Insurance

Which is a true statement about reinsurance:

The insurer has a contract with another insurer to transfer part of the liability for policies it has written

While an insurer is paying the premium for a life insurance policy under the waiver of premium rider:

The policy remains in full force in every respect

Mike has named only a primary beneficiary on his life policy. At the time of Mike's death, the primary beneficiary is already dead. What happens to the proceeds from his policy?

They are paid to the insured's estate

Regarding Utmost Good Faith, what would be the best choice?

Two parties are truthful and sincere while transferring info

The requirements for one to sell funeral and burial policies except:

be licensed as a fire and causality broker/agent

What is Loss Exposure?

potential for incurring a loss

What is the best description of coinsurance?

rate credit

Which of these may not be incorporated:

reciprocal or inter-insurance exchange

The kind of services provided in funeral contracts include all of the following except:

refrigeration

An insurance company cannot refuse to renew or cancel a policy. However, it could change the premiums of a class of insured's. What type of policy is this?

renewable term

Any transaction that involves purchasing a life insurance policy and terminating an existing policy is known as:

replacement

The factors used in determining life insurance premiums include all of the following except:

reserves

If children are born or adopted after a family policy is issued:

term insurance will automatically be provided for the child under the same policy

An organization will cease to exist as an entity eligible to hold a license for all of the following reasons except:

termination of a key employee

In a funeral insurance contract the Funeral Director may be changed at any time by:

the insured

Who is the beneficiary on a funeral insurance policy?

the person named in the policy to receive the benefits of the policy

Carrier misrepresented a policy to her client and she can be jailed for 30 days: (true/false?)

true

It is to the advantage of the insured that companies use the Law of Large Numbers to losses (true/false?)

true

The Insurance Company is required to disclose to a client what info it is gathering for a market research even though it is partly used for insurance purposes: (true/false?)

true

The amount a person can receive under a claim is limited to the extent of the person's insurable insurance (true/false?)

true

The survivorship (time) clause deals with what will happen if the primary beneficiary clearly outlives the insured but dies only a few days later (true/false?)

true

Uniform policy provisions allow an insurer to reword the provisions as long as the new wording is not more restrictive or less favorable to insured's or beneficiaries (true/false?)

true

Kathy has a life policy on her own life. She has named her daughter as a irrevocable beneficiary. She would need her daughter's permission to take out a loan on the policy. (true/false?)

trueCHECK

If the payment a person is receiving is determined by taking the number of accumulation units times the value of the separate account, what type of contract is this?

variable annuity

Rocky has an annuity for which he has paid $50,000 in after tax dollars over the last 20 years. At 65 he will receive $4,000/year annual income based on life expectancy of 25 years which will yield $100,000. The amount of taxable income will be:

$2,000

Through the years Jane has purchased 10 life policies on her husband. Upon his death, what is the total amount Jane can collect on her husband's life from the Guarantee Association?

$250,000

Which of the following is not a correct statement about the children's coverage under a family protection policy?

A conversion privilege exists for the children but only if proof of insurability is shown

Which is the best definition of a funeral contract?

A life policy that agrees for valuable consideration to embalm or dispose of or provide funds for the embalming of any person living at the time the policy was issued.

What must be printed on all funeral policies?

A statement that any person purchasing a funeral insurance contract may be subject to additional assessments

If the age of the insured has been misstated in the policy the insurer will:

Adjust the benefit payable under the policy to reflect the correct age of the insured

Funeral insurance policies may only be issued by:

Admitted insurers issuing policies on a legal reserve basis

What is the grace period in a funeral insurance policy?

After 3 months premiums have been paid the insured is entitled to no less than 30 days.

A provision stating that during the life of the contract a funeral insurance policy is no longer contestable:

After the policy has been in force two years from the date of issue or from the date of any reinstatement. Exceptions applied.

A return of a premium rider:

Allows for a portion of the premium to be refunded to the insured if he is permanently disabled

The cost of living rider:

Allows the insured to increase the death benefit-usually tied to the consumer price index-for an additional premium

A period of time in which a deferred annuity builds it proceeds tax deferred is referred to as:

An accumulation period

If a person purchases CD (Certificate of Deposit) for $10,000 or an annuity for $10,000 and both earn the same rate of interest:

At the end of 10 years the annuity will have a greater value because of tax-deferred growth

What is excluded in Tort Law?

Breach of contract/crime

If the insured has a policy which includes waiver of premium benefits and a disability rider which of the following is not true?

Cash values are not affected by a disability

Tort Law is what kind of law?

Contract law

Funeral insurance contracts may pay benefits lower than the face amount of the policy for any of the reasons except:

Death by natural causes

A Life Analyst in his written disclosure to his client must include: a.) his fees for his service b.) info stating that his client can receive info from the insurers c.) a statement that he can receive commissions if he is a licensed agent d.) all answers are correct

d.) all answers are correct

The California Code of Regulations (CRR) is comprised of the rules and regulations approved by the Insurance Commissioner to set Code administrative standards for: a.) health insurance b.) surplus lines c.) motor vehicle insurance d.) all answers are correct

d.) all answers are correct

Trevor, who is 21 yrs old, wants to buy a life insurance policy. Which of the following would have the lowest premium?

five-year term

What kind of policy includes cremation

funeral policies

If waiver of premium is added to a policy the additional premium:

has no effect on the cash values

The rights of an irrevocable beneficiary differ from those of a revocable beneficiary. Which of these apply to an irrevocable beneficiary?

he has vested interest in the proceeds of the policy

The max amount an Insurance Company will pay in a loss is known as the:

limit of liability

Services provided by a funeral contact include all of the following except:

location of burial site

A fire and Causality Agent/Broker wishes to appoint a Life Licensee to sell Life Insurance:

He cannot appoint a life licensee

What is a true statement regarding premiums?

In an insurer pays semi-annual premiums it will be more than an annual premium

In a funeral insurance policy no insurer may issue or deliver policies that:

Incorporate the constitution, by-laws or rules of any organization whatsoever

Kat has a retirement plan that is a qualified plan. What is correct?

Individual contributions are tax deferred until retirement age at which tie kT will be in a lower tax bracket

Which of the following is correct about changing an irrevocable beneficiary?

It can be changed only upon the written consent of the beneficiary

A life annuity with a 10-year period certain:

It is guaranteed to pay for a minimum of 120 months or a maximum of the life of the annuitant

Which of the following is correct about a Key Person Policy?

It is insurance that a company can purchase itself if a worker (key-employee) should die

When proceeds of a life insurance policy are made payable to the insured's estate which of the following is true?

It is subject to administrative delays and expenses

Under which of the following could a person withdraw his funds prior to retirement and not incur a tax penalty?

Profit sharing plan

Lynn receives a large bonus from her company. She purchases an annuity that will start paying her $400/month immediately. This is:

Single premium immediate annuity

Which would not be contestable after two years in a funeral insurance contract?

Terminal illness

If proof of rendered services is not provided within 30 days, the Insurer has one year after the insured's death to make payment to any of the following except:

The Funeral Director

Additional assessments may be charged to the insured in a funeral contract:

Only when the contract has a provision at the time of issue and displayed in the contract

Which provision in a policy allows the insured to buy more insurance at specified intervals with no proof of insurability?

Guaranteed Insurability rider

An insurer organized under the laws of the State of California is a:

Domestic insurer

A life plan where premiums increase annually a period of time and then level off would be?

Graded life

All are ordinary insurance except:

Group Insurance

The best definition of a funeral contract is: a.) all answers are correct b.) a life insurance policy that for valuable consideration provides funds in whole or in part for the disposal of the remains of a person covered under the policy c.) a life insurance policy that for valuable consideration agrees to embalm or dispose of any person at the time the policy was issued d.) a life insurance contract that for valuable consideration provides funds for the embalming of the remains of an individual covered under the policy

a.) all answers are correct

Which is a correct statement about reinsurance? a.) no answers are correct b.) a policy lapses and later it is re-instated c.) life insurers re-insure d.) a company ceded all interest in a policy to another insurer

a.) no answers are correct

Any person purchasing a funeral insurance contract may be subject to:

additional assessments

What type of insurers can issue funeral insurance policies?

admitted insurers

The guaranteed insurability rider:

allows the insured to purchase additional coverage at certain levels without proof of insurability

A representation in an insurance contract qualifies as which of the following:

an implied warranty

What is true about a Payor Rider? a.) if the premium payor dies, the insurance company will waive premiums until the child reaches a given age, usually 21-25 b.) it waves premium only of the payor dies c.) all answers are correct d.) no answers are correct

c.) all answers are correct

The services provided by a funeral contract include all of the following except:

choice of funeral director

All of the following would be considered unfair trade practices, except:

committing an act of discrimination whether it be fair or unfair

A funeral insurance contract would provide benefits for:

cremation