Life Insurance Missed Questions
Social Security was created to provide all of the following benefits EXCEPT
Unemployment income.
An applicant properly notifies her insurer of a straightforward claim, but the insurer waits an exceedingly long time to process it. Which of the below terms best describes the behavior of the insurer?
Unfair claims settlement practice
All of the following benefits are available under Social Security EXCEPT
Welfare benefits
All of the following are true about variable products EXCEPT
The premiums are invested in the insurer's general account.
An agent holds an insurance license in the state of Kansas and would like to transact insurance in Texas. The agent became licensed before written examinations were required. Therefore, the agent has not actually passed any kind of examination. Which of the following is true?
The written examination requirement will be waived.
What percentage of a company's employees must take part in a noncontributory group life plan?
100%
Within how many years must an agent renew an insurance license?
2
If a policyowner surrenders his life insurance policy that has been in force for 5 years within 60 days after the premium due date, what will the insurer be required to pay?
A cash surrender value
All of the following statements about the continuing education requirement in this state are true EXCEPT
All licensed agents must comply by January 1 of even-numbered years
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
Under which of the following circumstances would an insurer pay accelerated benefits?
An insured is diagnosed with cancer and needs help paying for her medical treatment.
When an individual obtains an insurance license for the primary purpose of writing insurance on him- or herself, or for members of his or her immediate family, or business, this is called
Controlled business
Which of the following actions is NOT in violation of the Unfair Claims Settlement Practices Act?
Denying an unsubstantiated claim
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
Dividends from a mutual insurer.
All of the following are dividend options except
Fixed period installments
In a direct rollover, how is the money transferred from one plan to the new one?
From trustee to trustee
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
Have attained fully insured status
To become a Texas insurance agent, an individual must
Have passed a licensing exam within the 12 months before applying.
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?
IDK
WOF products requires a securities license
IDK
Which of the following is not the consideration in a policy
IDK
What is the main purpose of the Seven-pay Test?
It determines if the insurance policy is a MEC.
What is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection.
Which of the following is NOT true regarding a Certificate of Authority?
It is issued to group insurance participants.
Which of the following is true about the premium on the children's rider in a life insurance policy?
It remains the same no matter how many children are added to the policy.
Which of the following statements is TRUE about a policy assignment?
It transfers rights of ownership from the owner to another person.
Which of the following settlement options in life insurance is known as straight life?
Life income
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?
Life income with period certain
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited Pay Whole Life
An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
Material Misrepresentation - It will affect whether or not the policy is issued. IF the insured had been truthful, it it's very likely that the policy would not have been issued
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-Insured Rider
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?`
Profit sharing plan
Another name for a substandard risk classification is
Rated
An insured committed suicide one year after his life insurance policy was issued. The insurer will
Refund the premiums paid.
A domestic insurer issuing variable contracts must establish one or more
Separate accounts.
Which of the following information will be stated in the consideration clause of a life insurance policy?
The amount of premium payment
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination
Which is true about a spouse term rider?
The rider is usually level term insurance.
Under an extended term nonforfeiture option, the policy cash value is converted to
The same face amount as in the whole life policy.
All of the following are true about variable products except
idk
The Commissioner of Insurance issues a Cease and Desist Order to an agent. If the agent wishes to contest the charges in court, how many days after the order was issued does the agent have to make the request?
30 days
In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?
5
Which of the following is the required number of participants in a contributory group plan?
75%
The ownership provision entitles the policyowner to do all of the following except
IDK
An insurer advertises a health policy that is covered by the Life and Health Insurance Guaranty Association. The advertisement includes a short list of benefits and approximate rates. The end of the advertisement includes statement that protection is provided by the Guaranty Association. Which of the following is true?
Mentioning the Guaranty Association in advertisements is considered to be unfair trade practice.
What is the number of credits required for fully insured status for Social Security disability benefits?
40
Viatical settlements may be rescinding within what time period after the viator receives the proceeds?
15 days
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated.
An agent selling variable annuities must be registered with
FINRA
The term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy.
If a licensed agent in Texas receives a criminal conviction, that information must be reported to
Department of Insurance.
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)
Equity Indexed Annuity.
During replacement of life insurance, a replacing insurer must do which of the following?
Obtain a list of all life insurance policies that will be replaced
Which policy component decreases in decreasing term insurance?
Face amount
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association.
Which of the following is NOT true regarding a Variable Universal Life policy?
The death benefit is fixed.
An insurance policy that only requires a payment of premium at its inception
IDK
The minimum interest rate on an equity indexed annuity is often based on
IDK
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a
Guaranteed insurability rider.
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
Illegal
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
Incontestability clause.
A life insurance policy has a legal purpose if both of which of the following elements exist?
Insurable interest and consent
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT
At distribution, all amounts received by the employee are tax free.
An individual wants to purchase a life insurance policy. His agent asks if the transaction will involve replacing any existing life insurance policies. If the customer replies, "Yes," which of the following best describes the agent's next step?
The agent must provide a replacement notice to the applicant.
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.
Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?
The employer is the owner and beneficiary.
Who bears all of the investment risk in a fixed annuity?
The insurance company
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.
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
The insured's premiums will be waived until she is 21.
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
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
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.
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?
Fair Credit Reporting Act
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
False advertising
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
Family term rider
An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed insurability option
A Return of Premium term life policy is written as what type of term coverage?
Increasing
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an
Interest-sensitive Whole Life.
As a field underwriter, a producer is responsible for all of the following tasks EXCEPT
Issue the policy that is requested.
Which of the following information about the applicant is NOT included in the General Information section of the application for insurance?
Medical background
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
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time that the insured had concealed information during the application process. What can they do?
Pay the death benefit
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
Payor Benefit
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 determines the length of time that benefits will be received under the Fixed-Amount settlement option?
Size of each installment
Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?
Stock
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 of the following is NOT the consideration in a policy?
The application given to a prospective insured
if a life insurance policy has an irrevocable beneficiary designation,
The beneficiary can only be changed with written permission of the beneficiary.
In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to
The contingent beneficiary.
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer will pay the full death benefit from the group policy to the beneficiary.
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
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.
Which of the following is TRUE for both equity indexed annuities and fixed annuities?
They have a guaranteed minimum interest rate.1
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
Which of the following products requires a securities license?
Variable Annuity
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called
Waiver of premium.
When would a 20-pay whole life policy endow?
When the insured reaches age 100