Life Exam - Focus Test 2
During every 2 year period insurance agents are required to complete how many continuing education hours in ethics?
3 hours
How many days does a producer have to respond to the Commissioner's inquiry regarding a claim?
30 days
An insured has a Level Term Life Insurance policy that is guaranteed renewable and also includes a re-entry provision. The re-entry provision would allow the insured to renew the policy and
Pay a lower renewal premium by proving insurability.
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid-up
Equity indexed annuities
Seek higher returns.
An annuity owner receives the same guaranteed payment every month. What type of annuity is it?
fixed
An annuity has accumulated the cash value of $70,000, of which $30,000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive
$70,000
Which 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 up early?
Paid-up option
The National Do Not Call Registry was created to regulate
Telemarketers.
What is the purpose of a fixed-period settlement option?
To provide a guaranteed income for a certain amount of time
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
If a life insurance company uses HIV testing as a part of its underwriting when must an applicant be notified of the procedure?
prior to performance of the test
All other factors being equal the least expensive first-year premium payment is found in
Annually Renewable Term.
The full premium was submitted with the application for life insurance and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life - Option A
A graded premium life insurance policy is a modified form of
Whole life
A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will
continue to increase
A licensed agent writes an insurance policy on behalf of an insurer to which the agent is not appointed. If any commissions are to be paid to agent, within how many days must the agent be appointed to the insurer?
15
In the event of the death disablement of a licensee or other specific events the Commissioner may issue temporary license to another person to continue their business of insurance. A temporary license is issued for a period not to exceed
6 months.
An insured pays an annual premium to his insurer. In return the insurer promises to pay benefits in accordance with the terms of the contract. This is called
Consideration.
When a whole life policy is surrendered for its nonforfeiture value what is the automatic option?
Extended term
The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What should the insurer do with the application?
Return to the applicant for completion
All of the following would be events that could trigger accelerated benefits provision in a life insurance policy EXCEPT
Terminal illness of the beneficiary.
Who bears all of the investment risk in a fixed annuity?
The insurance company
Who pays the expenses of the examiners used in an examination required by the Commissioner?
The one being examined
A policy matures and pays the face amount if the insured lives to a specified date. This best describes
an endowment policy
The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called the
insuring clause
The purpose of the Fair Credit Reporting Act is to
protect consumers against the circulation of inaccurate or obsolete personal or financial information
An individual receives a lump-um inheritance. He'd like to use the money to create a lifetime income since he'll be retiring soon. He purchases an annuity and wishes to receive payments beginning in 2 months. What did he buy?
Single Premium Immediate Annuity
An agent and an applicant for a life insurance policy fill out and sign the application. However the applicant does not wish to give the agent the initial premium and no conditional receipt is issued. When will coverage begin?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
Which of the following would NOT trigger the payment of Accelerated Death Benefits?
being permanently disabled
In a replacement situation, all of the following are prohibited practices EXCEPT
borrowing 50% of a policy's cash value to fund a new life insurance contract
During the replacement process, the applicant signs that statement indicating that the replaced insurer be notified. The replacing insurer must send a written notification to the home office of the replaced insurer within how many days of the application?
5
Which of the following would be deducted from the death benefit paid to a beneficiary if a partial accelerated death benefit had been paid while the insured was still alive?
Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit
What term describes an individual domiciled and licensed as a resident agent in a state other than Oklahoma?
A nonresident agent
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated.
When comparing a Joint Life Policy to two individuals life policies of the same amount on the same insureds which condition is true?
Joint Life has a lower premium than the total of the two individual policies
#12. Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?
Standard risk is representative of the majority of people.
An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse forefeit change or surrender a life insurance policy or annuity has committed an illegal practice known as
Twisting
A stock insurer is defined as an insurer
owned by its stockholders
Which of the following is NOT a standard exclusion in life insurance policies?
disability
How is the Insurance Guaranty Association funded?
By its members - authorized insurers
Variable Life insurance is based on what kind of premium?
Level fixed
Which of the following would be required to be licensed as an insurance producer?
A salaried employee who advertizes and solicits group insurance
An insurer who transacts insurance in this state but whose articles of incorporation are registered in Canada is considered what type of insurer?
Alien
Each insurer must maintain at its principal office a complete file containing every printed published or prepared advertisement of its policies for a period of at least
4 years.
Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs?
Applicants who may require a larger death benefit in the future should buy convertible term insurance
To purchase insurance the policyowner must face the possibility of losing money or something of value in the event of loss. What is this concept called?
insurable interest
If a telemarketer wants to make an unsolicited sales call to a potential customer what is the earliest time the telemarketer can call the prospect's residence?
8 am
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
Which of the following would be TREU of both the fixed-period and fixed-amount settlement options?
Both guarantee that the principal and interest will be fully paid out
The reduction of premium option uses the dividend to reduce
next year's premium