Life - Unit Tests

Industrial life insurance is a form of life insurance written under policies having a face amount of...

$3,000 or less

The required free look period fo a life insurance policy in KY is...

10 days

An applicant for a resident agent license must be at least...

18

Temporary licenses are effective for an initial period of...

180 days

Alice decides to buy a policy. She pays the first premium; the producer issues a receipt and tells her that she is covered immediately, until she is notified that the policy is either issues or declined. What kind of receipt has Alice received?

Binding

Which of the following does NOT have an impact on insurance premium rates? A. Mortality or morbidity B. Interest rates C. Producer certification D. Expenses

C. Producer certification

Social Security provides benefits for... A. disability B. death C. retirement D. all the above

D. all the above

A social device for spreading the chance of financial loss among large number of people is the definition of....

Insurance

When does a surviving family have the greatest need for income?

While children are growing up

Human life value can be expressed as a...

dollar valuation

Which of the following is NOT likely to be contained in a MIB report? A. Jones report a heart condition on an insurance application 2 years ago B. Smith was tuned down for insurance by 2 companies in the past year C. Green's information has been requested 14 times in the previous 2 years D. Brown reported a hobby as a flight instructor a year ago

!!!!!! (U13#5)

Under which option does the insurer hold the death proceeds for a specified period of time and pay th ebeneficiary a guaranteed rate of interest on the proceeds at regular intervals?

!!!!!!!!!!!! #4 UNIT 10

An agent must notify the Commissioner of a change in the agent's legal name or address within...

30 days

Which of the following statements regarding annuitites is NOT correct? A. Generally, annuity contracts issued today require fixed, level funding payments B. Annuities are sold by life insurance agents C. An annuity is a periodic payment D. Annuitants can pay the annuity premiums in a lump sum

A. Generally, annuity contracts issued today require fixed, level funding payments

In determining SS retirement benefits, what is true?

C, the PIA is determination of the amount equal to the worker's full retirement benefit at his full retirement age. (U21#4)

All of the following are usually included in a final expense fund when determining life insurance needs of a family EXCEPT: A. Last illness and funeral costs B. outstanding debts C. funds to pay of a mortgage D. unpaid federal and state taxes

C. funds to pay of a mortgage

Which of the following actions may the Commissioner take if an applicant provides misleading information in the application for a license? A. Refuse to issue the license B. Suspend the license if it has already been issued C. Impose a civil penalty D. All of the above

D. ALL

Which of the following insurance policies would be considered controlled business? A. Insurance written on an agent's own life B. Insurance written on the life of an agent's child C. Insurance written on the life of an agent's partner D. All of the above

D. ALL

Brenda decides she wants to buy a policy. She fills out the application buy does not pay th einitial premium. What kind of receipt will Brenda receive?

Inspection Receipt ? (#2, U11)

When the producer delivers Ashley's insurance policy, he requires A to sign a health statment verifying tha tno change in health has occured since the date of the application. When the application was filled out, what type of receipt did Ashley probably recieve?

Inspection receipt !!!! (U12#7)

Horace wants his $85,000 life insurance policy arranged to pay his wife a monthly income if he dies first, but most or all of the proceeds to go to their two children after her death. Which of the following settlement options could Horace select to provide income for his wife and conserve the proceeds for the children?

Interest-only option

NEED #3 UNIT 10

NEED #3 UNIT 10

If a person's license has been revoked twice, when may the person be issued a new license

NEVER

Self-Insurance is an example of which method of handling risk?

Retention

A 25 year old who drinks occasionally, does not smoke, and does not have any known health problems, would probably be classified by an insured as a

Standard Risk

All of the following are advantages of life insurance as property EXCEPT: A. the death proceeds create an instant estate B. the death proceeds payable to a beneficiary are protected from the insured's creditors C. the death proceeds are exempt from federal estate tax D. the policy's value is guaranteed

The death proceeds are exempt from federal estate tax

Which of the following questions may an insurer properly ask an applicant? (HIV)

Whether the applicant has ever tested positive for HIV infection

Under a fixed-period life insurance settlement option, excess interest will:

!!!!!!!!!!!!!!! #5 UNIT 10

James died after receiving $180 monthly for six years from a $25,000 installment refund annuity. His wife, Lucy, as beneficiary, now will receive the same monthly income until her payments total...

$ 12,040

Before he died, Gary recieved a total of $9,200 in monthly income payments from his $15,000 straight life annuity. He also was the insured under a $25,000 life insurance policy that named his wife Darlene as primary beneficiary. Considering the two contracts Darlene would recieve death benefits totaling...

$25,000

To avoid having to take another examination an agent who allows his license to lapse must reinstate the license within...

12 months from the due date of the renewal fee

Bill is self-employed. The FICA tax rate for Bill is

15.3%

When a husband and wife are insured jointly under a credit life insurance policy the premium may not exceed...

150% of the rate permissible for a single life

The premium tax imposed on unauthorized insurance business transacted in KY is what percentage of gross premiums?

2%

The KY CE requirement for each continuing education biennium is...

24 hours of course

An applicant for a license as an insurance consultant must be at least...

25

Ellen works part time to supplement her family's income. In 2007, she earns $4,000 and works at least part of every month. With how many quarters of coverage will she be credited for.

3

How long must insurers maintain advertisements in their files?

3 years

If a life insurance policy replaces an existing policy, the insured has the right to surrender a new policy for a full refund of all premiums within...

30 days after delivery

A temporary license as an apprentice adjuster may be issued for a period of up to...

365 days

Resident agents must keep records of all business transactions under their licenses for at least...

5 years

Which of the following would be a source of instant liquidity upon the death of an estate owner?

A life insurance policy on the estate owner's life, payable to the estate.

An incorporated insurer with its capital divided into shares and owned by its shareholder is...

A stock insurer**

Which of the following is generally a prerequisite to reinstating a life insurance policy that has NOT been surrendered for its cash surrender value?

A written application Evidence of insurability Payment of premiums in arrears, with interest ALL OF THE ABOVE

If a fraternal benefit society provides benefits on the lives of children, the agent requirement for adult membership may not be less than age...

A. 15

Which of the following persons is ineligible for Social Security survivor benefits? A. Friend B. Unmarried child younger than 16 C. Disabled child younger than 22 D. Dependet parent, 62 or older

A. Friend

Which of the following risks is most likely to be insurable? A. George is concerened about the financial impact his premature death would have on his family B. Talia is concerned about the financial impact large betting losses at the horse track will have on her retirement savings C. John is concerened about the financial impact on his savings when his care eventually becomes worn enough to need to be replaced D. Jewel is concerned about the financial impact losing her hat would have on her weekly spending monday

A. George is concerened about the financial impact his premature death would have on his family

The initial amount of credit life insurance may NOT exceed

A. a total amount repayable under the contract of indebtness

The maxiumum amount that the KY Life and Health Insurance Guaranty Association will cover with respect to any one life is...

B. $300,000

Which of the following statements regarding annuity payout options is NOT correct? A. Under a straight life annuity option, all annuity payments stop when the annuitant dies B. In a cash refund annuity, upon the annuitant's death the beneficiary always receives an amount equal to the beginning annuity fund C. A period certain annuity guarantees a definite number of payments D. Joint and Survivor annuities guarantee payments for the duration of 2 lives.

B. In a cash refund annuity, upon the annuitant's death the beneficiary always receives an amount equal to the beginning annuity fund

Which of the following statements about submitting the application, premium, and other forms to the insurance company is TRUE? A. the application and any qyestionnaires must be signed by the beneficiary B. the producer must keep accurate records of all transactions involving the applicant's money C. Because coverage is effective immediately, it is not necessary to send the forms to the home. D. A life insurance policy may only be issued as applied for or rejected

B. the producer must keep accurate records of all transactions involving the applicant's money !!!!! (U12#8)

A person who wants to convert a group life insurance policy to an individual policy because of termination of employment must pay the first premium to the insurer within how many days after termination of eligibilty under the group policy?

C. 31 (U23#5)

Which of the following statments about variable annuities is NOT correct? A. Individuals selling variable annuities must be registered with NASD B.The contract owner, rather than the insurer, bears the investment risk C. Once a variable annuity contract has been annuitized, the amount of annuity income will not fluctuate. D. During the accumulation period, the annuitant's contributions are converted to accumulation units and credited to her account

C. Once a variable annuity contract has been annuitized, the amount of annuity income will not fluctuate.

What kind of receipt is most commonly used in life insurance?

Conditional

Camielle decides to buy a policy. She pays the first premium and the producer issues a receipt and tells her that she is covered immediately, unless the company decides she would have been a substandard risk. What kind of receipt did Camielle recieve?

Conditional receipt

Which of the following is excluded from coverage by the KY Life and Health Insurace Guaranty Association? A. Any portion of a policy not guaranteed by the insurer B. A claim based on marketing materials C. All claim based on misrepresentations regarding policy benefits. D. All of the above

D. All of the above

Which of the following statements about annuities is CORRECT: A. most annuities do not guarantee a death benefit if the annnuitant dies before payout begins B. Deferred annutities are used primarily to accumulate funds for retirement C. Immediate annuities can be funded with payments made over an extended period of time. D. The amount of an individual's annuity payments depends on how much principal was invested, the amount of interest earned, and the income period selected.

D. The amount of an individual's annuity payments depends on how much principal was invested, the amount of interest earned, and the income period selected.

Which of the following statements pertaining to life insurance policy settlement options is NOT correct? A. By using the interest-only option, 2 or more settlement options cna be combined for added flexibility B. Payments under the interest only option may be made at a rate higher than the guaranteed min. C. Diane and Rhonda are each receiving monthly income from their deceased husbands' identical life insurance policies under the fixed-income period option. Diane's payments are to be made for 15 years and Rhonda's for 20 years. Diane recieves the larger monthly D. Under the fixed-period option, the payment of excess interest will lengthen the payment period

D. Under the fixed-period option, the payment of excess interest will lengthen the payment period

All of the following are dividend options EXCEPT: A. buying paid up additions B. applying dividends against premium payments C. leaving dividends to accumulate at interest D. assigning dividends to pay off a mortgage

D. assigning dividends to pay off a mortgage

Which of the following terms refers to that period following the death of a breadwinner during which th children are living at home?

Dependency period

Under KY law, an insurer formed under tha laws of Michigan is considered to be...

Foreign insurer

Joanna and her husband, Tom, have a $40,000 annuity that pays them $200 a month. Tom dies and Joanna continues receiving the $200 monthly check as long as she lives. When Joanna dies, the company ceases payment. This is an example of

Joint and full survivor

Which of the following would NOT be an example of insurable interest

Juan wishes to take out a life insurance policy because his neighbor is a careless driver who Juan thinks is likely to die in a car accident

Which of the following dividend options produces a result similar to taking dividends in cash and depositing them in a bank savings account?

Leaving dividends to accumulate at interest

What annuity payout option provides for lifetime payments to the annuitant but guarantees a certain minimum term of payments, whether or not the annuitant is living?

Life with period certain

Lee applies for a policy, pays the initial premium, and receives a conditional receipt on March 14. On March 15, he passes the medical exam with flying colors. On March 16, an undiagnosed brain aneurysm bursts, killing Lee instantly. On March 17, the insurer receives the results of the medical exam, which includes no information about the aneurysm. On March 19, the insurer receives the notice of claims. The insurer will...

Pay the claim

Rich applies for a policy, pays the initial premium, and receives a binding receipt on Friday, Sept 1. On Monday, Sept 4, the underwriting dept decides not to issue the policy and places the file in a pile for notification letters to be sent out at the end of the week. On Wed, Sept 6, Rich is killed in an auto accident. On Thurs., Sept 7, the insurer receives the notice of claim. The insurer will...

Pay the claim because a binding receipt ensures coverage until the potential insured is notified of a rejection.

If an applicant is rated or declined an insurance policy, the reasons for this decision will be explained to the applicant by the...

Producer/Agent

Which of the following statements regarding ways to determing the proper amount of life insurance is CORRECT?

The needs approach takes into account family financial goals, such as college education for children or retirement income for a surviving spouse.

With regard to a breadwinner's death, the blackout period generally can be defined as...

The period beginning when the youngest child is grown until the surviving parent's retirement

Which of the following statements is CORRECT with regard to policy dividends?

They are a result of favorable operating expenses or investment income.

Arnold buys a $25,000 participating whole life policy. He has a definite need for more life insurance, but believes he cannot afford it. Which of the following dividend options would help to solve this problem automatically?

Using dividends to buy paid-up additions

The Commissioner of Insurance is...

appointed by the governor with the consent of the senate