Insurance Final

In the event of a licensed producer's death or disability, a temporary license may be issued to another individual for a period of:

180 days

If Anna is licensed to sell both Life/Health and Personal/Commercial insurance, how many hours of continuing education are required every 2 years?

24

A Louisiana resident life producer would be required to complete continuing education in the amount of:

24 CE hours to be completed before biennial renewal date

Upon completion of an examination of an insurer, the Louisiana Department of Insurance must send a written report no later than:

30 days after examination completion

The minimum number of members required to form a group life insurance policy is:

5

Notice of a Hearing involving a producer's misconduct must be made:

5 days in advance of hearing

A person at age 25 purchases an "Endowment at Age 65 Policy". At what age does the insurance stop?

65

When group insurance is written on a contributory basis, the minimum participation requirement is:

75%

All of the following are personal uses of life insurance EXCEPT?

: To protect a corporation from the financial loss sustained when a key employee dies

Shane is a master carpenter in business for himself. His business is probably operated as

A sole proprietorship

Which of the following would NOT be funded with a life insurance policy?

A split-dollar plan

Beth is a 25-year-old who drinks very occasionally, does not smoke, and does not have any known health problems. Beth would probably be classified by an insurer as

A standard risk

Bob purchases a policy and tells the producer he wants immediate coverage, regardless of the underwriting outcome. To meet Bob's demand, the producer is most likely to

Accept the premium and set up a temporary insurance agreement

Ken has paid only four premiums on his health insurance policy when he is hit by a car. The insurance company pays out nearly half a million dollars to cover his treatment and a lengthy stay in intensive care. This is an example of

Aleatory Contract

A policy may be issued all of the following ways EXCEPT

As an exchange policy, covering someone other than the original applicant

Which of the following statements is true about submitting the application, premium, and other forms to the insurance company?

Because coverage is effective immediately, it is not necessary to send the forms to the home office underwriter more often than weekly.

Alice decides to buy a policy. She pays the first premium and the producer issues a receipt and tells her that she is covered immediately, until she is notified that the policy is either issued or declined. What kind of receipt has Alice received?

Binding receipt

Ana wishes to purchase enough insurance to support her husband for the rest of his life if she should die prematurely, and then leave a sizeable inheritance for her children upon his death. Which method should be used to calculate the amount of insurance necessary?

Capital conservation

The initial premium payment sent with an application constitutes which part of the formation of an insurance contract?

Consideration

The premium is the insured's:

Consideration to enter into a contract

Which of the following are costs associated with death?

Doctor or hospital bills from a final illness or accident .Paying off debts such as credit cards or other loans Taxes

Ken has terminal cancer and wants to access the death benefit of his life insurance policy to pay medical expenses. How might he be able to do this?

He may access the funds either through a viatical settlement or by using the accelerated benefits provision

The type of estate transfer made while the estate owner is still alive is called a(n)

Inter vivos transfer

Bill dies without leaving a will. The distribution of her estate will be handled by a(n)

Intestate distribution

All have insurable interest in Joe's life EXCEPT?

Joe's neighbor

Which of the following is NOT likely to be contained in an MIB report?

Mr. Smith was turned down for insurance by two companies in the past year

Which of the following statements describe the best use of a producer's time when personally delivering the policy?

Mrs. Ross delivers a policy and restates the advantages of the policy and how it can be amended to meet future insurance needs.

What is considered the BEST method for determining the amount and kind of insurance a prospect should buy?

Needs Approach

Which of the following are duties of a producer upon the death of an insured?

Notify the company Contact the beneficiary Send the proof of death documents to the company

Richard applies for a policy, pays the initial premium, and receives a BINDING receipt on Friday, September 1. On Monday, September 4, the underwriting department decides not to issue the policy and places the file in a pile for notification letters to be sent out at the end of the week. On Wednesday, September 6, Richard is killed in an auto accident. On Thursday, September 7, the insurer receives the notice of claim. The insurer will

Pay the claim, because a binding receipt assures coverage until the potential insured is notified of a rejection.

Life insurance contracts contain all the following EXCEPT

Policy folder

Which of the following does NOT have an impact on insurance premium rates?

Producer certification

Which of the following statements is false?

Replacement is illegal.

If an individual decides to accept the risk associated with a loss and not purchase insurance, they are using what risk managing method?

Retaining

The type of estate transfer made after the estate owner dies is called a(n)

Testamentary transfer

Which of the following statements about paid-up additions is TRUE?

The dividends are used to purchase additional insurance protection

An insurance producer analyzed Glenda's life insurance needs, taking into account Glenda's net annual salary, her expenses, her current age, and depreciation of the dollar over time. This producer was using

The human life value approach to needs analysis

Ann quits paying premiums on her whole life policy that has been in effect for 17 years. She does not select a non-forfeiture option. What happens to the cash value in her policy?

The insurer will issue a paid-up term insurance policy with the same face value as the whole life policy with a term as long as the cash value will purchase.

An insurance producer analyzed Ken's life insurance needs, taking into account the amount of money Ken anticipated needing for his funeral and the amount of income that would be required to maintain his family's standard of living in the event of his death, including projected college costs and the costs of supporting his spouse. This producer was using

The needs approach to needs analysis

Which of the following statements about a reduced paid-up insurance option is NOT true?

The new protection is for the same amount as the original policy.

Tina has a whole life insurance policy on her life that has been in effect for 15 years. Tina and her husband review their life insurance coverage and decide that this policy, which was purchased before their marriage, is no longer necessary for their financial future. If Tina decides to stop paying the premiums, what will happen?

The policy will lapse, and Tina will be able to select a non-forfeiture option to receive value for the cash value built up in the policy.

If an applicant is rated or declined an insurance policy, the reasons for this decision will be explained to the applicant by

The producer

All of the following statements are true regarding an actuary EXCEPT?

They select the risk to be insured

Which type of risk management techniques are used when the insured buys insurance?

Transfer

Which element is not necessary for the formation of a valid contract?

Written document

Which of the following is true regarding the insured committing suicide within the first two years of the policy?

a return of paid premiums without interest will be paid

When the producer delivers the policy, all of the following should be explained EXCEPT?

actuarial calculations

The tendency for less favorable risks to purchase insurance is called:

adverse selection

Larry was declined insurance coverage based on negative information received in a consumer report. Under the Fair Credit Reporting Act, the producer should do all of the following EXCEPT?

advise Larry of the negative information found in the consumer report

How is the interest rate on a whole life policy loan determined?

amount specified in the policy

Which of the following is a risk?

an individual may need medical attention after slipping on the ice and falling

The practice of the Louisiana Life & Health Guaranty Association charging members in order to pay contractual obligations for an insolvent insurer is called?

assessment

In life insurance the "insurable interest" must exist:

at the time of application only

When additional amounts of life insurance are purchased using a Guaranteed Insurability Rider, the additional policy premiums are based on:

attained age

Several producers agree to control the market share of Cajun Mutual Insurance Company. What type of unfair trade practice is this?

boycott

The policyowner has the right to do all of the following EXCEPT?

change the conditions of the policy

What is the difference between absolute assignment and collateral assignment?

collateral assignment is partial and temporary

The option to change to another type of life insurance policy with the same insurer without evidence of insurability is called?

convertibility

What is the interest rate credited to an Universal life policy called that is guaranteed for a period of time and then may fluctuate?

current interest rate

Living benefits of life insurance include all of the following EXCEPT:

death benefit

All of the following statements are true regarding participating life insurance policies EXCEPT?

dividend options are selected by the insured

Julie's husband died 3 years ago, leaving her with two children in grade school. Julie is most likely in which income period?

family dependency period

An insurance producer must place the other party's interest above his/her own interest. This responsibility is called:

fiduciary

A clause allowing the policyowner to inspect the policy and, if the policyowner is not satisfied with the life insurance policy, return the policy for a full refund is known as:

free look

All of the following are true regarding group life insurance EXCEPT?

group life insurance can be converted only with evidence of insurability

Which of the following should NOT be taken into account when a producer makes recommendations as to the amount and type of insurance needed by an individual?

how much commission does the product offer?

The accelerated death benefit would be available in which of the following?

if the insured needs cash to pay for medical expenses due to a terminal illness

A group life underwriter would be concerned about all of the following EXCEPT?

individual health problems

Speculative risk involves all of the following EXCEPT?

insurance

The term used to describe the individual who is covered by the insurance is

insured

What is the group member called?

insured

Term life insurance provides benefits when:

insured dies during the policy period

Which is true about Survivor Life?

it is sometimes called a second to die policy

Which of the following penalties can the Louisiana Department of Insurance impose?

license revocation

Who receives the certificate of insurance in group insurance?

member

If an applicant for life insurance lies on the application regarding a material fact, it is called?

misrepresentation

Which of the following is correct about the group life conversion privilege?

must be made available for 31 days

All of the following are possible premium modes EXCEPT?

nine months

Abby, a licensed producer, is moving to Kansas. What is Abby's responsibility under the Louisiana Insurance Code?

notify the Louisiana Department of Insurance of address change within 30 days

Lee applies for a policy, pays the initial premium and receives a conditional receipt on March 14. On March 15, he passes the medical exam with flying colors. On March 16, an undiagnosed brain aneurysm bursts, killing Lee instantly. On March 17, the insurer receives the results of the medical exam, which includes no information about the aneurysm. On March 19, the insurer receives the notice of claim. The insurer will

pay the claim

All of the following are true regarding the "double indemnity" rider available as a rider to a life insurance policy EXCEPT?

pays if death is by accident or unexpected illness

Which of the following would be considered competent to enter into a contract?

person confined to a hospital due to a heart attack

A "rider" on a life insurance policy is a:

policy provision which is attached to a policy

The application of the law of large numbers enables insurers to

predict the future losses of specific individuals

Which of the following is NOT considered an illegal act for a life producer?

premium savings offered by the insurer because the premium is bank drafted

Regarding the "reinstatement provision," all of the following are true EXCEPT?

premiums will be based on the insured's attained age

Statements made on an insurance application are considered:

representations

The Louisiana Life & Health Insurance Guaranty Association:

requires all authorized insurers in the State be members of the Association

If William is a producer and lives in Texas but travels to Louisiana to solicit a policy of insurance, William must have a:

resident license for Texas and a non resident license for Louisiana

If the Louisiana Department of Insurance suspects a producer is using "Unfair Trade Practices," the first action taken is to:

send notice of a hearing

All of the following information would be included in a Notice of a Hearing by the Louisiana Department of Insurance EXCEPT?

state any precedence established by previous orders

Dividends paid by a mutual life insurance company on participating policies are:

tax exempt

Regarding a Universal Life insurance policy, all are flexible EXCEPT?

taxes

Emily has chosen to receive the payout from her husband's life insurance policy so that she will receive an income for the next 15 years. At the end of that time, the entire proceeds from the policy will have been paid out. Emily has selected

the fixed-period option

All of the following are eligible designations on a life insurance policy EXCEPT?

the insured

Jim has selected to receive only the interest from his mother's life insurance policy. When Jim dies, his children will receive the lump-sum benefit in addition to the benefit from his life insurance policy. Jim has selected

the interest-only option

Certain elements are necessary for a particular risk to be insurable. Which of the following would make a risk uninsurable?

the risk is of a catastrophic (war/nuclear) nature

The Louisiana Life & Health Guaranty Association would protect all of the following policies EXCEPT?

variable annuities

The "grace period" policy provision provides all of the following EXCEPT?

waives the past due premium if the insured dies during the grace period

Group life insurance:

written on a one year level term policy basis