MN life insurance
When a producers change the address of their residence or office, the commissioner must be notified within
30 days
whole life policy is surrendered for a reduced paid up policy. the cash value in the new policy
Continue to increase
if a loan request is for payment of due premium on the policy how soon must the insurer issue a loan
Immediately
Which of the following is not true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
An annuitant pays the annuity premium on the 14th of each month. Which best describes the arrangement?
Level
Statements are true regarding installments for a fixed amount except
Payment stops when the annuitant dies
Variable insurance and variable annuities are regulated by
SEC, FINRA, and Departments of Insurance.
An insured decides to surrender his whole life insurance policy. The cash value at surrender is higher than the premiums paid into the policy, due to interest. What part of the surrender value would be income taxable?
The difference between the premiums paid and the cash value.
*what is the difference between a straight life policy and a 20 pay whole life policy?
The face amount and cash value
What happens to the face amount of a whole life policy if the insured reaches the age of 100?
The face amount is paid to the insured
All of the following are advantages of a qualified retirement plan EXCEPT
The income at retirement is tax free
When an insurer examination is ordered by the Commissioner, who pays for the cost of the examination?
The insurance company that is examined
All of the following are true of credit life EXCEPT
The insured names the beneficiary.
All of the following are true of the Survivorship Life policy EXCEPT
The premium is based on the age of each insured.
What is the purpose of settlement options?
They determine how death proceeds will be paid
If a license is revoked that person cannot apply for another license for another
2 years
Which of the following policies would not offer a policy loan option?
Term life
Which of the following statements regarding HIV testing is NOT true?
Test results must be sent to the department of insurance
Which riders pays a beneficiary a death benefit that is double or triple the face amount if the insureds death was caused by an accident as defined in the policy?
An accidental death rider
A new homebuyer wants to purchase a life insurance policy that would protect his family against losing the home, should he die before the mortgage was paid. The most inexpensive type of policy that would accomplish this need would be
Decreasing term
A producer lives and is primarily licensed in one state but wants to conduct business in a neighboring state. what type of license will allow the producer to do that?
Nonresident
1. Which of the following is consideration on the part of an insurer?
Paying a claim
A married couple wants to include the entire family in their whole life policy under one rider. What rider will help them achieve that goal?
Family term
What is the maximum fine for insurer who allow producers to transact insurance for them without appointments?
$25
In a commercial auto coverage policy, which of the following coverage forms applies to automobile transporting property for commercial enterprise
Motor Carrier
A distribution from an employer-sponsored retirement plan or from an ira is eligible for a tax-free rollover if it is reinvested in an IRA within
60 days
*all of the following are advantages of a qualified retirement plan except
The contribution is deductible to the employer
What is the maximum penalty per offense for transacting insurance without a certificate of authority?
$1,000
An insurance contract must contain all of the following to be considered legally binding EXCEPT:
Beneficiary's Consent
Which of the following kinds of group insurance is designed for groups of people who are exposed to a common hazard?
Blanket Life
In a variable life insurance policy, all of the following assets are held in the insurance company's general account EXCEPT
Cash Surrendered Value
In this state the owner gets a free look of a specified number of days from
Delivery of the policy
According to the common Disaster Clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who dies first, which of the following will be assumed?
The primary beneficiary died before the insured.
1. When producers change the address of their residence or office, the Commissioner must be notified within
10 days
Life settlement broker represents
The owner
*When may an insurer advertise its membership in the minnesota insurance guaranty association?
At no time
Which situation insurance interest does not exist?
A person insuring the life of his best friend
*According to the life insurance replacement regulations, which of the following would be an example of policy replacement?
a policy is reissued with a reduction in cash value
1. When an insurer tries to discourage a policyholder from replacing an existing policy this is called
Conservation Effort
To be valid, an insurance policy must have all of the following EXCEPT
Countersignature
1. Which of the following provisions is usually found in homeowners' policies and provides a replacement cost settlement to policyholders who carry adequate insurance?
Insurance to value
When comparing a joint life policy to two individual life policies of the same amount on the same insureds, which condition is true?
Joint life has a lower premium than the total of the two individual policies.
an agreement that is enforceable by law is known as what kind of contract?
Legal
What does an annuity protect the annuitant against
Living longer than expected
An applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer "no" to the question pertaining to heart problems. Their answer is considered to be a:
Representation
insurance policy provides insurance protection for the life of the insured and matures at the insured's age 100
Single premium whole life
The entire contract includes all of the following except
The life insurance policy
When replacement is involved, the replacing insurer must send a notice to the existing insurance company that identifies the insured and policies within how many days? a. 3 days b. 5 days c. 10 days d. 30 days
a. 3 days
Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination?
Charging the insured higher premiums based on their race.
An insurance form that requires a claim to be made during the policy period if it is to be covered by the policy is called a
Claim-made form
j works part time in her father's insurance agency but she doesn't have an insurance producer license. she may perform all of the following activities except?
Collect premium for in-force polices and explain coverages to clients that have existing polices written by her father
The owner of a whole life policy with an accidental death rider intentionally kills himself after having the policy for 18 months. What is the insurance company course of action?
Deny any payment of death benefit
Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer?
Disability
Which of the following is not a standard exclusion in life insurance policies?
Disability
An adjustable life policy can assume the form of
Either term insurance or permanent insurance
Which of the following criminal activities would be sufficient violation to warrant rejection, revocation or suspension?
Forgery
Which of the following is not a clause of loss form for commercial lines?
General
Life insurance and Annuity Replacement regulation applies to all of the following types of life products EXCEPT
Group life
All of the following information needs to be included on an application for life insurance EXCEPT
Health insurance policies in force
What is the purpose of a free-look period in insurance policies?
It allows the insured to reject the policy with a full refund.
1. Which of the following is True of level term insurance?
It is temporary protection.
Which of the following is true regarding pure life annuity settlement option?
It provides the highest monthly benefit
Which of the following best describes pure life of annuity?
It provides the highest monthly benefits.
An insurer that operates for one or more social, educational, charitable, benevolent, or religious purposes for the benefit of its members is known as a
Fraternal Insurer
A producer's license lapses. it can be reinstated without requiring the producer pass to the licensing exam again, provided that the producer applies for reinstatement within
12 months
An insured suffered a loss and notified her insurance company. the insurer must provide a claim form to the insured within
15 days
An individual recently lost her job. she intends to convert her group policy to an individual policy. In order to avoid proving insurability, the conversion must occur within
31 days
In replacement, an existing insurer must provide policyowners with a policy summary for existing life insurance within how many days of receiving the written communication and replacement?
5 days
For how long an insurance company is allowed to defer policy loan requests
6 months
An annuity has accumulated the cash value of $70,000, of which $30,000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive:
70,000
An insured misstates her age at the time of life insurance application is taken, resulting in
Adjustment in the amount of death benefit
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?
Extended term
An annuity owner receives the same guaranteed payment every month. What type of annuity is it?
Fixed
At what point would an automatic premium loan be generated?
Following the grace period
Which of the following terms refers to solicitation negotiation effectuation or advising related to an insurance contract?
Insurance transaction
The reduction of premium option uses the dividend to reduce
Next year's premium
All of the following are true regarding insurance policy loans EXCEPT
Policy loans can be made on policies that do not accumulate cash value
If a life insurance company uses HIV testing as a part of its underwriting, when must an applicant be notified of the procedure?
Prior to performance of the test
Insurers are forbidden to do all of the following with their advertisements EXCEPT
Promote interest in insurance coverage.
A whole life policy that will generate immediate cash value is a?
Single premium policy
1. Which of the following policies would NOY offer a policy loan option?
Term life
All of the following are consideration in an insurance policy except
The Statements on the policy
1. Variable life insurance is regulated by all of the following entities EXCEPT
The U.S Department of Treasury.
Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application?
The application contains material misstatements
Accumulation at interest option except
The interest is not taxable since it remains inside the insurance policy
with adjustable life, the owner can change all of the following except?
The length of time the cover will last
Which of the following statements concerning the medical information bureau is correct
The medical information bureau assists underwriters in evaluating and classifying risks.
Which of the following is true regarding a joint life annuity?
The payment stops at first death.
Which of the following is true regarding premium in a 10-year level premium policy?
The premium will remain level for 10 years.
As a part of the policy approval process the commissioner may require the insurer to provide all of the following EXCEPT
The producer's commissioner schedule
If an applicant submits the initial premium with an application, which action constitutes acceptance?
The underwriters approve the application
Which of the following is true regarding the cash value life insurance policies?
There are no cash value
What is the purpose of key person insurance?
To cover decreased business revenues as a result of the death of a key employee
An agent tells an insured that if he replaces his current insurance policy with a new one, his dividends will be higher and his premiums will be slightly lower. The policy, however, would not offer either one of these things. What type of misrepresentation is being committed?
Twisting
because of an injury an insured has been unable to work for 9 months. he paid the policy premium for his life for the first 6 months of disability, but didn't have to pay anything for the remaining 3 months, yet the policy remained in force. the policy include
Waiver of premium rider
Which of the following types of insurance policies would perform the function of cash accumulation?
Whole life
Guaranteeing future dividends is considered to be an unfair or deceptive act known as
misrepresentation
Contributions to Roth IRAs are
not tax deductible
Which of the following would not be eligible for coverage under key person?
owner of a shop
A life insurance policy qualifies a Modified Endowment Contract (MEC) if the amount of premium paid exceeds the amount that would have provided paid-up insurance in how many years?
7 years
which of the following cannot obtain a temporary license?
An employee of a retiring producer until the training of the new personnel is complete
Which of the following employee benefits essentially provides the employee with a wage increase and directs that wage increase to be spent on a life insurance policy?
Executive bonus
Which terms defined the reduction of value of the person or property insured in a policy?
Loss
The purpose of the fair credit reporting act is to
Protect the insurer from adverse selection
No life insurance policy or certificate may be issued or delivery by an insurer organized in Minnesota until it has been approved by
The Insurance Commission
*What does the application of contract of adhesion mean
The holder of the contract has the ultimate power of promise
All of the following are dividend options EXCEPT a. reduction of premium b. paid-up addiction c. fixed period installments d. accumulated at interest
c. fixed period installments
Which of the following is a correct statement about annuities?
fixed annuities do not provide protection against inflation.
a producer's license lapses. it can be reinstated without requiring the producer pass to the licensing exam again, provided that the producer applies for reinstatement within
12 months
An insured has 2 property policies in force covering the same risk. when a loss occurs, which of the following policy provisions states that each policy will pay the same proportion of its limits to the overall coverage?
Appraisal
1. When may an insurer advertise its membership in the Minnesota Insurance Guaranty Association?
At no time
Contracts prepared under one party on a take it or leave it are classified as -
Contracts of Adhesion
Which of the following is/are correct regarding SIMPLE plans?
Contributions and earnings are tax-deferred until funds are withdrawn.
During policy solicitation, an insurer exaggerates the financial condition of one of its competitor and makes it sound worse than it is. This is an example of?
Defamation
Change need to make to the application for insurance, the agent may do all the following except
Erase the incorrect answer and record the correct answer
All of the following are true about group life insurance except
Evidence of insurability is usually not required.
According to the Fair Credit Reporting Act, all of the following statements are true EXCEPT
If an applicant is declined for an insurance policy, he or she has no right to know what was in the report.
Purpose of conditional receipt -
Intended to provide coverage prior to policy issue.
How does insurance distribute the financial consequences of individual losses?
It transfers the risk to all people insured
Which riders covered expenses incurred in nursing or convalescent home?
Long term care
On the advertisement, a company claims that it has fund in its possessions that are in fact not available for the payment of losses or claims. The company is guilty of
Misrepresentation
Which of the following is not correct regarding death proceeds of life insurance?
The insured's creditors may claim the proceed from life insurance policy of the deceased insured
Which of the following is true regarding the cash value in term life insurance policies?
There are no cash values
*all of the following statements about indexed whole life insurance are correct except
There is a guaranteed minimum interest rate
When an insured terminates membership in the insured group, the insured can convert to
Whole life without proof of insurability
1. an insured has a life insurance policy in the amount of 250 000 naming his wife as beneficiary. upon his death, his beneficiary decides not to received the death benefit for some time, when she finally receives the death benefit check it's in the amount of 250530. is any portion of the proceeds that the beneficiary receives taxable?
Yes, proceeds in excess of face amount are taxable as interest.
what is the purpose of a free-look period in insurance policies? a. it allows the insurer to cancel coverage if a misrepresentation is discovered. b. It allows the insured to reject the policy with a full refund. c. it allows the insured 10 days to pay the initial premium. d. it allows the insurer to temporarily suspend coverage after an insured's disability.
b. It allows the insured to reject the policy with a full refund.
Which of the following is not a duty of the Commissioner? a. Issue an insurance license for a producer b. Make state insurance laws c. Handle insurance-related consumer complaints d. Enforce state insurance laws
b. Make state insurance laws
If a loan request is for payment of the due premium on the policy how soon must the insurer issue a loan?
immediately
The policy owner may skip a premium payment without lapsing the policy as long as
the policy contains sufficient cash value at the time to cover the cost of insurance for that premium period.
which of the following is not true regarding the accumulation period of an annuity? a. it is also known as the pay-in-period. b. it would not occur in a deferred annuity. c. it allows the insured 10 days to pay the initial premium. d. it allows the insurer to temporarily suspend coverage after an insured's disability.
b. it would not occur in a deferred annuity.
When is the earliest a policy may go into effect? a. When the first premium is paid and the policy has been delivered. b. When the insurer approves the application c. After the underwriter reviews the policy d. When the application is signed and a check is given to the agent.
d. When the application is signed and a check is given to the agent.
An insurance contract must contain all of the following to be considered legally binding EXCEPT: A: Consideration B: Competent Parties C: Beneficiary's Consent D: Offer and Acceptance
C. beneficiary's consent
An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done?
Misrepresentation
All of the following are true of annually renewable term insurance except
The death benefit remains level
All of the following information needs to be included on an application for life insurance EXCEPT: a. Medical information about the applicant b. Health insurance policies in force .c. Life insurance with other insurers. d. The agent's statement, if applicable.
b. health insurance policies in force
In whole life insurance, when is the policy cash value schedule to equal the face amount?
At the insured's age 100
dividends received on participating life insurance policies are
Not taxable because they are a return of unused premiums.
Which statement best describes agreement as it relates to insurance contracts?
One party accepts the exact terms of the other party's offer.
Variable insurance and variable annuities are regulated by
SEC and FINRA only
Under the nonforfeiture option, the policy cash value is converted to
Same face amount as the whole life policy
Which of the following is NOT a power held by the commissioner?
Set the premium rates for insurance sold in this state.
An individual receives a lump sum inheritance. He would like to use the money to create a lifetime income but will be retiring soon. He purchases an annuity and wishes to receive payments beginning in 2 months. What did he buy?
Single premium deferred annuity
A whole-life policy that will generate immediate cash value is a
Single premium policy
A group life insurance policy is issued to
The head of the applying group.
When is an insurer examination ordered by the commissioner who pays for the cost of the examination?
The insurance department
Which of the following is not an indicator of a competent party
Business profession
An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?
3 days
Licensees must report of any action taken against them in another jurisdiction or by another government agency in Minnesota within how many days of the final disposition of the matter?
30 days
If, after a hearing, it is determined that an insurer or producer is violating Minnesota insurance laws, the commissioner will issue
A cease-and-desist order.
Which of the following would be considered an unfair claims settlement practice?
A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered.
What is the maximum loan amount a policyowner may withdraw from a variable universal life insurance policy?
An amount not exceeding the cash value
a group life insurance policy is issued to?
Both
Which distribution from a modified endowment contract would be taxable as income at the time received to the extent that the cash value of the contract immediately before the payment exceeds the investment in the contract?
Both partial surrender and policy loan
In which instances would the premium be tax deductible
Premium paid by an employer on 30,000 group term life insurance plans for employees
If the consumer challenges the accuracy of the information contained in the consumer or investigative report, the reporting agency must
Respond to the consumer's complaint
in contrasting stock insurers with mutual insurance which statement is true
Stock insurers are owned by the shareholders and issue nonparticipating policies
Which of the following are characteristics of term life insurance?
Temporary protection, renewability, no cash value
Who is the annuity owner?
The person who purchases the annuity
While completing a life insurance application the applicant realizes that she should have answered an earlier question differently. What should the agent do to make the necessary change?
Cross out the incorrect information, write in the correct answer, and have the applicant initial the change
Which of the following is required in order for a plan to be qualified?
The plan must be formally written and communicated to the employees
To be valid an insurance policy must have all of the following except
consideration
while completing a life insurance application the applicant realizes that she should have answered an earlier question differently. What should the agent do to make the necessary change?
cross out the incorrect information, write in the correct answer, and have the applicant initial the change.
*which of the following types group are not eligible for coverage under a group life insurance policy
Neighborhood group formed to purchased group insurance
Not a power given to the commissioner
Set the insurance rate to be charged
Initial amount of credit life insurance does NOT exceed -
The amount repaid under the contract
Another name for interest-sensitive whole life insurance
Current assumption life
A license Minnesota insurance producer must notify the Commissioner of a change of address within a. 10 days b. 30 days c. 5 business days d. 7 days
a. 10 days
Written or oral statements made by the applicant are
Considered true to the best of the applicant's knowledge
In order to get a nonresident license in this state producers must
Apply and pay a fee to a nonresident state that reciprocates.
1. Which of the following is NOT true regarding a deferred annuity?
Income payment begin within 1 years from the date of purchase.
In Minnesota, policy issued without containing, bold-face type, the policy owner's right to cancel (free look), to get full refund, the policy must be return within
1 year
In replacement, an existing insurer must provide policy owners with a policy summary for existing life insurance within how many days?
10 days
If the producer's license lapses, how much time to apply for reinstatement without taking exam?
12 months
The insured can return the policy for a full refund if the insured is dissatisfied with the policy.
Free-look period
A couple's retirement annuity pays them 250/month. The husband dies and the wife continues to receive 125/month until she dies. What settlement option they chose?
Joint and survivor
An insurance company that is owned by the policyholders is called a
Mutual Insurer
All of the following statements about mutual insurance companies are correct EXCEPT
Policy dividends issued by mutual companies are guaranteed and not taxable
which of the following individuals would be a likely candidate to purchase a deferred annuity
Someone who wants to grow retirement funds for tax deferred
Which of the following is true about credit life insurance
Creditor is the policy owner
During policy solicitation an insurer exaggerates the financial condition of one of its competitors and makes it sound worse than it is. This is an example of an unfair trade practice called? a. Twisting b. False advertising c. Controlled business d. Defamation
Defamation
*insurers are forbidden to do all of the following with their advertisements except
Use word or phases that exaggerate the terms of the policy
Which method of dealing with risk is applied when insurance is purchased
Transfer
*Dividends received on participating life insurance policies are
Not taxable because they are a return on your investment
1. *What effect will the long term care (LTC) rider have on the death benefit of life insurance policy if ltc benefits were paid to the insured
Reduce the death benefit
A wife wants her husband as the beneficiary and ownership of her policy, the policy owner should name her husband as
Revocable beneficiary
An individual has a $200,000 convertible term insurance policy. If he chooses, he can convert to:
A whole life policy for the same face amount without proof of insurability.
Insurers Insurer CANNOT transact insurance in this state without a
Certificate of authority
An insured has 2 property policies in force covering the same risk. when a loss occurs, which of the following policy provisions states that each policy will pay the same proportion of its limits to the overall coverage?
Pro rata
Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?
Stock
Which of the following has the right to change a settlement option in a life insurance policy?
The policy owner at any time during the life of the insured
Which of the following would be considered an unfair claims settlement practice. a. requesting the insured to submit a signed, proof of loss statement, after the insured has already verbally advised the insurer of the claim. b. requesting the insured swear under oath concerning the facts of the claim. c. the settlement of the claim is delayed for 30 days in order for the insured to conduct an investigation. d. A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered.
d. A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered.
Example of liquidity in life insurance
Cash value available to policyowner
All of the following are true regarding insurance policy loans EXCEPT a. Policy loans can be made on policies that do not accumulate cash value. b. the amount of the outstanding loan and interest. c. The policy will terminate if the loan plus interest equals or exceeds the cash value of the policy. d. policy owners can borrow up to the full amount of their whole life policy's cash value.
a. Policy loans can be made on policies that do not accumulate cash value
What is the purpose of a conditional receipt? a. it serves as proof that the applicant has been determined insurable. b. it is given only to applicants who fully prepay the premium. c. It is intended to provide coverage on a date prior to the policy issue. d. it guarantees that a policy will be issued in the amount applied for.
c. It is intended to provide coverage on a date prior to the policy issue.
To what organization must all admitted insurers belong? a. the Minnesota Insurance Guaranty Fund b. The Minnesota Association of Insurers c. The insurance Guaranty Association d. The National Association of Insurance Commissioner (NAIC)
c. The Insurance Guaranty Association
In an annuity, accumulated money is converted into a stream of income during
Annuitization Period
All of the following are true of credit life except
The creditor is the policy owner
Partners in a business want to make sure that if one of them were to pass away, their surviving family will receive a fair value for their portion in the business. what life insurance arrangement would be most suited for transitioning the business?
Buy-Sell agreement
The portion of a loss that is considered the responsibility of the insured is
Deductible