Life insurance Quiz B100
Roberto has a premium policy with cash value. He decides to surrender it because he no longer needs the coverage. He has paid $15,000 in premiums over the years. After he surrendered the policy. He received $20,000 from the insurer. What part of the $20,000 is taxable ?
$5,000
How long is the minimum free lol period in New York State?
10 days
The superintendent may suspend or revoke a license if the licensees controlled business for the years is greater than how many % of their net aggregate yearly business
10%
In New York State, an insurer can legally offer its insured what maximum percentage (%) of the face amount in an accelerated death benefit ?
100%
A policy owner cancels his life insurance policy but instructs the insurance company to transfer his cash value to annuity. This non taxable transaction is called a
1035 exchange
Licensees must complete how many hours of continuing education every 2 years in order to renew their license
15
An insurance policy becomes incontestable after this period of time:
2 years
In order to qualify for a life insurance license a candidate must complete how many hours of pre-licensing education?
20
In a life settlement, the money must be sent to the owner of the policy within how many business days after the life settlement provider has been notified that ownership of policy has been transferred?
3
Within how many days of requesting an investigative consumer report must the consumer be notified in writing that the report will take place?
3
What is the maximum time limit after a life insurance policy has lapsed to reinstate it?
3 years
An insurance company places fixed annuities premiums into their general account. The guaranteed minimum interest on the annuity is set at 3%. Two years later interest rates go down to 2% what rate of interest will the annuity earn during the downturn?
3%
Group life insurance policies allow the participant to convert from the group policy to an individual policy upon termination of employment or termination of the group within how many days of either occurrence
31
to qualify for a waiver of premium benefit, an insureds disability must be permanent, total and occur before a stated age. The disability is considered permanent after the insured has been totally disabled continuously for at least
6 months
Generally, IRA rollovers must be complete within how many days from the time the $ is taken out of the first plan?
60
After a cybersecurity event has occurred, an insurer must report the event to the N.Y. State department of financial services within how many hours ?
72 hours
A temporary insurance agent's license can be issued by N.Y. State for a period of
90 days
Scott, age 30, plans to retire at age 50. He would like to purchase an annuity that would pay income to him from his retirement age till age 65, when social security would be available. Which annuity should he purchase?
A deferred with fixed period
The Yoshi insurance company is incorporated in Texas. While conducting business in Nebraska, it is
A foreign insurer
All of the following could own group life insurance EXCEPT:
A group needing low cost life insurance.
The N.Y. State superintendent of insurance is:
A state official that coordinates and controls the enforcement of insurance laws within the state
The form of assignment where all rights are transferred to another party is known as:
Absolute
Which of the following is not a nonforfeiture option?
Accelerated living
The double indemnity payment is a provision of some life insurance policies. This clause provided extra proceeds in the event of death of the insured resulting from:
Accidental death before age 65 directly and independently of all other causes within 90 days from the date of the accident
The dividend option Will generate a 1099 form (tax consequences) for the policyholder:
Accumulate with interest
If a wife owns a $100,000 life insurance policy on her husband (husband is the insured), naming their children as beneficiaries, which of the following persons must sign the application?
Agent, wife and husband
Which of the following is a requirements for obtaining a producers license in New York State!
All of the above
Life insurance producers acting as agents are authorized to do which of the following ?
All of the choices listed above
The rate at which interest is credited on funds in Jim's deferred annuity is determined by the performance of the S&P 500 index. Which type of annuity does he own?
An equity indexed annuity
When an annuity is written, whose life expectancy is taken in to consideration?
Annuitant
What is a periodic payment which may commence at a stated date and may be continued to a designated person, for a fixed period, or for the life or lives of the person(s) entitled to receive payment.
Annuity
The owner of a life insurance policy must have an insurable interest in the insureds life:
At the time of the application
With what provision, overdue premiums, which extend beyond the Grace period, will be paid until the cash surrender value of the policy is exhausted:
Automatic premium loan
Howard's fills out an application for a life insurance policy to insure his own life and for which he will pay the premiums. Howard would be considered all of the following EXCEPT.
Beneficiary
In order for an insurer to legally conduct business in this state, it must obtain
Certificate of authority
When money is received at the time of application, a certain type of receipt may be issued. Know as a what, this type of premium receipt allows coverage to become effective on the day of application as long as the applicant is insurable according to the insurer's underwriting standards
Conditional insurability receipt
A party submitting a "take it or leave it" contract to another party is an example of what type of contract?
Contract of adhesion
Which of the following may contribute to proof of death for the purpose of receiving the benefit from a life insurance agency
Death certificate
A 12 year old child applies for a life insurance policy. The applicant is healthy and excels in sports. What risk classification would the applicant receive
Declined
Loans taken on life insurance policies
Do not have to be repaid by the insured, but reduce the death benefit
The one year term dividend option allows the policy owner to purchase a one year term policy with the dividend equal to as much term as it can buy for one year or
Equal to the policy's cash value for as long as it will last
To reinstate a lapsed life insurance policy, which of the following must be submitted to the insurer?
Evidence of good health, overdue premiums and interest on overdue premiums, and a reinstatement application
William is a producer for home insurance company. His contract states that he is allowed to use company logo on business cards and communications. This is an example of
Express authority
When insurers use outside agencies to supplement information found on applications (i.e, credit reports or MIB reports), the insurer and its agents must comply with:
Fair credit reporting act of 1971
Under which of the following annuity pay-outs are no life contingencies involved?
Fixed amount
Settlement options assure the policy owner and his beneficiaries of a planned income arrangement on a guarantee basis. The settlement option that provides for proceeds to be paid in equal monthly payments, liquidating principal with interest, over a specified period of years, is the what option
Fixed period
What allows insurance to remain in force following the due date of a premium, when no such premium has been received either by the home office of the insurer or by an agent authorized to received premiums.
Grace period provision
The form of life insurance issued to the employer, on which the premium is paid by the employer, or by both employer and employee and which insures all of a class of employees, is known as which of the following?
Group insurance
Which of the following riders allows the insured to purchase additional insurance at one or more future option dates without evidence of insurability?
Guarantee insurability rider
Which of the following qualified retirement plans was developed primarily for self employed businesses?
HR 10 plan
A double indemnity rider may be added to a life insurance contract to provide that double the face amount of insurance is payable
If the death of the insured is caused by accidental means
Which standard provision of a life insurance policy allows the insurer to deny payment of claims or cancel a policy during the first two years if fraudulent statements or material misstatements are discovered in the application?
Incontestability Clause
Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits of the amount loss?
Indemnity
Private pension plans purchased by individuals, which may be tax deductible to the individual under ERISA are which of the following?
Individual retirement accounts (IRAs
STOLI's are not allowed in New York State because they violate the principle of
Insurable interest
Bob and Mary are in a fatal car crash where both of them die instantaneously. Mary is the primary beneficiary of a policy on bobs life. They have one surviving child. What happens to the death benefit?
It is paid to the contingent beneficiary and if one doesn't exist to bobs estate
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
Robert is the beneficiary of his brothers life insurance policy. He wants the proceeds from the death benefit to last not only as long as he lives but also as long as his wife lives.
Joint and survivor life option
If life insurance protects against premature death, what protects against living too long ?
Life annuity
William has chosen to receive the payout from his brothers life insurance policy in such a way that he will have an income for life, regardless of how long he lives. William selected the
Life income option
Is a universal policy, option A has a corridor which raises the death benefit to avoid
Losing tax advantages
Which of the following is NOT an advantage of whole life policies?
Low cost
The misstatement of Agee Clause (provision), in a life insurance contract allows the insurer to do what if it finds that the age of the insured has been missed.
Modify the amount payable under the policy to the amount the premiums would have purchased at the insureds correct age
Maria becomes injured in a car accident which occurred because she answered her cell phone. This is an example of which kind of hazard?
Morale
When a whole life insurance policy lapses, certain rights are extended to the policy owner regarding the cash values, (known as cash value, reduced paid -up, and extended term options.) which provision addresses these options?
Nonforfeiture benefits
If Kim applies for a life insurance policy on the life of her husband Jim, where she is the owner of the policy, which of the following us true?
Only Kim can borrow against the policy and only Kim can change the beneficiary without notifying him for she is the policy owner
Dividends and dividend options are extended to the policy owner as a return of part of the premium collected, after mortality losses, interest earnings and expenses have been determined. Which of the following policies/contracts are entitled to these dividends?
Participating policies
What describes the specific information about a policy?
Policy summary
Which of the following is NOT fundable by an annuity
Premature death
Consideration in life insurance is the application and premium offered by the applicant and the insurers:
Promises made in the contract
The owner of a life insurance policy has the right to do which of the following ?
Receive all cash values, loans and other benefits accruing under the policy
A/An what is a statement made by the applicant at or before the time the life insurance contract is formed, which is believed to be true:
Representative
All the time of delivery, a producer is responsible to explain the policy, its provisions, riders and ratings to the client. When performing these services while acting as an agent for a company the producer is:
Representing the company
What beneficiary is entitled to the benefits of the policy if the primary beneficiary is not living at the time of death of the insured:
Secondary
The 10 day free look provision allows the insured to review the policy for 10 days. during this period the insured may return the policy.
Securing a refund for all premiums
The ownership provision entitles the policy owner to do all of the following EXCEPT:
Set premium rates
What policy pays the face amount of the policy if the insured dies during a designated period of time, has no cash value, and cannot be extended beyond age 80
Term
The purpose of the "entire contract" provision is to assure the policy owner which of the following:
That the policy itself includes the complete text of the policy owner's application with the insurer.
If a life insurance contract is assigned to another by the policy owner, which of the following is true?
The assignee will have first rights to the cash value and death benefit
Who would receive the cash value if the annuitant were to die during the pay in period ?
The beneficiary
A claim due to a material misrepresentation during the contestable period results in which of the following?
The denying of any claim, with a full refund of all premiums paid
Leslie applied for insurance without paying the premium. The policy was accepted. When the agent delivers the policy she should pick up:
The due premiums and a signed good health statement
An agent analyzed Jason's life insurance needs taking into account Jason's salary, his age, his expected retirement age and depreciation of the dollar over time. The agent was using
The human value life approach to life insurance need
When a life producer acting as a broker aids the insured in completing an application he is said to be acting for:
The insured
When Susan was hired, she was not eligible to join the group insurance plan for 90 days. This is an example of
The probationary period
When delivering a life insurance policy, for which no payment was made at the time of application, a producer is required to obtain a statement of good health and the premium which of the following is true?
The signed statement and premium will place the coverage in force
Juvenile policies pay the face amount of the policy upon death of an insured child. A rider usually added to these policies referred to as they payor clause, provides for:
The waiving of premiums in the event of the death/total disability of the adult premium payor
All of the following are true of non-forfeiture options except:
They are found in most term insurance policies
Which is true for both equity indexed annuities and fixed annuities?
They both have a guaranteed interest rate
Which of the following is NOT a use for cash value in permanent policy ?
To help in underwriting of insured
The intent of key person life insurance is which of the following ?
To insure the loss of services caused by the death of a vital employee
Salvatore has a state insurance agent license but no other licenses. He can sell any of the following products EXCEPT
Variable whole life
A/An what is a statement made by the insurer which is guaranteed to be true, and if not, can void the contract
Warranty
The insurer pays a face amount to the insureds beneficiary whenever the insurers death may occur up to age 100, under which of the following policies
Whole life
If an irrevocable beneficiary designation has been used on a life insurance policy how may the owner of the policy change it ?
With the written permission of the beneficiary
Which of the following settlement options provides for payments to be made in regular installments of a specified amount until the principal and interest are exhausted?
a fixed amount
The death protection component of Universal Life Insurance is always
annually renewable term
The failure to disclose known facts is
concealment
The following are legitimate uses of insurance in a business setting EXCEPT
funding against general company financial loss
events in which the principal has both the chance of winning or losing are classified as?
specultive risk
