LIFE INS 2

The amount of the distribution is reduced by the amount of a 20% withholding tax.

A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?

Guaranteed and Current.

A Universal Life insurance policy has two types of interest rates that are called

Joint and survivor

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?

Pay the policy proceeds only if it would have issued the policy.

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

The payable premium amount steadily declines throughout the duration of the contract.

All of the following are true regarding a decreasing term policy EXCEPT

Rebating.

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

Common Disaster

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries

Reduction of Premium

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

$300

At the time of initial licensing, what fee must a viatical settlement provider pay?

Predicted needs of the family after the insured's death.

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

Term

Children's riders attached to whole life policies are usually issued as what type of insurance?

$3,000

If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?

Reasonable expectations

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?

Jumping juvenile policy

If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?

Settlement option.

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

15 days prior to group policy expiration.

Insurers are required to give the insured converting to an individual policy notice of their conversion privilege

Increasing

Return of Premium term life policy is written as what type of term coverage?

One-year term option.

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

As of the application date

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?

10 days

To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days?

$10,000

What is the civil penalty for violating a cease and desist order of the Commissioner?

$2,500

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

Issue the policy anyway and pay the face value to the beneficiary.

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

The insured's contingent beneficiary

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 beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?

Life income with period certain

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Commissioner

Which of the following authorities is authorized to issue a temporary insurance producer's license?

To minimize the insured's level of liability in the event of loss

Which of the following is NOT a goal of risk retention?

Dividends are not taxable.

Which of the following is true regarding taxation of dividends in participating policies?

The cost of coverage is based on the ratio of men and women in the group.

Which of the following statements about group life is correct?

It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.

Which of the following statements about the reinstatement provision is true?

The creditors have rights to the proceeds if they can show evidence of valid assignment.

Which of the following statements is true concerning the creditors of the deceased insured?

Single Life

Which settlement option provides a single beneficiary with income for the rest of his/her life?