Excel Solutions

If the beneficiary dies from the same accident as the insured individual, the insurer will proceed as if the insured outlived the beneficiary the beneficiary outlived the insured both the insured and beneficiary died at the same time the estate was listed as beneficiary

the insured outlived the beneficiary

An example of rebating would be

A producer who shares commissions with a client

Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?

Accumulation at Interest Option

Of the following dividend options, which of these is taxable? Reduction of premium One year term Paid-up additions Accumulation at interest

Accumulation at interest

Holding premium funds for timely submission to the insurer is an example of Theft Acting in fiduciary capacity Misappropriation of funds Commingling

Acting in fiduciary capacity

An underwriter's primary responsibility to an insurer is to protect against

Adverse selection

Which of the following is considered to be the. When the accumulated value and annuity is paid out? Annuitization phase Accumulation phase Principal phase Period certain phase

Annuitization phase

How are annuities given favorable tax treatment?

Gains are taxed at distribution

How are annuities given favorable tax treatment? Gains are tax deductible Gains are tax exempt at distribution Gains are taxed at distribution Gains are converted to tax credits

Gains are taxed at distribution

An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? Incontestable period Probation period Reinstatement period Grace period

Grace period

A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) Guaranteed term rider Guaranteed insurability rider Accelerated benefit rider Cost of living rider

Guaranteed insurability rider

An annuitant is guaranteed to NOT outlive their benefits with a(n) Survivorship clause Guaranteed lifetime withdrawal benefit Period certain provision Guaranteed minimum accumulation benefit

Guaranteed lifetime withdrawal benefit

Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?

Guaranteed lifetime withdrawal benefit

Which of the following is considered to be an event or condition that increases the probability of an insurance loss?

Hazard

Which approach predicts a person's earning potential and determines how much of that would be devoted to dependents.

Human life value approach

Which of the following provisions protects a Pennsylvania policyowner from an innocent mistake on the application over two years ago? Entire contract provision Nonforfeiture provision Spendthrift provision Incontestability provision

Incontestability provision

Which of the following protects a policyowner from a misrepresentation caused by an innocent mistake? Reinstatement clause Entire contract clause Incontestable clause Nonforfeiture clause

Incontestable clause

When a producer offers something of value in return for the purchase of an insurance policy, which prohibited sales practice has been committed? Defamation Inducement Twisting Misrepresentation

Inducement

The principle of insurable interest in regards to a life insurance contract is accurately described in which statement? An agent establishes insurable interest An individual does not have insurable interest on his or her own life Insurable interest only pertains to business arrangements Insurable interest can be based on love and affection of individuals by blood or law

Insurable interest can be based on love and affection of individuals by blood or law

Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary? Interest only Dividends only Extended interest Fixed period

Interest only

A non-admitted insurer

Is not afforded protection by the guaranty fund

What happens to interest earned if the annuitant dies before the payout start date?

It is taxable

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Life Income

Which type of annuity guarantees a stated number of income payments, whether or not the new one is still alive to receive them?

Life annuity certain

Defamation can be BEST described as Making a statement that is falsely or maliciously critical of the financial condition of an insurer Replacing an existing policy with another by using misrepresentation Offering anything of value not see it in the insurance contract to secure an order of business Using threats as a means of obstructing competition

Making a statement that is falsely or maliciously critical of the financial condition of an insurer

All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT

National Association of Insurance Underwriters

A non-participating policy will

Not pay dividends

How do interest earnings accumulate in a deferred annuity?

On a tax-deferred basis

What is an insurer required to do when faced with an error made under the misstatement of age provision? Cancel the policy Pay age-corrected benefits Pay full benefits as stated in the policy Bill the policyowner for back premiums

Pay age-corrected benefits

During the accumulation period, who can surrender an annuity? Payor Annuitant Beneficiary Policyowner

Policyowner

How are survivorship life insurance policies helpful in estate planning? Provide Funds to help fund retirement Provide funds to help pay taxes Provide funds for funeral expenses Provide tax deductions for premium payments

Provide funds to help pay taxes

Dana is an employee who deposits a percentage of her income into her individual annuity. Her company also contributes a percentage into a separate company pension plan. What kind of annuity is this considered? Qualified retirement annuity Key employee retirement annuity Executive compensation plan Keogh annuity plan

Qualified retirement annuity

All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT

Reduction of Premium

A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? Reduction of premium dividend option Extended term option Paid-up option Cash dividend option

Reduction of premium dividend option

According to Pennsylvania law, group life insurance conversion privileges must NOT allow a new policy to be issued Allow a time period to convert group life coverage to an individual life policy Allow a rate increase Require evidence of insurability

Require evidence of insurability

Which of the following enables of life policy to be replaced with another life policy and results in the postponement of the tax consequence?

Section 1035 exchange

In an insurance contract, the applicant's "consideration" is the

Statements made in the application and the premium

A producer does NOT have a fiduciary responsibility to

The Pennsylvania guaranty association

Which of these statements regarding the annuitant is CORRECT? The contract can only be signed by the annuitant The annuitant is the only individual who can surrender the contract The annuitant must be the beneficiary The annuitants life expectancy determines the annuity payments

The annuitant's life expectancy determines the annuity payments

What does a life insurance policy guarantee to the stated beneficiary upon the death of the insured?

a specified amount of money

An individual most likely will have an insurable interest in insuring a persons life if

an economic interest exists for the continuance of the insured's life

Fixed period settlement options are considered to be a form of a(n) Cash loan value Variable life policy Annuity Endowment

annuity

The deeds and actions of a producer indicate what kind of authority? Express Apparent Implied Conditional

apparent

Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT

beneficiary

Under a group life policy, the insurer will issue an individual _____ to the policyowner for delivery to each person insured. policy certificate application rider

certificate

Level premium permanent insurance accumulates a reserve that will eventually equal the face amount of the policy pay a dividend to the policyowner require the policyowner to make periodic withdrawals become larger than the face amount

equal the face amount of the policy

Under a non-qualified annuity, interest is taxed after the Deposits have been made Death of an annuitant Distribution of payments Exclusion ratio has been calculated

exclusion ratio has been calculated

Which of the following is present when an applicant stands to lose value if the insured dies? Insurability Offer and acceptance Insurable interest Consideration

insurable interest

Who assumes the investment risk with a fixed annuity contract? The owner The annuitant The insurer The beneficiary

insurer

Which contract element is insurable interest a component of?

legal purpose

Which type of annuity stops all payments upon the death of the annuitant? Life annuity Period certain annuity Cash refund annuity Joint and survivor annuity

life annuity

A life insurance policy that has premiums fully paid up within a stated time period is called

limited payment insurance

A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n) insuring clause payor provision reinstatement provision nonforfeiture provision

nonforfeiture provision

How are contributions made to a Roth IRA handled for tax purposes? Fully tax deductible Not tax deductible Partially tax deductible Conditionally tax deductible

not tax deductible

In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST remit all past-due premiums within the grace period provide evidence of insurability to the insurer resubmit a new life insurance application provide a valid reason for the lapse

provide evidence of insurability to the insurer

An annuity is primarily used to provide retirement income disability income long-term care benefits death benefits

retirement income

A whole life insurance policy accumulates cash value that becomes The policy loan value which of the insured may borrow against The death benefit The source of funding for administration fees A source of funding a term rider to the policy

the policy loan value which the insured may borrow against

Loans obtained by a policyowner against the cash value of a life insurance policy are treated as taxable income would not be treated as taxable income are limited by the face amount of the policy would be subject to a Federal estate tax

would not be treated as taxable income

The free look period provided in a life insurance policy is usually

10 days

A rollover from a Traditional IRA to another IRA MUST be done within ___ days to avoid tax consequences. 15 30 60 90

60

Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application? A waiver of premium A replacement form A good health statement An exclusion

A good health statement

How soon can the benefit payments begin with a deferred annuity?

A minimum of 12 months after date of purchase

A producer's license CANNOT be revoked without

A hearing given to the producer

Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider? Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value

Can be converted to permanent coverage without evidence of insurability

Which of the following is a requirement for ANY change in an insurance application? Change must be initialed by the agent Change must be initialed by the applicant Change must be approved by the insurer Change must be notorized

Change must be initialed by the applicant

A provision that allows a policy owner to temporarily give up ownership rights to secure a loan is called a(n)

Collateral assignment

In Pennsylvania, who is responsible for continuing education course content approval Pennsylvania department of education Naic Commissioner NIPR

Commissioner

Which of the following would be considered an underwriting duty of an agent? Requesting medical information from the medical information bureau Completing all applications and collecting initial premiums Excepting or declining an application Assigning a risk classification

Completing all applications and collecting initial premiums

Intentional withholding of material facts that would affect and insurance policies validity is called a(n)

Concealment

Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity? Payments cease 5 years after the annuitant's death During periods of inflation, annuitants will experience an increase in purchasing power of their payments During periods of inflation, annuitants will experience a decrease in purchasing power of their payments Payment amounts can be unpredictable from month to month

During periods of inflation, annuitants will experience a decrease in purchasing power of their payments

Which of these statements concerning Traditional IRAs is CORRECT?

Earnings are taxable when withdrawn

What is the name of the provision which states that a copy of the application must be attached to the policy when issued

Entire Contract

Craig purchased a life insurance policy to enable his heirs to pay estate taxes. What is this called? Estate conservation Liquidity maintenance Survivor fund Human value protection

Estate conservation

Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called estate funding capital withholding capital gains estate conservation

Estate conservation

Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true? The policy automatically converts to whole life after the 10-year period The face amount will remain constant and the premium will increase over the 10-year period The premium will remain constant and the face amount will increase over the 10-year period The face amount and premium will remain constant over the 10-year period

The face amount and premium will remain constant over the 10-year period

Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true? The policy may be paid up early by using accumulated cash values The policy my be paid up early by using policy dividends The policy's premiums will increase after 20 years The policy's cash values steadily decrease after 20 years

The policy may be paid up early by using policy dividends

All of the following riders can increase the death benefit amount EXCEPT

Waiver of Premium

All of these statements concerning whole life insurance or false EXCEPT

When a whole life policy surrendered, income taxes may be owed