Insurance exam

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of

twisting

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash surrender

A provision in a life insurance policy that provides for the early payment of some portion of the face value should the insured suffer from terminal illness is called

Accelerated benefit provision

An insured misstates her age at the time the life insurance application is taken. This misstatement may result in

Adjustment in the amount of death benefit

The death protection component of Universal Life Insurance is always

Annually renewable term

Which if the following is the basic source of information used by the company in the rush selection process

Application

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

What does "level" refer to in level term insurance?

Face amount

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False advertisement

Which of the following policy components contains the company's promise to pay

Insuring Clause

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose

Interest only

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of terminal illness, how will that affect the payable death benefit from the policy

It will be smaller

Which of the following is not true regard the needs approach method of determining the value of an individuals life

Need is predicted using the number of years until the insureds retirement

A prospective insured recieves a conditional receipt but dies before the policy is issued. The insurer will

Pay the policy proceeds only if it would have issued the policy

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 in his application. What will the company do

Pay the reduced benefit

An employee is insured under her employers group life plan. If she terminates her group coverage, which of the following statements is incorrect?

The insured may choose to convert to term or permanent individual coverage

The paid up addition option uses the dividend

To purchase a smaller amount of insurance as the original policy

The paid up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy

What kind of policy allows withdrawals or partial surrenders?

Universal Life

I'm a survivorship life policy, when does the insurer pay the death benefit

Upon the last death

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?

apparent

The term "illustration" in a life insurance policy refers to

A presentation of nonguaranteed elements of a policy.

Which of the following is not true regarding a Straight Life Policy

Its premium steadily decreases over time, in response to its growing cash value

The life insurance solicitation regulation was promulgated to go the following

Provide adequate information to consumers regarding relative cost of insurance products

Which nonforfeiture option provides coverage for the longest period of time?

Reduced Paid-Up

All of the following employees may use a 403(b) plan for their retirement EXCEPT

The CEO of a private corporation

The law that protects consumers against the circulation of inaccurate or obsolete information is known as

The Fair Credit Reporting Act

An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this?

The Medical Information Bureau

Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT

The loss may be intentional.

Which of the following is called second to die

Survivorship

Which of the following entities established the Do Not Call Registry

Federal Trade Commission

In a direct rollover, how is the money transferred from one plan to the new one?

From trustee to trustee

Under the Fair Credit Reporting Act, if the consumer challenges the correctness of the information contained in his or her report, the reporting agency must

Respond to the consumer's complaint

Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?

Return the application to the applicant for completion

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all the following except

The insureds age of death

Which of the following are generally not considered when underwriting group insurance?

The insureds medical history

Which is true about nonforfeiture values

They are required by state law to be included in the policy

Which of the following products requires a securities license

Variable annually

How long must producers keep record of insurance transactions under their license

3 years

How long must producers keep records of insurance transactions under the license

3 years

If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur?

The change must be reported to the commissioner

What type of insurance would be used for a Return of Premium Rider

Increasing Term

An insured has a life insurance policy from a participating company and receives quarterly dividends. He instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured chose was

Paid up additions

The Life Insurance Solicitation Regulation was promulgated I do the following

Provide adequate information to consumers regarding of insurance products

Another name for a substandard risk classification is

Rated

When insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called

Cost of Living Rider

Which of the following explains the policyowner tights to change beneficiaries, choose options and receive proceeds of a policy

Owner's Rights

All of the following are characteristics of group insurance except

Premiums are determined by age, sex, and occupation of each individual certificate holder

If an IRA annuitant dies after the annuity has been paid up, what effect will this have on the annuitants estate?

The entire value of the contributions and benefit will be included

Which of the following is true about defined benefit plan

High-salaried employees with only a few years until retirement would benefit the most.

Which of the following is correct concerning the taxation of premiums in a key person life insurance policy

Premiums are not tax deductible as a business expense.

A corporation is the owner and the beneficiary of the key person life policy. If the corporation collects the policy benefit, then

The benefit is received tax free

An employee is insured under the employers group life plan. If she terminated her group coverage, which of the following statements is incorrect

The insured may choose to convert to term or permanent individual coverage

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive

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?

Any form of life insurance

What is the proposal used in selling of life insurance that depicts the non guaranteed elements of the policy over a period of time?

Illustration

What is not true about the 10 day free look period in a Life Insurance policy

It begins when the policy is delivered

What is the purpose of the Seven-Pay test

It determines if the insurance policy is an EMC

What is true regarding the annuity period

It may last for the lifetime of the annuitant

The license of forgetful frank had lapsed. How long from the due date of the renewal fee, may Frank be reinstated without having to retake a course or exam?

12 months

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained

3 days

What must happen when an individual policy or annuity has been personally delivered to the policyowner

The policy owner must sign a delivery receipt

What must happen when an individual policy or annuity has been personally delivered to the policy owner

The policy owner must sign a reliever receipt

All of the following are requirements for life insurance illustrations except

They must be part of the contract.

An insurance company sells an insurance policy over the phone in response to a TV ad. Which of the following best describes this act

direct response marketing

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

discrimination

The annuitant died before receiving $200 monthly for 10 years from $30,000 installment refund annuity. His wife, the beneficiary, will now receive the same monthly benefit under her payments total

$6000