Life Insurance Final 3
When an annuity is written, whose life expectancy is taken into account? A. Owner B. Annuitant C. Beneficiary D. Life expectancy is not a factor when writing an annuity.
B. Annuitant
How many policies are necessary to cover a cross purchase (buy/sell agreement) between 3 people? A. 1 B. 2 C. 3 D. 6
D. 6
A widow can begin to receive social security retirement benefits at age: A. 59 1/2 B. 60 C. 62 D. 65
D. 65
An insurance producer is prohibited from all of the following except: A. Producer may influence the client one way or another. B. A producer may be named a beneficiary in the client's will. C. A producer may obtain a personal loan from a client. D. A producer may be named as the owner or beneficiary in a life policy for a client who is a relative.
D. A producer may be named as the owner or beneficiary in a life policy for a client who is a relative.
Which act is prohibited regarding a nonadmitted insurer? A. Acting as an agent for an admitted insurer. B. Advertising a nonadmitted insurer in this state. C. Aiding a nonadmitted insurer. D. Transacting business for a nonadmitted insurer in this state.
A. Acting as an agent for an admitted insurer.
An applicant may be denied a license without a hearing for all of the following reasons except: A. Applicant was convicted of a misdemeanor DUI. B. Applicant was convicted of a non-insurance felony. C. Applicant was denied an insurance license within the last 5 years. D. Applicant's previous insurance license was suspended within the last 5 years.
A. Applicant was convicted of a misdemeanor DUI.
Which of the following is NOT a type of authority? A. Enforced B. Express C. Implied D. Apparent
A. Enforced
Medicare supplement insurance plans offer all the following core benefits except: A. Part A coninsurance amount which is 20% B. First 3 pints of blood each year. C. Approved hospital costs for the copayments for lifetime reserve days 91-150. D. Approved hospital costs for the copayments for days 61-90
A. Part A coninsurance amount which is 20%
What form of annuity, classified according to the duration of time the annuity pays out, provides payments to an annuitant from a specific date and for the rest of the annuitant's life? A. Pure life annuity B. Temporary annuity C. Installment refund annuity D. Joint and survivor annuity
A. Pure life annuity
Jasper has a $50,000 20-year pay-life policy which he will let lapse at the end of the fourth year. The nonforfeiture option that would provide coverage for the longest period of time would be A. Reduced paid-up. B. Extended term. C. Paid-up option. D. Paid-up additions
A. Reduced paid-up.
All of the following qualify for Medi-Cal except: A. Those who are partially blind B. Pregnant women C. Kids in foster care who are under 21 D. Low income under age 21
A. Those who are partially blind
A party wishing to buy an annuity that will advance with economic and market conditions should buy a A. Variable annuity. B. Deferred annuity. C. Straight life annuity. D. Joint and survivor annuity.
A. Variable annuity.
The law firm of Dewey, Cheatum, and Howe purchased a buy-sell agreement policy on each of its partners in 1990. In 2001, William Howe left to start a new practice; however, the firm continued to pay the premiums on the policy as written. In 2003, Mr. Howe had a heart attack and died. The partners of the firm filed a claim on the policy to collect the death benefit despite the fact that Mr. Howe was NOT part of the firm or its leadership. The insurer A. Will pay the death claim to the beneficiary for this policy as written sinice insurable interest existed at the time of application. B. Can legally sue the firm for insurance fraud and WILL NOT pay a claim due since the insurable interest no longer exists. C. Will pay the death claim to the beneficiary since the premiums were current although according to contract law, insurable interest MUST exist at the time of claim. D. Will refund the premiums
A. Will pay the death claim to the beneficiary for this policy as written sinice insurable interest existed at the time of application.
Honus is diagnosed with an illness that will require long term treatment and medication. Honus's life insurance policy includes the Accelerated Benefits Rider. Honus applied for money from this policy to pay for his treatment. What must the insurer provide Honus at the time of the first payment? A. An explanation of how the payment affects the policy's death benefit. B. A benefit payment notice indicating the dollar amount of the payment and the dollar amount of remaining death benefit and values. C. An explanation of how the benefit effects accumulated cash values. D. An explanation of how much of the policy's death benefit can be accelerated.
B. A benefit payment notice indicating the dollar amount of the payment and the dollar amount of remaining death benefit and values.
Each of the following below is considered a legal person except: A. The estate of a dead person. B. A married 17 year old. C. A corporation. D. An unmarried 20 year old.
B. A married 17 year old.
Which of the following is not considered a loss under errors and omissions? A. An agent accidentally records an incorrect answer on an application. B. An agent steals funds from customers. C. An agent explains health or disability insurance to a client and does not revealing the fact that the policy has a deductible, coinsurance, and co-payments, as well as an exclusion for a preexisting medical condition. D. The agents accepts a check from a client and fails to send it to the insurer in a timely manner.
B. An agent steals funds from customers.
The risk management technique used to prevent a specific loss by not exposing yourself to that activity is called: A. Sharing. B. Avoidance. C. Transfer. D. Reduction.
B. Avoidance.
What explains how the insurance code is to be administered? A. CIC B. CCR C. Unfair Practices Article D. Code of Administrative
B. CCR
All of the following addresses that are changed must be submitted to the DOI except: A. Business address B. Garaging address C. Mailing address D. Residence address
B. Garaging address
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the A. Misstatement of Age clause. B. Incontestability clause. C. Reinstatement clause. D. Insuring clause.
B. Incontestability clause.
Graded-Premium Whole Life policy premiums typically_____ for a period of _____ years before leveling out to a consistent amount. A. Increase; 10-15 B. Increase; 5-10 C. Decrease; 10-15 D. Decrease; 5-10
B. Increase; 5-10
Who is a person who transacts all classes of insurance except life on behalf of another person? A. Insurance solicitor B. Insurance broker C. Insurance agent D. Life Analyst.
B. Insurance broker
On January 2, Jason is involved in a motorcycle accident and pays $5,000 in hospitalization bills after his insurer pays the coverage stated in the contract. The first $1,000 of medical expenses he pays will also serve to satisfy his deductible. What provision allows Jason to do this? A. Major Accident Provision B. Integrated deductible C. Accident Deductible Provision D. Deductible Wavier
B. Integrated deductible
All of the following are DIFFERENCES between fixed and variable annuities EXCEPT A. A variable annuity does not guarantee a minimum income payment from the annuity during the annuity period. B. Only the variable annuity guarantees both mortality an expenses. C. The payments an annuitant invests into the variable annuity are invested in the insurer's separate account, not the general account. D. Under federal law, a variable annuity is considered a security and is regulated by the Securities Exchange Commission (SEC) in addition to state insurance regulations.
B. Only the variable annuity guarantees both mortality an expenses.
Regarding licensed producers involved in a transaction, the following must be included except: A. Identity of all producers involved. B. Outline of coverage proposed and accepted. C. Commissions paid and the formula used. D. All licensed persons receiving anything of value as a result of the transaction.
B. Outline of coverage proposed and accepted.
Bill has a Rolex watch that he wears on special occasions. When Bill is not wearing the watch, it is kept in his safety deposit box at the bank. This would be an example of: A. Risk transfer. B. Risk reduction. C. Risk retention. D. Risk avoidance.
B. Risk reduction.
Which option provides a single beneficiary with income for the rest of his/her life? A. Single Beneficiary Option B. Single Life Option C. One Beneficiary Option D. Joint Life Option
B. Single Life Option
Which of the following in not true about Worker's Comp? A. Employers are mandated to cover medical care and provide wage replacment for injured workers. B. This is a at fault law in that any injury, illness, or disease from work is the employer's liability. C. All of CA workers compensation laws are state laws. D. A self insuance bond or insurance is mandatory for CA emplyers.
B. This is a at fault law in that any injury, illness, or disease from work is the employer's liability.
Annual dollar limits on essential health benefits will not be permitted for plan years starting after January 1, A. 2010 B. 2013 C. 2014 D. 2011
C. 2014
If an agent is to make a sales presentation to a senior in his or her home, how much advance notice is required? A. 7 days B. 48 hours C. 24 hours D. 12 hours
C. 24 hours
Because it takes more time to evaluate, how many days is the free look for a replacement policy for a 60 year old person? A. 90 days B. 60 days C. 30 days D. 10 days
C. 30 days
The number of credits required for fully insured status is: A. 10 B. 20 C. 40 D. 60
C. 40
Which of the following describes the period of time during which an annuitant makes interest-amassing payments into an annuity? A. Building Phase B. Loading Phase C. Accumulation Peiod D. Premium Building
C. Accumulation Peiod
All the following are responsibilities of the commissioner except: A. Enforcing the insurance law. B. Issuing regulations that establish how the DOI will enforce the law. C. Changing the law in relation to enforcement. D. Overseeing the Department of Insurance.
C. Changing the law in relation to enforcement.
If an annuitant dies before annuitization occurs, what will the beneficiary receive? A. Amount paid into the plan B. Cash value of the plan C. Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount D. Either the amount paid into the plan or the cash value of the plan, whichever is the lesser amount
C. Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
What type of group rating uses the actual experience of the group as a factor in developing the rates to be charged? A. Community rating B. Individual rating C. Experience rating D. District rating
C. Experience rating
What is the penalty for transacting insurance without a valid insurance license? A. Fine of $100,000. B. Prison sentence up to 5 years and $25,000 fine. C. Jail time up to 1 year and $50,000 fine. D. Fine of $75,000 for 1st offense, $100,000 for second offense.
C. Jail time up to 1 year and $50,000 fine.
Who offers to advise people about life or disability insurance for a fee? A. Life agent B. MGA C. Life and Disability Analyst D. Life insurance Advisor
C. Life and Disability Analyst
All of the following are reason for 24 Hour Coverage except: A. Lower amount of administrative paperwork. B. Lower overal cost of insurance C. Lower overal claims. D. Make the usage of insurance easier.
C. Lower overal claims.
Which of the following is false? A. Concealment or false statements about material facts may allow the injured party to rescind the contract, even at a later date. B. Materiality is determined not by the event but by the influence of the facts on the party to whom communication is due, in form their estimate of the disadvantages of the proposed contract. C. Materiality of concealment is judged different than materiality of a misrepresentation. D. An immaterial misrepresentation does not void coverage.
C. Materiality of concealment is judged different than materiality of a misrepresentation.
All of the following would qualify for a Keogh plan except: A. Self employed using a defined contribution plan. B. Partnership. C. Owners of an incorporated business. D. Self employed using a defined benefit plan.
C. Owners of an incorporated business.
Jessica pays $1,200 annually for her life insurance premium. This year, she has accumulated $300 worth of dividends, which she applies to her next premium, thus reducing it to $900. What option has she chosen? A. Cash option B. Flexible Premium C. Reduction of Premium D. Accumulation at Interest
C. Reduction of Premium
Which of the following groups would most likely be covered under a blanket accident policy? A. Factory workers at the automobile assembly plant. B. Indepentent contractors who work for a general contractor. C. Students at a public school. D. Office workers for a retail business.
C. Students at a public school.
All of the following benefits are provided by workers compensation except: A. Dependent children income benefits. B. Disability income benefits. C. Surviving spouses medical expenses. D. Rehabilitation benefits.
C. Surviving spouses medical expenses.
An insurer is helping a married couple determine their children's needs, assets, and liabilities, in the event that one or both of the spouses should die. What is the term most closely associated with this? A. Survivorship Insurance B. Juvenile Protection Provision C. Survivor Protection D. Survivor Planning
C. Survivor Protection
All the following statements about a group life insurance policy are false except: A. Participants are not issued certificates of insurance that show proof of insurance. B. Each participant is in complete control over the policy. C. The employer is the master policy holder. D. The participants are each issued a master contract.
C. The employer is the master policy holder.
All of the following are specifications of a insurance policy except: A. Parties between whom the contract is made B. The risks insured against C. The financial rating of the insurer D. The period during which the insurance is to continue.
C. The financial rating of the insurer
What is the difference between the authority of an agent and the authority of a life solicitor? A. An agent represents a company B. A solicitor cannot be employed by more than one agent C. There is no such thing as a life solicitor D. An agent cannot act like a solicitor.
C. There is no such thing as a life solicitor
What regulates the trade practices in the insurance business? A. CIC B. CCR C. Unfair Practices Article D. Code of Administrative
C. Unfair Practices Article
When would life insurance proceeds be subject to federal or state income taxes? A. Never. Death benefits are always income tax free. B. When the insured and primary beneficiary die at the same time. C. When the policy is transferred for money. D. When the policy contains cash value.
C. When the policy is transferred for money.
A defined contribution plan is a qualified retirement plan in which: A. contributions are not defined, but the ultimate benefit to be paid out is. B. contributions are defined as well as the the ultimate benefit. C. contributions are defined but the ultimate benefit to be paid is not. D. contributions are not defined nor is the ultimate benefit.
C. contributions are defined but the ultimate benefit to be paid is not.
An agent replaces a long-term care insurance policy for one of her clients. The new policy materially improves the insured's benefits, but the annual premium increases from $2,500 to $3,500. The replacing insurer may pay the agent the full first-year commission rate on what amount? A. $2,500 B. $3,500 C. $0 D. $1,000
D. $1,000
What is the maximum penalty for willfully violating the unfair trade act? A. $1,000 B. $5,000 C. $5,000 and loss of license. D. $10,000
D. $10,000
How many years must a life agent maintain their records from the date of actual delivery? A. 12 months. B. 24 months. C. 3 years D. 5 years
D. 5 years
Which of the following are legal methods for delivering a policy? A. First Class Mail B. Personal delivery by the agent C. Pick-up by policyholder only D. A and B
D. A and B
Which of the following are not regulatory requirements for dependents under group life plans? A. Insurance amounts cannot be more than 100% of the employee's life insurance. B. 75% of the insured employees must elect to cover one or more dependents for insurance to be extended to dependents. C. A dependent may be covered up to age 25 if dependent is handicapped. D. A dependent may be covered up to age 18 for normal circumstances.
D. A dependent may be covered up to age 18 for normal circumstances.
Fixed annuities provide which of the following that a variable annuity would not? A. Equal monthly payments for life B. Minimum guaranteed rate of interest C. Protection against market losses D. All of the above
D. All of the above
25-year -old Ira wants to take measures now to make sure he will maintain a steady, guaranteed income after retirement. What would best help Ira do this? A. Life insurance B. Stock investments C. High-interest savings account D. An annuity
D. An annuity
An insurable interest must exist _____ for an insurance contract to be vaild in the State of California. A. At any time prior to issuance of a policy on the beneficiary. B. At the time a claim for indemnification is made. C. At the time the first premium is paid. D. At the time of application for a policy on the insured.
D. At the time of application for a policy on the insured.
With respect to a Variable Annuity, when are the number of annuity units determined? A. At the time the annuity is purchased B. At the time the contract is issued C. Annually, on the first day of the anniversary date of the contract D. At the time of the initial payout
D. At the time of the initial payout
What kind of deductible is applied between basic coverage and major medical coverage? A. Bridging deductible B. Middle deductible C. Interval deductible D. Corridor deductible
D. Corridor deductible
Loretta finds that she is no longer able to pay premiums on her $50,000 whole life policy, but feels she still needs that amount of coverage to protect her family. Which of the nonforfeiture options would allow her to do this? A. Fixed amount B. Reduced paid-up C. Paid-up option D. Extended term
D. Extended term
Alan and shawn, twin brothers, are starting a new business. They know it will take serveral years to build the business to the point where they can pay off their start-up debts. What type of insurance would be most affordable and still provide a death benefit should one of them die? A. Indivdual Endowment policies B. Whole Life policies C. Ordinary Life policies D. Joint Life policy
D. Joint Life policy
Kayla's husband died in a plane crash. She needs a new source of funding that will help her pay for their son's daycare. Which of the following would be the best source? A. State Education Waiver B. Viatical settlement C. Estate conservation D. Life insurance proceeds
D. Life insurance proceeds
A life income option is a: A. Dividend option. B. Nonforfeiture option. C. Rider option. D. Settlement option.
D. Settlement option.
The following are IRS requirements for qualified retirement plans except: A. The plan must be permanent. B. The plan must be approved by the IRS. C. The plan must be written and communicated to employees. D. The plan must have a vesting requirement just for the officers and stockholders.
D. The plan must have a vesting requirement just for the officers and stockholders.
Why would you purchase life insurance rather than annuities? A. To liquidate a sum of money over a period of years. B. To create regular income payments. C. To liquidate a sum of money over a lifetime. D. To create an estate.
D. To create an estate.
When a homeowner purchases insurance on his home, what risk management technique is he or she practicing? A. Avoidance B. Sharing C. Retention D. Transfer
D. Transfer
Which state was the first state to adobt a worker's comp law? A. California B. Texas C. New York D. Wisconsin
D. Wisconsin
Vision care insurance is generally needed to cover all of the following EXCEPT A. costs of prescription lenses B. eye examinations C. costs of contact lenses D. injury to the eye
D. injury to the eye
Before he died, Frank 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, May, as primary beneficiary. Considering both contracts, how much will May receive in benefits? A. $50,000 B. $62,000 C. $75,000 D. Nothing
A. $50,000
Which one of the following is not a maximum claim amount under the CLHIGA program? A. 75% of the contractual obligation for each policy. B. $250,000 in life insurance death benefits. C. $100,000 in net cash values for life insurance. D. $100,000 in present value of annuity benefits.
A. 75% of the contractual obligation for each policy.
Which of the following is not true? A. A surplus lines insurer is licensed and writes standard coverages in the state of CA. B. An alien insurer is an insurance company incorporated outside of the USA. C. A domestic insurer is an insurance company that is incorportated in CA. D. A foreign insurer is an insurance company that is incorportated in another state.
A. A surplus lines insurer is licensed and writes standard coverages in the state of CA. An excess and surplus lines insurer writes standard coverages in a state where the insurer is unlicensed.
A pretext interview is any of the following except: A. An agent refuses to identify himself at the beginning of the interview. B. An agent misrepresents the purpose of the interview. C. An agent pretends to represent someone he is not actually representing. D. An agent pretends to be someone he is not.
A. An agent refuses to identify himself at the beginning of the interview.
Each of the following terms is an important characteristic of a major medical policy, except: A. Capitation B. Setting maximum amounts C. Coinsurance D. Deductible
A. Capitation
Which of the following is not a class of insurance? A. Casualty B. Fire C. Marine D. Auto
A. Casualty
It is illegal for an insurance company to do all of the following after issuing a policy except: A. Change the policy B. Rescind the policy C. Cancel the policy D. Reduce the policy
A. Change the policy
Who would not be considered a dependent of employees who have group life insurance? A. Children attending college up to 23 yrs old. B. Children not in school up to 20 yrs old. C. Children married up to age 20. D. A Child who are handicapped and age 26.
A. Children attending college up to 23 yrs old.
A rider that may be attached to a life insurance policy tol adjust the face amount based upon a specific index, such as the Consumer Price Index, is called: A. Cost of living rider. B. Accelerated benefit rider. C. Cost of goods rider. D. Cost of capitol rider.
A. Cost of living rider.
The following are all acceptable methods of delivering a life policy to the owner except: A. First class mail. B. Personal delivery with a signed and dated written receipt of delivery. C. Certified Mail with a signature of delivery. D. Registered Mail with a signature of delivery.
A. First class mail.
What do annuities provide for annuitants? A. Guaranteed income B. Savings distributed to beneficiaries when the owner dies C. Long-term consulting for investments D. A way to accumulate nontaxable interest in a savings account.
A. Guaranteed income Annuities provide a source of guaranteed income for the annuitants, without having to worry about relying upon investments for income. An annuity provides income by the liquidation of the principal sum.
All the following are disadvantages of 24 Hour Coverage except: A. It's difficult to determine which policy pays for what claims. B. Government regulation C. Possibility of overlapping coverage. D. It's difficult to determine deductibles.
A. It's difficult to determine which policy pays for what claims.
The annuitant can also be the A. Owner. B. Beneficiary. C. Delegated authority. D. Trust designated to receve funds.
A. Owner.
Which of the following allows the dividend to be used to pay up policy premiums sooner than originally planned? A. Paid-up option B. Paid-up addition C. Paid-up insurance D. Acceleration of endowment
A. Paid-up option
Which of the following are true statements? A. Records must be kept on file for a period of 5 years following the policy delivery. B. Records must be kept on file for a period of 2 years following acceptance date. C. Records must be kept on file for a period of 2 year following binder date. D. Records must be kept on file for a period of 3 year following the application date.
A. Records must be kept on file for a period of 5 years following the policy delivery.
Which of the following is not true regarding the California State Fund? A. SCIF is administered and regulated by the federal government. B. SCIF cannot have a monopoly on the business. C. SCIF competes with insurance companies for a share of the worker's comp business. D. Any employer with at least one employee can purchase coverage through SCIF.
A. SCIF is administered and regulated by the federal government.
Which of the following insurance policies would provide the greatest amount of protection for a temporary period during which the insured has limited financial resources? A. Term B. Whole life C. Annuity D. Endowment
A. Term
A corporation is the owner and beneficiary of the key person disability policy. If the corporation collects the policy benefit, then A. The amount received is tax-free. B. The amount is subject to the exclusionary rule. C. IRS has no jurisdiction. D. The amount received is taxable income.
A. The amount received is tax-free.
At the time of annuitization of a varible annuity, which of the following cannot fluctuate? A. The number of annuity units B. The performance of the investment C. The monthly benefit D. Both the performance of the investment and the monthly benefit
A. The number of annuity units
All the following characteristics of group life policies are correct except: A. Underwriting is based on the group's age and average health condition. B. Individuals do not have to show evidence of insurability. C. To be eligible as a group, at least 2 people must be organized as a group. D. Organization of the group must be for a purpose other than purchasing life insurance.
A. Underwriting is based on the group's age and average health condition.
When compared to other tiered qualified health plans (QHPs) the catastrophic plan available through an exchange has: A. higher out-of-pocket expenses for the insured B. coverage of fewer essential health benefits C. higher actuarial plan values D. higher plan premiums
A. higher out-of-pocket expenses for the insured
Every qualified plan offered through an exchange is categorized according to a metal level: bronze, silver, gold, or platinum. This metal tier/level is a reflection of: A. the percentage of essential health benefits costs the plan will pay B. the level of risk the plan's enrollees represent to the insurer: the lower the metal level, the higher the risk C. the number of essential health benefit categories the plan covers D. the quality of the care that will be delivered through the plan's provider networks
A. the percentage of essential health benefits costs the plan will pay
The purpose of the Long-Term Care Insurance Personal Worksheet is primarily to determine A. whether an applicant's purchase of LTC insurance meets the insurer's suitability standards B. whether an applicant for LTC insurance meets the insurer's underwriting standards C. an agent's annual commissions for the sale of LTC insurance D. whether an insurance company is financially sound
A. whether an applicant's purchase of LTC insurance meets the insurer's suitability standards
How many days are required to give a terminated employee notice to convert his or her life policy? A. 10 B. 15 C. 25 D. 31
B. 15
Which of the following statements about 401 K plans is incorrect? A. 401K's are defined contribution plans. B. 401K's are known as a cash or deferred account or CODA. C. Deferred contribution are made on a pre tax basis. D. 401k's are voluntary, before tax contributions by employees.
B. 401K's are known as a cash or deferred account or CODA.
What qualified retirement plan is a defined contribution plan, pre tax contributions that uses annuities and mutual funds only for investment options? A. 401 K B. 403 B C. 457 Plan D. ESOP
B. 403 B
A false statement that could have caused the insurer to reject the application is called: A. A warranty B. A material fact C. A misrepresenation D. Fraud
B. A material fact
If an agent collects the initial premium and gives a conditional receipt, coverage is effective: A. At the time the underwriting department receives the application. B. At the time of the medical exam. C. At the time the application was postmarked by the postoffice. D. At the time of the sales presentation.
B. At the time of the medical exam.
A group policy that provides accident and health coverage on a group of persons being transported by a common carrier, without naming the insured persons individually, is called A. Certificated of Coverage policy. B. Blanket Policy. C. Activity Policy. D. Specified disease policy.
B. Blanket Policy.
What is the primary criterion that qualifies an individual for premium tax credits through an exchange? A. Age B. Income C. employment status D. lack of insurability for plans sold outside the marketplace/exchange insurance market
B. Income
Which of the following determines the interest rates paid to the owner of a fixed annuity? A. Amount stipulated in the contract B. Investment performance of the company C. Investment performance of the insured D. Statewide predetermined annual interest levels
B. Investment performance of the company
Which of the following is the best statement about brokers selling insurance? A. It is illegal for a broker to accept both a fee from the client and a commission from the insurer. B. It could be unethical for a broker to accept both a fee from the client and a commission from the insurer. C. It is not unethical for a broker to accept both a fee from the client and a commission from the insurer. D. It is unlawful for a broker to accept both a fee from the client and a commission from the insurer.
B. It could be unethical for a broker to accept both a fee from the client and a commission from the insurer.
All the following are requirements of an agent who replaces a life policy, except: A. Present a 'notice regarding replacement'. B. Leave with the applicant a copy of the application. C. Submit to the replacing insurer a copy of the 'notice regarding replacement'. D. The notice must be signed by both applicant and agent.
B. Leave with the applicant a copy of the application.
What is a Capital Sum Benefit on disability policies? A. Pays a lump sum benefit after 2 years of being disabled. B. Pays a lump sum benefit for certain specified loss. C. Pays a lump sum benefit to the beneficiaries when an insured dies. D. Pays a lump sum benefit instead of a monthly benefit after the waiting period.
B. Pays a lump sum benefit for certain specified loss.
Which of the following is not a major difference between social and private insurance? A. Social participation is both automatic and mandatory for all eligible citizens. B. Private insurance benefits are mandated by law. C. Social insurance doesn`t try to be equally fair to everyone. D. The government is a monopoly regarding insurance.
B. Private insurance benefits are mandated by law.
Advertisements for term life insurance directed to people 55 or older shall do all except: A. Prominently distinguish basic life benefits from supplemental benefits. B. Prominently disclose the commission the agent will be receiving. C. Prominently disclose any condition affecting the policy holders continued insurability. D. Prominently disclose any change in premium resulting from the aging of the insured.
B. Prominently disclose the commission the agent will be receiving.
A co-partnership may continue conducting business after a change as long as they meet all of the following conditions, except: A. Application for registration by a general partner. B. Return the old license with signatures to the commissioner. C. At least one person must continue to exercise the agency powers. D. Application must be filed within 30 days with paid fees.
B. Return the old license with signatures to the commissioner.
Work comp insurance applies to all of the following that occur at work while the policy is in force, except? A. Bodily injury B. Sickness C. Disease D. Death
B. Sickness
Which of the following statement is true concerning the creditors of a deceased insured? A. The creditors of the deceased insured have no rights to the proceeds of life insurance under any circumstances. B. The creditors have rights to the proceeds if they can show evidence of vaild assignment. C. Anyone may put a lien against the proceeds of a life insurance policy. D. None of the above is true.
B. The creditors have rights to the proceeds if they can show evidence of vaild assignment.
The accumulation phase or period A. occurs immediately when the purchaser pays a lump sum and wants payout to begin immediately B. permits the principal to grow by tax-deferred interest C. is only used in life insurance D. is when accumulated units are converted to a fixed number and now the value of the units vary
B. permits the principal to grow by tax-deferred interest
Each surplus line broker shall file with the commissioner a written report within how many days: A. 10 B. 30 C. 60 D. 100
C. 60
What disability rider serves to provide increases in coverage for specific time periods? A. Future Option Increase B. Cost of Living Rider C. Automatic Increase Rider D. Benefit Extender Rider
C. Automatic Increase Rider
What limits the amount that a policyowner may borrow from a whole life insurance policy? A. Face amount B. Cash value C. Cash value plus the loan interest D. None of the above
C. Cash value plus the loan interest
An employer who wants to self insure instead of buying mandatory insurance the must do all except: A. Demonstrate stable cash flow. B. Apply to the state Department of Industrial Relations (DIR) C. Demonstrate a payroll of $100,000 or more. D. Pay claims out of their own pocket.
C. Demonstrate a payroll of $100,000 or more. No payroll amount or certain number of employees are required to be self insured.
Medical expense insurance does not include: A. Major medical policies B. Hospital programs C. Disability income policies D. Miscellaneous medical insurance
C. Disability income policies
A life and disability insurance analyst must be all of the following except: A. California resident B. Age 18 or older. C. Employee of the insurer. D. Must have a good business and general reputation.
C. Employee of the insurer.
Which of the following statements best characterizes the reason for purchasing a variable annuity, as opposed to a fixed annuity? A. It allows the annuitant a discount on the cost of the annuity. B. It allows the annuitant to pay off the annuity at different rates throughout the term of the contract. C. It allows the annuitant to receive an income adjusted to variations in the cost of living. D. Most insurance companies do not sell fixed annuities.
C. It allows the annuitant to receive an income adjusted to variations in the cost of living.
Which is false concerning the accelerated death benefit for chronic illness rider? A. Only permanent conditions will qualify for claim as the condition must be likely to last the rest of the insured's life to qualify for the benefit. B. No special continuing education requirement to sell this product C. It requires an A&H license to sell D. It may not be marketed in any manner as long-term care coverage
C. It requires an A&H license to sell
Jose owns and operates a tailoring shop. Jose acts as the chief tailor, supervises the other employees, keeps the books and pays the bills. Before he retires, he would like to sell the business. What type of policy could he purchase that would pay the cost of operating the business should Jose suffer a premature death? A. Residual Benefit policy B. Business Overhead Expense policy C. Key Person policy D. Extra Expense policy
C. Key Person policy A key person policy would pay the ongoing expenses and cover the cost of a new hire should Jose suffer a premature death.
What is the term used when a person sells his assets as a way to gain money? A. Commerce B. Transfer C. Liquidation D. Buy-Sell
C. Liquidation
If an annuitant selects the straight life annuity settlement option, in order to receive all of the money out of the contract, it would be necessary to A. Name a beneficiary. B. Do nothing, the money is guaranteed. C. Live at least to his life expectancy. D. Die before his life expectancy.
C. Live at least to his life expectancy.
What type of individual disability insurance would offer an insured a guaranteed future premium? A. Renewability policy B. Guaranteed Renewable policy C. Noncancellable policy D. All disability policies have this option.
C. Noncancellable policy
The beneficiary of a Key Person Life Insurance policy is chosen by the A. Corporation. B. Partners. C. Owner. D. Key Person.
C. Owner.
Which of the following is usually true of a participating life insurance policy? A. Pays dividends to stockholders. B. Assesses premiums against stockholders. C. Pays divdends to policyowners. D. May be converted to a term life policy.
C. Pays divdends to policyowners.
Which one of the following is not an acceptable form of delivery of a life application? A. Registered Mail B. Certified Mail C. Personal faxed copy with a confirmation receipt. D. First Class Mail.
C. Personal faxed copy with a confirmation receipt.
According to CA law, which of the following is not a reason why a party may rescind a contract ? A. Unintentional concealment is made. B. The other party intentionally hides material info. C. Representation is false on a non-material point. D. Violation of a material warranty.
C. Representation is false on a non-material point.
All of the following classifications are discriminatory except: A. Religion B. Ancestry C. Sex D. Mental impairments
C. Sex
All of the following reasons are true with regard to the insurance commissioner denial of fictitious names except: A. The word underwriter may not be used in the name. B. The name is already in use. C. The name is similar with another already in use but will not interfere. D. Names that give impressions that are not true.
C. The name is similar with another already in use but will not interfere.
The following are the only exceptions to the free insurance prohibition, except: A. Insurance provided with newspaper subscriptions. B. Insurance that guarantees the performance of a product. C. The purchase of bank shares. D. Services provide by an attorney.
C. The purchase of bank shares.
All the following are true regarding modified endowment contracts except: A. MEC's are life policies that have had cumulative premium payments made in the first 7 year over code. B. Any money put into a life policy above the 7 year limit is taxed as full income. C. This prevents people from putting large sums of money into a life policy. D. TAMRA was created to discourage the sale fo life contracts as investement and tax shelters.
C. This prevents people from putting large sums of money into a life policy.
Which of the following statements regarding annuity taxation is FALSE? A. withdrawals from a nonqualified deferred annuity before age 59½ are subject to a 10% penalty tax, in addition to regular income taxation, except in certain cases, such as the contract owner's death or disability B. with a deferred annuity, income taxation of the interest earned on premiums paid is deferred until withdrawn C. a withdrawal from a deferred annuity under the contract's free withdrawal provision exempts the distribution from the pre-59½ penalty tax D. there is no income tax deduction for paying premiums for a nonqualified annuity, unless the annuity is used to fund a qualified retirement plan
C. a withdrawal from a deferred annuity under the contract's free withdrawal provision exempts the distribution from the pre-59½ penalty tax
If a group policy is being replaced by a new group policy then the new policy is required to do all but: A. accept all persons who were covered under the previous policy. B. allow a conversion to an individual policy at the end. C. accept all existing claims currently on the books. D. accept all new claims.
C. accept all existing claims currently on the books.
When an agent solicits a sale of long-term care insurance, the outline of coverage must be delivered to the applicant A. when the policy is delivered B. when the first premium is paid C. before the presentation of an application or enrollment form D. at the expiration of the free-look period
C. before the presentation of an application or enrollment form
The commissioner of insurance is a person who: A. is appointed by the CA governor. B. is appointed by state senate. C. is elected by the citizens of CA. D. is appointed by the leaving commissioner of insurance.
C. is elected by the citizens of CA.
Which statement is false concerning the interpretation of policy provisions? A. there are three branches of government that control insurance B. the judicial branch makes rulings on the meaning of policies. C. the executive branch is headed by the insurance commissioner, who enacts the laws D. the legislative branch enacts the laws and control the conduct of insurance business in california
C. the excutive branch is headed by the insurance comminssioner, who enacts the laws
How many days of 'free look' does a 62 year old get who is buying a disability policy? A. 60 B. 30 C. 15 D. 10
D. 10
All of the following could be penalties of insurance fraud except: A. $50,000 B. 1 year in a county jail. C. $10,000 D. 5 years in a federal prison.
D. 5 years in a federal prison.
Which of the following is not true with regards to CE's. A. In your 3rd year of license you will need 25 credit hours. B. In your 5th year you do not have a yearly requirement. C. In your 7th year you would not need any CE's if you completed 30 in year 6. D. After your first 4 years, your yearly requirement reduces from 25 a year to 15 a year.
D. After your first 4 years, your yearly requirement reduces from 25 a year to 15 a year.
Each of the examples below describe fair classifications based on actuarially acceptable guidelines, except: A. Nicotine use B. Where someone lives C. Occupation D. Age of insured's spouse
D. Age of insured's spouse
For permanent life insurance, the premium is structured to accomplish which of the following? A. Mortality (provide a death benefit) B. Cash value (accumulation) C. Loading (insurance company's cost of providing insurance and their profit) D. All of the above
D. All of the above
What issues should be examined in order to determine whether a life insurance program needs to provide survivor protection? A. Current assets and liability of the family B. Amount of income lost by the death of the primary wage earner C. The cost of replacing child care and home maintenance upon the loss of a nonworking spouse D. All of the above are factors.
D. All of the above are factors.
When can a licensee give up a license? A. After one year. B. After two years. C. Any time after 30 days of receiving the license. D. Anytime.
D. Anytime.
What is the time and dollar limit for work comp medical benefits? A. 100 days / $100,000 B. 6 months / no dollar limit C. no time limit / $100,000 D. Benefits are provided without time or dollar limit.
D. Benefits are provided without time or dollar limit.
Which of the following is NOT true regarding an agent and broker. A. An insurance agent is a representative of an insurance company in solic?iting and servicing policyholders. B. A broker is any person who transacts insurance, other than life insurance, on behalf of clients with insurance companies. C. A broker represents the insured, NOT the insurer. D. Brokers can legally bind insurance anytime necessary to do so.
D. Brokers can legally bind insurance anytime necessary to do so.
All of the following would be income tax free except: A. Cash withdrawn from the policy`s cash value. B. Cash surrender amount is the same as the amount of the premiums. C. Policy loan. D. Cash surrender amount is in excess of the premiums paid.
D. Cash surrender amount is in excess of the premiums paid.
What should not be evaluated when looking into long term care? A. Inflation protection. B. Benefit limits. C. Elimination period. D. Convertibility provision.
D. Convertibility provision.
A change in a licensee's address must be submitted to the DOI within how many days? A. 7 days B. 10 business days C. 14 business days D. Immediately
D. Immediately
Which of the following could not be named as a beneficiary? A. Spouse B. Child C. Complete stranger D. Insured
D. Insured
On the way home from work, Jeremy is involved in a car accident that damages his cervical vertebrae and surrounding nerves. Jeremy becomes quadriplegic as a result of the accident. What describes the insurance premiums he will pay for the rest of his life if his policy contains an optional Waiver of Premium rider? A. Jeremy will continue paying the permiums in the same manner as before the accident. B. Jeremy's premiums will be wavied for the rest of his life. C. Jeremy will have to pay a six-month period worth of premiums. D. Jeremy will have to pay a six-month period worth of premiums, but will be reimbursed later for them.
D. Jeremy will have to pay a six-month period worth of premiums, but will be reimbursed later for them.
What type of insurance company has no capital stock but is owned by the policyholders? A. Stock B. Fraternal C. Demutualization D. Mutual
D. Mutual
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements will he need to obtain in order for the corporation to be a legal annuitant? A. Business Annuitant Contract B. Corporate Annuitant Statement C. None. Corporations are always legal annuitants. D. None. Corporations are never legal annuitants.
D. None. Corporations are never legal annuitants.
What kind of annuity is used to accumulate funds in an IRA? A. Equity Indexed B. Market Value Adjusted C. Retirement Annuity D. Tax-Qualified
D. Tax-Qualified
The Notice of Claim provision in a disability policy states all the following except: A. After the occurrence, the insured must file a notice within 20 days. B. The insured must report the loss to the company within a reasonable period of time after the occurrence. C. The insured must submit proof of disability before the company sends payments. D. The insured must submit proof of disability every year for disabilities that last over 6 months.
D. The insured must submit proof of disability every year for disabilities that last over 6 months.
A life insurance policy loan provision states all of the following except: A. Policyowner may repay the loan at any time B. The policyowner is charged interest on a policy loan at the rate specified in the policy C. The interest that is not paid when due is added to the loan D. The loan may be for any amount up to the policy's face amount
D. The loan may be for any amount up to the policy's face amount
Which one of the following does not constitute an insurance transaction? A. Solicitation B. Negotiation C. Execution of a insurance contract D. Transaction of matter subsequent to money changing hands.
D. Transaction of matter subsequent to money changing hands.
All of the following statements are true regarding the waiver of premium with a disability income rider EXCEPT A. The premiums are waived in the event of a total and permanent disability. B. The insured is also paid a monthly income during the disability. C. There is typically a waiting period of six months prior to the first benefit payment. D. When the insured recovers and returns to work, the premiums that were waived must be repaid by the insured.
D. When the insured recovers and returns to work, the premiums that were waived must be repaid by the insured.
Each of the following would be able to deduct the premiums of a life policy from taxes except: A. A company purchasing group term life for employees. B. A company paying premiums for employees as a bonus or incentive. C. When a policy is owned by a charitable organization. D. When the premiums are paid from a company bonus.
D. When the premiums are paid from a company bonus.
A licensee has 60 days past the expiration date to continue business as long as he or she has: A. had a license for at least 2 years. B. submitted the renewal application before the expiration date. C. submitted the continuing education requirement before the expiration date. D. met all requirements and submitted the license renewal fee before expiration date.
D. met all requirements and submitted the license renewal fee before expiration date.
