Life and Health Primerica

An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?

$10,000, no tax consequence

Insurance producers license in another state who moved to Tennessee may apply for a resident license as long as they do so within how many days of obtaining legal residence?

90 days

If the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?

A full death benefit

A straight life policy has what type of premium?

A level annual premium for the life of the insured

The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before tax corporate dollars, and it does not meet government approval standards. The annuity plan is?

A non qualified annuity plan

If a company has a simplified employee pension plan, what type of plant is it?

A qualified plan for a small business

Which of the following, when attached to a permanent life insurance policy, allows the policy owner to customize the policy to provide an additional amount of temporary insurance of the insured, or allows amounts of temporary insurance to cover other family members?

A term rider

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

Aleatory

All of the following would be considered rebating, except

An agent misrepresents policy benefits to convince a policyowner to replace policies.

What is the primary source of information used for insurance underwriting?

Application

In order to receive a commission, a person is required to

Be licensed as an insurance producer.

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

Beneficiary

And insured pays an annual premium to his ensure. And return the insurer promises to pay benefits in accordance with the terms of the contract. This is called

Consideration

Which of the following reports will provide the underwriter with the information about an insurance applicants credit?

Consumer report

Which of the following is not typically excluded from life policies?

Death due to plane crash for a fare-paying passenger

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaging in the business of insurance?

Defamation

Which of the following will not be considered unfair discrimination by insures?

Discriminating and benefits in coverage is based on the insureds habits and lifestyle

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

Entire Contract

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

Exchange of unequal values

Which nonforfeiture option has the highest amount of insurance protection?

Extended term

What type of insurance will be use for a return of premium rider?

Increasing term

The policy owner 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 policy owner choose?

Interest only option

An unauthorized insurer is one that

Is not allowed for whatever reason to transact insurance business in the state of Tennessee

What would be an advantage to naming a contingent (or secondary) beneficiary in a life insurance policy?

It determines who receives policy benefits if the primary beneficiary is deceased.

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection

Which statement is not true regarding a straight life policy?

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

If a life insurance policy develops cash value faster than a 7 pay whole life contract, it becomes a?

Modified endowment contract

After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?

Monthly premium waiver and monthly income

Regarding the free-look provision, the insurance company?

Must allow the policyowner to return the policy for a full refund.

Which of the following documents must be provided to the policy, owner or applicant during policy replacement?

Notice Regarding Replacement

Which of the following is not true about a joint and survivor annuity benefit option?

Payments stop after the first death among the annuitants.

Which riders would not cause the death benefit to increase?

Payor benefit rider

An insured pays $1,200 annually for her life insurance premium. The insured applies this years $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?

Reduction of Premium

The ownership provision entitles the policy owner to do all of the following EXCEPT

Set premium rates

Which of the following policies would not have policy loan provisions?

Term life

And you went 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

If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination?

The insurer

The rules, regarding life policy replacement, applied to which of the following situations?

The original policy is allowed to lapse

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

In terms of parties to a contract, which of the following does not describe a competent party?

The person must have at least completed secondary education.

How are contributions to a tax-sheltered annuity treated with regards to taxation?

They are not included as income for the employee, but are taxable upon distribution.

Which of the following life insurance policies allows a policy owner to take out a loan from the policy's cash value?

Variable universal life

Informing an insurance contract when does acceptance usually occur?

When the insurer's underwriter approves coverage

If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about?

Whether an insurable interest exists between the individuals

Which of the following statements regarding the taxation of modified endowment contracts is FALSE?

Withdrawals are not taxable

All of the following are personal uses of life insurance, except

buy-sell agreement

A banker is ready to close on a customers loan. The bank is prepared to offer the loan, but only if the customer purchases an insurance policy from the bank and the amount of the loan. This is an example of

coercion

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

coercion

Two individuals are in the same risk and age class yet they are charged different rates for their insurance policies due to an insignificant factor. What is this called?

discrimination

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

Stranger originated life insurance policies are in direct opposition to the principle of?

insurable interest

Who bears all of the investment risk in a fixed annuity?

insurance company

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may

require evidence of insurability

The regulation of the insurance industry primarily rests with

state

An absolute assignment is a

transfer of all ownership rights in a policy

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?

unilateral

When the owner of a $250,000 life insurance policy died, the beneficiary decided to leave the proceeds of the policy with the insurance company and selected the interest settlement option. If at the time of withdrawal the interest paid was $11,000 the beneficiary would be required to pay income tax on?

$11,000

Before he died, and annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid up whole life policy that named his wife as primary beneficiary. Considering those contracts, how much will the annuitant's spouse receive in benefits?

$50,000

To appoint a producer, as it's agency appointing insurer must file a notice of appointment with the commissioner within how many days from the date the agency contract is executed?

15 days

How many hours of continuing education must be completed in ethics each licensing period?

3

All documents used in a solicitation of insurance must be maintained by an insurer for at least

3 years

How soon from the submission of a notice of claim, must an insurer acknowledge the receipt of the notice?

30 days

A policy summary must include all the following, except

Guaranteed dividend rate

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a

Joint life annuity

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

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.

The policy owner 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.

Which of the following 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 protects consumers against the circulation of inaccurate or obsolete personal or financial information?

Fair Credit Reporting Act

The automatic premium loan provision is activated at the end of the

Grace Period

All of the following statements are true regarding installments for a fixed. Annuity settlement option, except.

It is a life contingency option.

Which of the following is TRUE regarding the accumulation period of an annuity?

It is a period during which the payments into the annuity grow tax deferred.

Which of the following would provide an underwriter with information concerning an applicants health history?

Medical Information Bureau

An insured has a continuous premium whole life. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

Paid-up option

Which of the following products provides income for a specified period of years or for life, and protects a person against outliving their money?

an annuity

What is the purpose of a conditional receipt?

intended to provide coverage on a date prior to the policy issue

The premium of a survivorship life policy compared with that of a joint life policy would be?

lower