Insurance study exam Q's
An insurance producer just sold an insurance policy to his sister. What kind of business is this?
Controlled
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?
$100,000
The Director must examine insurers at least
3 years
It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?
Sexual orientation
The interest earned on policy dividends is
Taxable
it a licensee wants to appeal an order issued by the Director against him, what option does the licensee have?
Appeal the court to the Superior court
If a licensee wants to appeal an order issued by the Director against him, what option does the licensee have?
Appeal the order to the superior court
What is the basic source of information used by the company in the risk selection process?
Application
When an insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting information?
Application
In order to get a nonresident license in this state, a producer must
Apply and pay a fee to a nonresident state that reciprocates
How does an individual become the Insurance Director in the state Alaska?
Appointed by the commissioner of Commerce, community, and Economic Development
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered an
Authorized insurer
All of the following are prerequisites to becoming an insurance producer in this state EXCEPT
Be registered with the Federal Securities and Exchange Commission.
All of the following are personal uses of life insurance EXCEPT
Buy-sell agreement
A tax-sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which insurance principle has the insurer violated?
Consideration
contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classitied as
Contracts of adhesion
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?
Cost of Living Rider
A key person insurance policy can pay for which of the following?
Costs of training a replacement
The term "fixed" in a fixed annuity refers to all of the following EXCEPT
Death benefit
When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of
Defamation
What is an example of an unfair claims settlement practice?
Failure to promptly settle a claim when liability has been clearly established
What is not an insurer but an organization formed to provide insurance be fits for members of an affiliated lodge or religious organization?
Fraternal benefit society
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates. without proving insurability. the policy includes a
Guaranteed insurability rider
Who bears all of the investment risk in a fixed annuity?
insurance company
Two attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose
HR-10 (Keogh Plan)
A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?
If the father is disabled for more than 6 months
An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?
If the primary beneficiary predeceases the insured
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
Illegal
Which of the following does NOT apoly to variable contracts?
Insurers do not have to provide any financial information or history of the company.
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
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
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as
Rebating
All of the following could be considered rebates if offered to an insur in the sale of insurance EXCEPT
Dividends from a mutual insurer.
For how long do The Director must examine and insured's in Alaska?
Every 3 Years
The LEAST expensive first-year premium is found in which of the following policies?
Annually renewable term
Any person investigating or settling a claim must inform the claimant in writing if the claim was accepted or denied within how many working days after all evidence of loss is received?
15 days
Each viatical settlement contract entered into in this State must provide the viator with an unconditional right to rescind the contract for at least how many days?
15 days
How many days are insurers given to investigate or settle life insurance claims?
30 days
How long must a standard insurance transaction remain on file?
5 years
Insurance transaction records must be maintained for at least
5 years
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an
A Interest-sensitive Whole Life.
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?
Adhesion A contract of adhesion is prepared by only the insurer; the insured's only option is to accept or reject the policy as it is written.
Which of the following statements is TRUE concerning the Accidental Death Rider?
It will pay double or triple the face amount
Variable Whole Life insurance is based on what type of premium?
Level fixed
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
Death benefits pavable to a beneficiary under a lite insurance policy are generally
Not subject to income taxation by the Federal Government.
Which of the following documents must be provided to the policyowner or applicant during policy replacement?
Notice Regarding Replacement
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
What option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy un early?
Paid-up option
What describes the specific information about a policy?
Policy summary
Who can request changes in premium payments, face value, loans, and policy plans?
Policyowner
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it's in the best interest of the client
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it's in the best interest of the client.
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating
The policyowner pays for her life insurance annually. Until now she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?
Reduction of premium
The Federal Fair Credit Reporting Act
Regulates consumer reports
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
SEC registration
It an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
Settlement option.
All of the following are considered unfair trade practices in the business of insurance EXCEPT
Sharing commissions
Which type of life insurance policy generates immediate cash value?
Single Premium
Which applicant would NOT qualify for a Keosh Plan?
Someone who works 400 hours per vear
What is an example of a producer being involved in an unfair trade practice of rebating?
Telling a client that his first premium will be waived if he purchases the insurance policy today
To what organization must all admitted insurers belong?
The Guaranty Association
Which statement is false about about equity index annuities?
The annuitant receives a fixed amount of return.
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability.
When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneticiary died in the same car accident, and it was impossible to determine who died first. Who would receive the death benefit?
The insured's contingent beneficiary
Which of the following may NOT be included in an insurance company's advertisement?
The policies are covered by a State Guaranty Assocation
All of the following are true about variable products EXCEPT
The premiums are invested in the insurer's general account.
What best defines target premium in a universal life policy?
The recommended amount to keep the policy in force throughout its lifetime
Which of the following statements is true regarding requirements for applicants for an insurance license?
They must provide information about their personal history and experience
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
Which type of misrepresentation persuades an insured. to their detriment. to cancel. lapse, or switch policies from one to another?
Twisting
which type of life insurance policy allows the policyowner to pay more on less than the planned premium?
Universal life
What is true regarding the convertibility option under a term life insurance policy
Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
