life test pt 3
Producers are allowed, by law, to hold client premiums for no more than how many days?
90 days
A person is in the process of becoming permanently licensed as a producer. A temporary producer's license may be issued for a maximum period of
90 days.
In an annuity, the accumulated money is converted into a stream of income during which time period?
Annuitization period
Which of the following best describes fixed-period settlement option?
Both the principal and interest will be liquidated over a selected period of time.
Which of the following features of the Indexed Whole Life policy is NOT fixed?
Cash value growth
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
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?
Consumer report
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated.
What type of insurance would be used for a Return of Premium rider?
Increasing Term
All of the following are true about the bond requirements in the state of Illinois EXCEPT
Insurance producers with insurance companies that take responsibility for their actions are still required to post a bond.
Which of the following defines the term "controlled business"?
Insurance written on the interests of the producer or his/her spouse
Which of the following policy components contains the company's promise to pay?
Insuring clause
Which of the following is TRUE about the 10-day free-look period in a Life Insurance policy?
It begins when the policy is delivered.
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.
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
Pay a reduced death benefit
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?
100% participation of members is required in noncontributory plans.
If an insured requests forms that are necessary to present a claim, within how many working days must the insurer provide the forms?
15
Which of the following may NOT be included in an insurance company's advertisement?
That its policies are covered by a state Guaranty Association
All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT
The employer can receive a current tax deduction for any contributions made to the plan.
With which entity must a corporation register before it will be allowed to operate as an insurance agency?
Director
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.
Which of the following is an example of an unfair claims settlement practice?
Failure to promptly settle a claim when liability has been clearly established
All of the following are dividend options EXCEPT
Fixed-period installments.
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?
Joint Life Policy
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
Misrepresentation.
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 fixed-period settlement option?
To provide a guaranteed income for a certain amount of time
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
Universal life
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant
With the policy.
An applicant receives a temporary insurance producer license. After 80 days, the owner of the insurance company decides to sell the business. Which of the following is TRUE?
The license will automatically terminate.
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing term
Which of the following is another term for the accumulation period of an annuity?
Pay-in period
Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?
Premiums are not tax deductible as a business expense.
Under standard circumstances, at what point should a Buyer's Guide be distributed to a prospective buyer?
Prior to the initial premium
When would a 20-pay whole life policy endow?
When the insured reaches age 100