Life Insurance Missed Questions

What is a penalty for transacting insurance without a proper license ?

$ 1,000

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

$ 10,000 , no tax consequence

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

$ 2,500

What is the maximum amount that the Nevada Life & Health Insurance Guaranty Association may be obligated to pay with respect to disability insurance for 1 life ?

$ 300,000

An insured owns a $ 50,000 whole life policy . At age 47 , the insured decides to cancel his policy and exercise the extended term option for the policy's cash value which is currently $ 20,000 . What would be the face amount of the new term policy ?

$ 50,000

The insured is also the policyowner of a whole life policy . What age must the insured attain in order to receive the policy's face amount ?

100

Which of the following does NOT fit the definition of an administrator ?

A life and health producer who only sells insurance

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory

All of the following are personal uses of life insurance EXCEPT

Buy - sell agreement .

How are state Insurance Guaranty Associations funded ?

By their members - authorized insurers

A tax - sheltered annuity is a special tax - favored retirement plan available to

Certain groups of employees only .

An agent selling variable annuities must be registered with

FINRA .

The requirement that agents must account for all insurance funds collected , and without the expressed consent of the insurance company ( ies ) are not permitted to commingle those funds with their own funds , is known as

Fiduciary responsibility .

Under a 20 - pay whole life policy , in order for the policy to pay the death benefit to a beneficiary , the premiums must be paid

For 20 years or until death , whichever occurs first .

All of the following are business uses of life insurance except

Funding against general company financial loss

Which of the following is an eligibility requirement for all Social Security Disability Income benefits ?

Have attained fully insured status

What type of insurance would be used for a return of premium rider

Increasing term

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT

It is a life contingency option .

Which of the following is NOT a type of whole life insurance ?

Level term

Which of the following is an example of a limited - pay life policy ?

Life Paid - up at Age 65

All of the following statements are true regarding group insurance except

Participants in the policy each receive their own policy

Which of the following is another term for the accumulation period of an annuity ?

Pay - in period

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time , and proof of insurability is provided . Which policy provision allows this ?

Reinstatement provision

The Ownership provision entitles the policyowner to do all of the following EXCEPT

Set premium rates .

Which of the following statements about a suicide clause in a life insurance policy is true ?

Suicide is excluded for a specific period of years and covered thereafter .

Which is NOT true about beneficiary designations ?

The beneficiary must have insurable interest in the insured .

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 insured had his wife named as the beneficiary of his life insurance policy . To ensure that his wife had income for life after the insured's death , he chose the life income settlement option . The amount of payments will be determined by taking into account all of the following EXCEPT

The insured's age at death

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 ?

The insured's contingent beneficiary

Which of the following is NOT required on an illustration used in the sale of a life insurance policy ?

The name of the primary and secondary beneficiaries

If an insurer issued a policy based on the application that had unanswered questions , which of the following will be TRUE ?

The policy will be interpreted as if the insurer waived its right to have an answer on the application

If an insured continually uses the automatic premium loan option to pay the policy premium

The policy will terminate when the cash value is reduced to nothing

What is the purpose of a disclosure statement

To explain features and benefits of a proposed policy to consumer

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

The Commissioner must give reasonable notice to all interested parties as to the time , place and purpose of a hearing within the minimum of how many days of the hearing ?

20 days

Within how many months must a person be expected to die from a sickness in order to be classified as terminally ill for the purposes of a viatical settlement ?

24

If a person is charged with a category D felony for committing insurance fraud , what would be the maximum time of imprisonment ?

4 years

How many days after cancellation of a license in another state does a new resident agent have to apply for Nevada producer license without having to fulfill licensing examination and education requirements ?

90

What is a foreign insurer ?

An insurer with a home office in another state

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association , that would be considered

An unfair trade practice .

What type of life insurance is most commonly used for group plans

Annually Renewable Term

Employer contributions made to a qualified plan

Are subject to vesting requirements .

When must insurable interest exist in a life insurance policy ?

At the time of application

Which of the following must be obtained by someone who intends to function as an administrator ?

Certificate of authority

Which of the following must be obtained by someone who intends to function as an administrator ?

Certificate of registration

Because an insurance policy is a legal contract , it must conform to the state laws governing contracts which require all of the following elements EXCEPT

Conditions

Representations are written or oral statements made by the applicant that are

Considered true to the best of the applicant's knowledge .

In increasing and decreasing term policies , which policy component fluctuates during the policy term ?

Death benefit

The term " fixed " in a fixed annuity refers to all of the following EXCEPT

Death benefit

Which of the following is not an example of a valid insurable interest

Debtor in creditor

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

Defamation

An individual has been making periodic premium payments on an annuity . The annuity income payments are scheduled to begin after 1 year since the annuity was purchased . What type of annuity is it ?

Deferred .

Which of the following policy provisions required in group life insurance policies states that a policy application must be attached to the policy when issued ?

Entire contract

For purpose of determining its financial condition , fulfillment of its contractual obligations and compliance with Nevada law , the Commissioner will examine the affairs of each insurer as often as deemed necessary . Each domestic insurer must be examined at least

Every five years .

Which of the following entities protects policyowners , insureds , and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment ?

Insurance Guaranty Association

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured , and to whom the benefits will be paid ?

Insuring clause

Which of the following settlement options in life insurance is known as straight life ?

Life income

All of the following are required provisions in all group life insurance policies issued in this state EXCEPT

Nonforfeiture benefits

Which of the following is true about class designation

Not identified by name

Which Universal Life option has a gradually increasing cash value and a level death benefit ?

Option A

Traditional ira contributions are tax-deductible based on which of the following

Owner's income

Which of the following riders would NOT cause the Death Benefit to increase ?

Payor Benefit Rider

Which of the following statements is true concerning the accidental death rider

Pays double or triple the face amount in the event of the insured's accidental death

If the policyowner , the insured , and the beneficiary under a life insurance policy are three different people , who has the ownership rights ?

Policyowner

In which of the following instances would the premium be tax deductible ?

Premiums paid by an employer on a $ 30,000 group term life insurance plan for employees

Which of the following statements concerning a Simplified Employee Pension plan ( SEP ) is INCORRECT ?

SEPS are suitable for large companies .

Which of the following is TRUE regarding variable annuities ?

The annuitant assumes the risks on investment .

The president of a company is starting an annuity and decides that his corporation will be the annuitant . Which of the following statements is true ?

The annuitant must be a natural person .

Which of the following is the basic source of information used by the company

The application

When a producer's appointment with the insurer is terminated , who must notify the Commissioner ?

The appointing insurer

The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death . Who will select the settlement option in this case ?

The beneficiary

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness , how will that affect the payable death benefit from the policy ?

The death benefit will be smaller .

Which of the following best describes what the annuity period is

The period of time during which accumulated money is converted into income payments

All of the following are requirements for life insurance illustrations EXCEPT

They must be part of the contract .

When may an insurance company use suicide as a defense against paying a death claim ?

When death occurs within a specified period of time after the policy was issued.

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 .

The mechanism used by individuals to transfer their risk of loss to a larger group of individuals that have similar exposures to loss , is called

insurance