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Equity Indexed Annuities

They are required by state law to be included in policy

Which of the following is TRUE about nonforfeiture values?

The owner of the original life policy

As it relates to life settlements, the term "owner" means

2 years.

Except for nonpayment of premiums, the validity of a group life insurance policy cannot be challenged after the policy has been in force for a period of

Hedge against inflation.

Fixed annuities provide all of the following EXCEPT

Employees.

For a retirement plan to be qualified, it must be designed for the benefit of

6 months

For how long is an insurance company allowed to defer policy loan requests?

4 years

For how long must producer maintain records of completing continuing education?

A separate account

For variable products, underlying assets must be kept in

Coercion.

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

36

How many continuing education credit hours must be completed during each licensing period?

30 days

How many days notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans?

5 days

If a consumer requests additional information concerning an Investigative Consumer Report, how long does the insurer or reporting agency have to comply?

With the policy.

If a policy includes a free-look period of at least 10 days, the Buyer's Guide must be delivered to the applicant...

$2500

If an individual willfully violates provisions of the Fair Crediting Reporting Act, what is the maximum civil penalty?

Purchase all existing contracts issued under the insurer.

If an insurer becomes insolvent, the Iowa Life and Health Guaranty Association will do all of the following EXCEPT

75%

If part of the premium from an employee provided plan is to be paid from funds contributed by the insured employees, what percentage of the eligible, insurable employees must elect to make the required contributions?

The insured's financial classification.

Illustrations used in the sale of life insurance policies must contain all of the following EXCEPT

100

In Iowa, a group insurance policy issued to trustees of a fund established by two or more employers must cover how many eligible, insurable employees at the time of the issue?

Any group that conforms to one of the descriptions of eligible groups as established by the Insurance Division or that receives special approval from the Commissioner.

In Iowa, group insurance may be written to provide insurance coverage for

Apply and pay a fee to a nonresident state that reciprocates

In order to get nonresident license in that state a producer must

Fixed Amount

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?

Premium receipt

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a

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

An Equity Indexed Annuity will grow based upon

Performance of a recognized index

The premium is level

Regarding the premium in term policies

5 years

Replacing insurers must keep a copy of all Notices Regarding Replacement received for

Whenever necessary in order to enforce insurance laws and regulations

The Commissioner may examine an insurer's records

Annually Renewable Term

The LEAST expensive first-year premium is found in which of the following policies?

$100,000

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

As it relates to life settlements, the term "owner" means

The owner of the original life policy

The death benefit can be increased by providing evidence of insurability.

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

Lower.

The premium of a survivorship life policy compared with that of a joint life policy would be

Insuring Clause

The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called the

Insurable Interest

To purchase insurance, the policy owner must face the possibility of losing money or something of value in the event of loss. What is this concept called?

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

Signed waiver of premium.

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Face amount

What does "level" refer to in level term insurance?

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured

What does the application of contract of adhesion mean?

The original age is used for premium determination.

What is the advantage of reinstating a policy instead of applying for a new one?

180 days

What is the maximum amount of time that a person can have a temporary producer's permit?

Viator

What is the name for the owner of a life insurance policy who enters into a viatical settlement contract?

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

What is the purpose of a conditional receipt?

Make sure the recommendation is suitable for the client

What must a producer do before recommending the purchase, sale, or exchange of a life insurance policy?

Suicide is excluded for a specific period of years and covered thereafter.

What statement about a suicide clause in a life insurance policy is true?

Interest only

When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?

Extended term

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Consideration

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

A viatical settlement

Which of the following allows someone living with a life threatening condition to sell their existing life insurance policy and use the proceeds before their death?

Payor Benefit

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

The earnings in the plan accumulate tax deferred

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

A person who secures information for enrolling individual into a group insurance

Which of the following individuals engaged in the business of insurance would NOT be required to be licensed?

Whole Life

Which of the following insurance products are covered under solicitation regulations of the Insurance Code?

Disability

Which of the following is NOT a standard exclusion in life insurance policies?

Money borrowed from the cash value is taxable.

Which of the following is NOT true regarding policy loans?

Creditor is the policyowner.

Which of the following is TRUE about credit life insurance?

The interest rate is no greater than the rate used to compute the cash surrender value of the policy, plus 1% per year.

Which of the following is a permissible adjustable policy loan interest rate taken out in connection with a life insurance policy?

They have a guaranteed minimum interest rate.

Which of the following is a similarity between equity indexed annuities and fixed annuities?

Telling a client that his first premium will be waived if he purchases the insurance policy today

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

Failure to promptly settle a claim when liability has been clearly established

Which of the following is an example of an unfair claims settlement practice?

To create an estate

Which of the following is the best reason to purchase life insurance rather than annuities?

Cash values grow tax deferred

Which of the following is true of the taxation of cash values in a business life insurance policy?

It may last for the lifetime of the annuitant.

Which of the following is true regarding the annuity period?

It creates an immediate estate

Which of the following statements describes one of the reasons individuals purchase life insurance?

Test results must be sent to the Dept. of Insurance

Which of the following statements regarding HIV testing is not true?

Withdrawals are not taxable

Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE

The person giving an endorsement will be paid

Which of the following statements would be allowed in advertising of a life insurance policy?

Dividend

Which of the following terms is used to name the nontaxed return of unused premiums?

Decreasing term

Which of the following types of insurance policies is most commonly used in credit life insurance?

Both the guarantee that the principal and interest will be fully paid out

Which of the following would be TRUE of both the fixed period and fixed amount settlement options?

A trustee of an employee trust plan that is compensated indirectly by the company issuing the contract

Which of the following would be required to obtain a producer's license in this state?

Face amount

Which policy component decreases in decreasing term insurance?

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?

Applicants who require a larger death benefit in the future should buy convertible term insurance.

Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicants needs?

One party accepts the exact terms of the other party's offer

Which statement best describes agreement as it relates to insurance contracts?

The Insurance Commissioner

Who supervises the Iowa Life and Health Guaranty Association?

The insured

With adjustable life, the owner can change all of the following EXCEPT

Joint and Survivor

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policy owner select?

Executive bonus.

is an arrangement where the employer offers to give the employee a wage increase in the amount of the premium on a new life insurance policy on the employee.

Cash value guarantees in a whole life policy are called

nonforfeiture values

When the insured reaches age 100

When would a 20-pay whole life policy endow?

If it is intentional and material

When would a misrepresentation on the insurance application be considered fraud?

Paid-Up Additions

Which dividend option will increase the death benefit?

Funds exceeding the premium paid are taxable as ordinary income.

Which is true about the cash surrender nonforfeiture option?

The policyowner

When making a recommendation for a group life insurance policy, who must the producer regard when determining the suitability of a particular policy?

At no time

When may an insurer determine its own maximum interest rate for life insurance policy loans?

The insured may choose to convert to term or permanent individual coverage.

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

Companies that have appointment them to act as Insurance producers

Insurance producers can only receive commissions for Insurance written with

Separate accounts.

A domestic insurer issuing variable contracts must establish one or more..

Completing the affairs of an insurance producer

A temporary producer's license may be used for which of the following?

A percentage of the face amount of the policu

A viatical settlement is a transaction outside the life insurance company where the owner sells the life insurance policy for which of the following?

A percentage of the face amount of the policy

A viatical settlement is a transaction outside the life insurance company where the owner sells the life insurance policy for which of the following?

The primary beneficiary died before the insured

According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

A policy is reissued with reduction in cash value

According to the life insurance replacement regulations, which of the following would be an example of policy replacement?

The Insurance division

After a hearing, who issues the written order resolving the factual issues presented in a hearing and stating what remedial action is necessary?

The interest is not taxable since it remains inside the insurance policy.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

Premiums are determined by the age, sex and occupation of each individual certificate holder.

All of the following are characteristics of group life insurance, EXCEPT

Sharing commissions.

All of the following are considered unfair trade practices in the business of insurance EXCEPT

The premiums are invested in insurer's general account

All of the following are true about variable products EXCEPT

Reports may be sent to anyone who requests one

All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT

The Guaranty Association.

All of the following entities regulate variable life policies EXCEPT

Benefits are paid to the borrower's beneficiary.

All of the following statements are correct regarding Credit Life Insurance EXCEPT

Either term insurance or permanent insurance.

An adjustable life policy can assume the form of

The insurer will pay the full death benefit from the group policy to the beneficiary.

An employee quits his job on May 15 and doesn't convert his group life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. What best describes what will happen?

Common Disaster

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

$50,000

An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out?

Cash Option

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Authorized insurer.

An insurer that has received a Certificate of Authority from the Department of Insurance to transact insurance in the state.

Reduction of premium

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

It insures the life of a debtor.

Which of the following is correct regarding credit life insurance?

A whole life policy is surrendered for a reduced paid up policy. The cash value in the new policy will

continue to increase