Life insurance pt 2
What is a penalty for transacting insurance without a proper license?
$1,000
What is the maximum amount that the Nevada Life and Insurance Guaranty Association may be obligated to pay- with respect to disability insurance for 1 life?
$300,000
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
Bev is insured under her employer's group life insurance policy. She dies while the policy is still in force. The benefits must be paid within how many days?
30
When requested by a person aggrieved by an act, a hearing must be held within how many days after the commissioner receives the written demand?
30 days
when requested by a person aggrieved by an a act, a hearing must be held within how many days after the commissioner receives the written demand?
30 days
Which of the following names beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?
A minor son of the insured
Which of the following documents delivered to the policy owner includes info about premium amounts, cash values, surrender values and death benefits for specific policy years?
A policy summary
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
Which of the following actions by an insurance company will cause an examination by the commissioner?
Application for an initial Certificate of Authority.
Which of the following. Is a feature of variable life annuity
Benefit payment amounts are not guaranteed
What license or licenses are required to sell variable annuities?
Both a life insurance license and a securities license
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
Which of the following features of the indexed whole life policy is NOT fixed?
Cash Value growth
An insured receives an annual life insurance dividend check. What term best describes this arrangement
Cash option
A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?
Collateral Assignment
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
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?
Fixed amount
What type of premium do both Universal Life and Variable Universal Life policies have?
Flexible
Which of the following is true about the mandatory look period in a life insurance policy?
It commences when the policy is delivered
Which of the following statements is TRUE concerning the accidental death rider
It will pay double or triple the face amount
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
Which statement is NOT true regarding a Staright Life policy?
It's premium steadily decreases over time, in response to its growing cash value.
Variable whole life insurance is based on what type of premium?
Level fixed
Which of the following settlement options in life insurance is know as straight life?
Life Income
A policy owner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policy owner should have her husband named as the...
Revocable beneficiary
A policy owner who is also the insured wants to name her husband as the beneficiary of her policy. She also wishes to retain all of the rights of ownership. The policy owner should have have her husband named as.
Revocable beneficiary
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 determines the length of time that benefits will be received under the Fixed-Amount settlement option?
Size of each installment
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection
All of there following would be different between qualified and non qualified retirement plans EXCEPT
Taxation in accumulation
Which of the following information will be stated in the consideration clause of a life insurance policy?
The amount of premium payment
If a life insurance policy has an irrevocable beneficiary designation,
The beneficiary can only be changed with written permission of the beneficiary
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then
The benefit is received tax free
Which of the following is a key distinction between variable whole life and variable life products?
Variable whole life has guaranteed death benefit
Which of the following may NOT be included in an insurance company's advertisement?
What is policies are covered by a state Guaranty Association
Which of the following statements regarding the taxation of Modified endowment Contracts is FALSE? a. Policy loans taxable distributions b. Accumulations are tax deferred c. Withdrawals are not taxable d. hehejfkggmntnrnd
Withdrawals are not taxable
Which of the following statements regarding the taxation of modified endowment contracts is FALSE?
Withdrawals are not taxable
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristics does this describe?
adhesion
Universal Life Insurance policy is best described as a?
annually renewable term policy with a cash value account
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
consideration
Which of the following would be the beneficiary in credit life insurance?
creditor
All of the following are true regarding the guaranteed insurability rider EXCEPT? a. The insured may purchase additional coverage at the attained age. b. The insured may purchase additional insurance up to the amount specified in the base policy. c. It allows the insured to purchase additional amounts of insurance without proving insurability only at specified dates or events. **d. This rider is available to all insured.
d. This rider is available to all insured
What type of premium do both Universal Life and Variable Universal Life policies have?
flexible
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
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
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
the employer is the owner and beneficiary
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?
2 years
For how long is an insurance company allowed to defer policy loan request?
6 months
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months: most insurers impose a 6-month waiting period from the time of disability until the first premium is waived.
Which of the following is required for a producer to transact business on behalf of the insurer
An agent appointment
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
Any form of life insurance
The accelerated benefits provision will provide for an early payment of the death benefit when the insured...
Become terminally ill
Which of the following would be the beneficiary in credit life insurance?
Creditor
Which of the following is TRUE regarding the insurance amount in a credit life policy?
Creditor can only insure the debtor for the amount owed.
In increasing and decreasing term policies, which policy component fluctuates during the policy term?
Death Benefit
In increasing and decreasing term policies, which policy component fluctuates during the policy term?
Death benifit
Which of the following is true regarding taxation of dividends in participating policies?
Dividends are not taxable.
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
Which of the following best describes the aleatory nature of an insurance contract?
Exchange of unequal values
Which policy component decreases in decreasing term insurance?
Face Amount
What does "level" refer to in level term insurance?
Face amount
Which is TRUE about the cash surrender nonforfeiture option?
Funds exceeding the premium paid are taxable as ordinary income.
Which is true about the cash surrender nonforfeiture option? A. After the cash surrender, the insured is covered for a grace period of 1 month. B. The policy remains active for some time after the policy owner opts for cash surrender C. The policyholder received the original cash value of the policy D. Funds exceeding the premium paid are taxable as ordinary income.
Funds exceeding the premium paid are taxable as ordinary income.
At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future so the out having to provide insurability. The rider is called?
Guaranteed insurability
Stranger-Originated Life Insurance (STOLI) policies are in direct opposition to the principle of...
Insurable interest
The medical information bureau (mib) was created to protect...
Insurance companies from adverse selection by high risk persons
All of the following are Nonforfeiture options EXCEPT 1. Extended term 2. Reduced paid-up 3. Interest only 4. Cash Surrender
Interest only
Which of the following information about the applicant is NOT included in the General Information selection of the application for insurance?
Medical Background
Which of the following information about the applicant is NOT included in the General Information section of the application for insurance?
Medical background
Which of the following is NOT true regarding policy loans?
Money borrowed from the cash value is taxable.
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report
All of the following are required provisions in all group life insurance policies issued in this state EXCEPT:
Nonforfeiture benefits
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-insured rider
Which of the following is NOT true about a joint and survivor annuity benefit option?
Payments stop after the first death among the annuitants.
Which of the following is Not true about a joint survivor annuity benefit option?
Payments stop after the first death among the annuitants.
All of the following are true regarding insurance policy loans EXCEPT
Policy loans can be made on policies that do not accumulate cash value.
All of the following are true regarding insurance policy loans except?
Policy loans can be made on policies that do not accumulate cash value.
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as
Rebating
The policy owner pays for her life insurance annually. Until now, she has collected a no taxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?
Reduction of premium
The Federal Fair Credit Reporting Act.
Regulates consumer reports
Which type of retirement account does not require the owner to start taking distributions at age 72?
Roth IRA
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
Signed waiver of premium
An IRA purchased by a small employer to cover employees is known as a
Simplified Employee Pension plan
Which of the following determines the length of thing that benefits will be received under the Fixed-Amount settlement option?
Size of each installment
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?
The insured may choose to convert to term or permanent individual coverage.
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.
What does credit life and health insurance cover?
The life and disability of a debtor during the time a loan is outstanding
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 true of a key person insurance EXCEPT.
The plan is funded by permanent insurance only.
All of the following are true about variable products EXCEPT
The premiums are invested in the insurer's general account.
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
Which type of life insurance policy allows the policy owner to pay more or less than the planned premium?
Universal life
All of the following are true regarding a decreasing term policy EXCEPT
the payable premium amount steadily declines throughout the duration of the contract
Which of the following products requires a securities license?
Variable annuity
Which of the following components must a life insurance policy have to allow policy loans?
cash value
which of the following components must a life insurance policy have to allow policy loans?
cash value