Life and health insurance 2.1

An insured decides to surrender his $ 100,000 Whole Life policy . The premiums paid into the policy added up to $ 15,000 . At policy surrender , the cash surrender value was $ 18,000 . What part of the surrender value would be income taxable ?

$ 3.000

. If a person has been found liable for a civil penalty in hearing , that ruling can be entered as a judgment and enforced after

120 days

An insured owns a $ 50,000 whole life policy . At age 47 , the insured decides to cancel his policy and exercise the extended term option for the policy's cash value , which is currently $ 20.000 . What would be the face amount of the new term policy ?

550.000

is the cause of loss insured against in an insurance policy .

A peril

An insurance broker's license may be issued to

A person , firm or corporation

Which of the following individuals must pass the written examination to be licensed as an insurance agent ?

A producer previously licensed in New Jersey who is applying for a New York license 120 days after becoming a resident of this state

In insurance , an offer is usually made when

An applicant submits an application to the insurer

The death protection component of Universal Life Insurance is always

Annually Renewable Term

A tornado that destroys property would be an example of which of the following ?

Aperil

What is the time period called during which the surviving spouse of the insured does not receive Social Security income benefits ?

Blackout period

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

Cash option

#. All of the following are duties and responsibilities of producers at the time of application EXCEPT

Change any incorrect statement on the application by personally Initialing next to the corrected statement

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 best describes an insurance company that has been formed under the laws of this state ?

Domestic

If an annuitant dies before annuitization occurs , what will the beneficiary receive ?

Either the amount paid into the plan or the cash value of the plan , whichever is the greater amount

The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the

Entire contract

1 . Which of the following best describes the aleatory nature of an insurance contract ?

Exchange of unequal values

Which of the following is used to determine the annuity amounts that are not taxable ?

Exclusion ratio

The Superintendent may refuse to issue a license in all of the following situations EXCEPT

Is from another state

Which of the following best describes the MIB ?

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance

Variable Whole Life Insurance is based on what type of premium ?

Level fixed

Which of the following is NOT true regarding policy loans ?

Money borrowed from the cash value is taxable

What is the major difference between a stock company and a mutual company ?

Ownership

Based on Human Life Value Approach , which of the following is NOT used to calculate an individual's life value ?

Predicted needs of the family after the insured's death

. Which of the following insurance options would be considered a risk - sharing arrangement ?

Reciprocal

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

Reduced paid - up

. All of the following are types of term policies based on what happens to the face amount during the policy term EXCEPT

Renewable

Who has the authority to regulate the issuance and sale of variable contracts ?

The Superintendent

The annuitant dies while the annuity is still in the accumulation stage . Which of the following is TRUE ?

The beneficiary will receive the greater of the money paid into the annuity or the cash value

In comparison to consumer reports , which of the following describes a unique characteristic of investigative consumer reports ?

The customer's associates , friends , and neighbors provide the report's data

In order to qualify for a certificate of authority , every person , firm , association , corporation or joint - stock company must meet all of the following requirements EXCEPT

The entity must be part of the New York Labor Union

. An insured purchased a 10 - year level term life policy that is guaranteed renewable and convertible . What happens at the end of the 10 - year term ?

The insured may renew the policy for another 10 years , but at a higher premium rate

All of the following are characteristics of a group life insurance plan EXCEPT

There is a requirement to prove insurability on the part of the participants .

. Which of the following statements is TRUE concerning Irrevocable beneficiaries ?

They can be changed only with the written consent of that beneficiary

Which of the following CANNOT be included along with illustrations used to sell life Insurance ?

Vanishing premium information

In forming an insurance contract , when does acceptance usually occur ?

Wheryan insurer's underwriter approves coverage

Are insurance company underwriters allowed to discriminate ?

Yes , but not infairly

A cost of living rider adjusts the face amount of a policy to maintain the relationship of the face amount and increases in the

cost of living

The cash option allows an insurer to send the policyholder an annual , nontaxable

dividend check

Variable Whole Life insurance is a level fixed premium investment

investment - based product

Who can make a fully deductible contribution to a traditional IRA ?

investment An individual not covered by an employer - sponsored plan who has earned Income

expenses . expenses , inflation , amount of time until retirement , and The Human Life Value Approach to determining the value of an individual's life requires the calculation of probable future earnings of the insured , which involves wages , the time value of money . Predicted needs of the family after the insured's death are used in the

needs approach

The Superintendent may refuse to issue any insurance agent's license if the proposed licensee is found to be not trustworthy and competent , or has not complied with any

prerequisites