Life insurance exam
Who pays insurance consultants?
Applicants
An IRA contribution can be made from which of the following ?
Cash
Which of the following is not true of the agents implied authority?
It is specifically stated in the contract
Concerning Juvenile Life insurance which of the following statements is INCORRECT
Juvenile Life is classified as any life insurance purchased by a minor.
Which of the following would be a violation of life policy illustration regulation in this state?
Providing a customer with an incomplete illustration
All of the following are true regarding the waiver of cost insurance rider EXCEPT
The rider expires when the insured reaches age 60
If someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should it be?
permanent
Which of the following is true regarding joint life annuity?
The payment stops at the first death
All the following information needs to be included on the application for life insurance EXCEPT
Health insurance with other insurers
Which of the following best describes the difference between joint life and joint and survivor annuity?
In joint life option, the benefits stop after the first death
An insurance company receives an application with some information missing and issues the policy anyway. What is this called?
Waiver
In which of the following situations would the facility of payment provision become available?
The named beneficiary is deceased
What happens if a deferred annuity is surrendered before the annuitization period?
The owner will receive the surrender value of the annuity.
Under an extended term nonforfeiture option, the policy cash value is converted to
The sane face amount as in the whole life policy
A distribution from an employee sponsored retirement plan or from an IRA is eligible for a tax free rollover. If it's reinvested in an IRA within
60 days
An insured purchases a non participating whole life policy. This policy includes all of the following except
Dividends
Which of the following is a correct statement about annuities?
Fixed annuities do not provide protection against inflation
What type of annuity activity will cause immediate taxation of the interest earned?
Surrendering the annuity for cash
All of the following are general requirements of a qualified plan except
The plan must be temporary
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium
All of the following are true regarding the federal Fair credit reporting act EXCEPT
Reports may be sent to anyone who requests one
If the annuitant dies before the annuity start date, which of the following is true?
The interest is taxable
Within how many days after the receipt of the proceeds may the owner rescind the life settlement contract?
15 days
Guaranteeing future dividends is considered to be unfair or deceptive act known as
Misrepresentation
Which of the following types of agent authority is also called perceived authority
Apparent
To purchase insurance the policy owner must face the possibility of loosing money or something of value in the event of loss. What is the concept called
Insurable interest
During the accumulation phase of a fixed annuity the annuitants interest rate is based on a minimum rate specified in the contract or the current interest rate whichever is
Lower
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 test
An insured decides to surrender his whole life policy. The cash value at surrender what part of the surrender value would be income taxable?
The difference between the premiums paid and the cash value.
In a life insurance application, all the following signatures will be required EXCEPT
The home office underwriter
All of the following are true of annually renewable term insurance EXCEPT
proof of insurability must be provided at each renewal
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
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?
Unilateral -insured is not legally bound to anything
During partial withdrawal from a universal life policy which portion will be taxed?
Interest
Which of the following insurance principles states the ambiguities in a policy will always be in favor of the insured?
Adhesion
All of the following statements are correct regarding credit life insurance EXCEPT
Benefits are paid to the borrower's beneficiary
When the insured selects the extended term nonforfeiture option the cash value will be used to purchase term insurance with what face amount?
Equal to the original policy for as long as the cash values will purchase
Which of the following best describes annually renewable term insurance?
It is level term insurance
When an insured terminates membership in the insured group, the insured can convert to
Whole life without proof of insurability
What type of interest rate is guaranteed in universal life policies ?
Contract interest rate
Which of the following term refers to the non-taxable portion of each annuity benefit payment?
Cost base
Which of the following methods of calculating the amount of life insurance needed takes into account the insureds wages, years until retirement and inflation?
Human life value approach
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
Implied
With Adjustable life, the owner can change all the following EXCEPT
The insured
Which of the following are generally not considered when underwriting group insurance?
The insureds médica history
An insured intentionally did not disclose a material fact on an application for insurance, what is this called?
Concealment
A whole life policy is surrendered for reduced paid up policy. The cash value in the new policy will
Continue to increase
Which of the following is true regarding a market value adjusted annuity?
The owner is guaranteed a fixed interest rate for a specific period of time
Which nonforfeiture option provides coverage for the longest period of time?
Reduced Paid-Up
What method do insurers use to protect themselves against catastrophic losses?
Reinsurance
The waiver of cost insurance rider is found in what type of insurance?
Universal life
Which of the following would be true of both fixed period and fixed amount settlement options?
Both guarantee the principal and interest will be fully paid out
The guaranteed insurability rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following except
Purchase of a new home
If an annuity has a guaranteed minimum interest rate this means
The interest rate will never drop below the guaranteed minimum
Not all losses are insurable and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following except
The loss may be intentional
An insurance agent who represents multiple companies on a nonexclusive basis earns commission on personal sales and overrides of the their business is considered?
Independent Agency System
All of the following are true statements regarding the accumulation at interest option except
The interest is not taxable since it remains inside the insurance policy
Which of the following is NOT an allowable 1035 exchange?
A whole life insurance policy is exchanged for a term insurance policy
All of the following statements are true regarding Ordinary Straight life policy EXCEPT
It does not have a guaranteed death benefit
Which of the following would not be considered an unfair claims settlement practice
Refusing to pay claims following an investigation
Applicants for a license must furnish satisfactory evidence of all the following to the commissioner except
State residency
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?
Extended term
Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT
Other insurance coverages
According to the common disaster clause, of the insured and primary beneficiary are killed in the same accident. The following will be assumed
The primary beneficiary does before the insured