Beneficiaries are not identified by name. b)Beneficiaries must be part of the insured's immediate family. c)It is not allowed. d)It determines the succession of beneficiaries.

a

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

it has a guaranteed min interest rate

which of the following is true regarding a policy assignment

it transfers rights of ownership from one owner to another

variable whole life insurance is bade on what type of premium? flexible graded level fixed increasing

level fixed

An adjustable life policyowner can change what? the insured the coverage period the mortality expense the investment account

the coverage period

which of the following is true regarding the insurance amount in a credit life policy?

the creditor can only insure the debtor the amount owed

for what reason may a life insurance producer backdate a life insurance policy

to avoid an increase in premium rate for the insured (up to 6 months)

what is the purpose of the washington insurance code regulation for life insurance policy disclosure?

to improve the buyers understanding of the basic features of the policy purchased

during policy delivery, insurance producers are allowed to do all of the following EXCEPT hold policies for a short period of time for analysis make an actual physical delivery obtain delivery receipts retain the policy for safekeeping

retain the policy for safekeeping

Which of the following are NOT fundable by annuities? a)Cash accumulation for any reason b)A person's retirement c)Estate liquidation d)Death benefits

D

which of the following is the best reason to purchase life insurance rather than annuities?

To create an estate

All of the following statements are correct regarding credit life insurance EXCEPT a)Benefits are paid to the borrower's beneficiary. b)The amount of insurance permissible is limited per borrower. c)Premiums are usually paid by the borrower .d)Benefits are paid to the creditor.

a

after a back injury, an insured is disabled for a year. His insurance policy carries a disability income benefit rider. Which of the following benefits will he receive?

monthly premium waiver and monthly income

the purpose of insurance regulation is to

promote the public welfare

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? a)Adhesion b)Consideration c)Good faith d)Representation

B

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? a)Waiver of Premium b)Payor Benefit c)Jumping Juvenile d)Juvenile Premium Provision

B

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? a)Term insurance only b)Permanent insurance only c)Universal life insurance only d)Any form of life insurance

D

The general powers and duties of the Insurance Department include all of the following EXCEPT a)Enacting statutes to regulate the insurance industry. b)Distributing information regarding the Department's activities. c)Enforcing the Insurance Code. d)Determining if a producer has acted in violation of the Insurance Code.

a

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

guaranteed insurability

who is required to pay the fee for an insurance producers appointment there is no appointment fee the insurance producer the commissioner the appointing insurer

the appointing insurer

in a survivorship life policy, when does the insurer pay the death benefit?

upon the last death

Which of the following is the closest term to an authorized insurer?a)Licensed b)Legal c)Admitted d)Certified

C

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive? a)$0 b)$50,000 (50% of the policy value) c)$100,000 d)$300,000 (triple the amount of policy value)

C

if an insurer goes bankrupt and cant pay claims who will make sure insured receive money?

the life and disability insurance guaranty association

Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?; a)Payments can be made in installments and as a single cash refund. b)It does not guarantee that the entire principal amount will be paid out. c)It is a life contingency option. d)The beneficiary receives the remainder of the principal amount upon the annuitant's death.

A

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to a)Purchase a single premium policy for a reduced face amount. b)Purchase a term rider to attach to the policy. c)Pay back all premiums owed plus interest. d)Receive payments for a fixed amount.

a

the two types of assignments are absolute and collateral absolute and partial complete and partial complete and proportionate

absolute and collateral

What are the two components of a universal policy? a)Separate account and policy loans b)Insurance and cash account c)Insurance and investments d)Mortality cost and interes

b

all of the following entities regulate variable life insurance except the guaranty association federal gov sec the insurance department

the guaranty association

Which of the following best describes a bail-out provision? a)It waives the surrender charge for the annuitants confined to a long-term care facility. b)It allows the owner to receive a higher interest rate at certain timeframe. c)It decreases the annuity surrender value. d)It allows the owner to surrender the annuity without a charge.

D

In insurance, an offer is usually made when a)An applicant submits an application to the insurer. b)The insurer approves the application and receives the initial premium. c)The agent hands the policy to the policyholder. d)An agent explains a policy to a potential applicant.

a

hich of the following insurance options would be considered a risk-sharing arrangement? a)Surplus lines b)Reciprocal c)Stock d)Mutual

b hen insurance is obtained through a reciprocal insurer, the insureds are sharing the risk of loss with other subscribers of that reciprocal.

The Washington Insurance Code regulation regarding policy replacement applies to which of the following types of transactions?a)Credit life insurance b)Replacement of policies by the same insurer c)Group life insurance d)Immediate annuity contract

D

Life insurance policies that have been in force for 3 years must provide for a maximum policy loan interest rate of what annual percentage? a)10% b)8% c)12% d)9%

B

All advertisements are the responsibility of the a)Soliciting agent. b)Advertising agency. c)Department of Insurance. d)Insurer.

D

which of the following reports will provide the underwriter with the information about an insurance applicants credit? agents report any federal report consumer report inspection report

consumer report

the authority granted to an agent through the agents contract is referred to as the absolute authority express authority apparent authority implied authority

express authority