Life Insurance Study Set

Misdemeanor

A failure to report insurance fraud to the Commissioner is considered a/an

If the father is disabled for more than 6 months

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

Cost of training a replacement

A key person insurance policy can pay for which of the following?

Revocable beneficiary

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

Automatic premium loan

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in the force. This is due to what provision?

10 days

A producer moves to another state and terminates her residency in Arkansas. The Arkansas producers license must be returned to the Commissioner within how many days?

Collect premiums for in-force policies and explain coverages written by the producer

A producer's daughter, who is unlicensed, works part time in her father's insurance agency. She may perform all of the following activities EXECPT

Upon conversion, the death benefit of the permanent policy will be reduced by 50%.

All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT

The premiums are invested in the insurer's general account

All of the following are ture about variable products EXCEPT

Benefits are paid to the borrower's beneficiary

All of the following statements are correct regarding credit life insurance EXECPT

Foreign

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Consideration

An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract

Authorized insurer

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Rebating

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

Contracts of adhesion

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

To service existing business

For what reasons can a temporary license be issued?

100% participation of members is required in noncontributory plans

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?

Within the policy

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than

Churning

If an agent advises a policyholder to replace an insurance policy but only does so for the purpose of making commissions, the agent has committed an act of

Authorized

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be

8%

In Arkansas, what is the maximum interest rate that may be charged by an insurance company on a policy loan?

Unilateral

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?

It is never legal to limit coverage based on martial status

In which of the following situations is it legal to limit coverage based on martial status?

Conditional Receipt

It is intended to provide coverage on a date prior to the policy issue

Misrepresentation

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Entire contract

The provision which states that both the policy and copy of the application form the contract between the policyowner and the insurer is called the

Spouse term rider

The ride is usually level term insurance

The Life and Disability Insurance Guaranty Association

To what organization must all admitted insurers belong?

For 20 years or until death, whichever occurs first

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

Must be informed of the source of the report

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Increasing Term

What type of insurance would be used for Return of Premium rider?

Purchase a single premium policy for a reduced face amount

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Receive a confirmation from the existing insurer.

When replacement is involved, a producer must do all of the following EXECPT

Life income with period certain

Which life insurance settlement option guarantees payments for the lifetime of the receipt, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

The earning in the plan accumulate tax deferred

Which of the following describes the tax advantage of qualified retirement plan?

The amount of premium payment

Which of the following information will be stated in the consideration clause of a life insurance policy?

Negotiating Claims

Which of the following is NOT an unfair trade practice

It needs irs approval

Which of the following is NOT true regarding a nonqualified retirement plan?

Pay-in period

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

Premiums are not tax deductible as a business expense

Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?

Variable Annuity

Which of the following products requires a securities license?

The policyowner is entitled to policy loans

Which of the following statements is correct regarding a whole life policy?

It begins when the policy is delivered

Which of the following the TRUE about the 10-day free-look period in a Life Insurance Policy?

Variable universal life insurance

Which of the following types of policies allows for a flexible premium and a variable investment component?

Target Premim

Which of the following would help prevent a universal life policy from lapsing?

Long term care

Which of the part following riders added to a life insurance policy can pay part of the death benefit to the insured to cover expenses incurred in a nursing or convalescent home?

Paid up option

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?

Replacement Rule

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

The employer is the owner and beneficiary

Who is the owner and who is the beneficiary on a key person life insurance policy?

Face amount

which policy component decreases in decreasing term insurance?