PEARSON VUE COMPREHENSIVE EXAM

c. Available cash surrender value

The policy loan amount cannot exceed the __________________. a. The cumulative premiums paid b. The loan balance c. Available cash surrender value d. The face amount of the policy

a. Estate planning

For ____________ purposes, the client should know that if they are a third party owner, the value of the death benefit will be added to their estate upon death of the insured. a. Estate planning b. Federal income tax c. State income tax d. State inheritance

B. Larger

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become A. Older B. Larger C. Smaller D. More Active

B. Death benefit can be increased with proof 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? A. The death benefit cannot be decreased B. Death benefit can be increased with proof of insurability C. The death benefit can be increased only when the policy has developed a cash value D. The death benefit will be increased only by exchanging the existing policy for a new one

A. Vacation travel expenses

Which of the following would least likely be considered a legitimate need that would be paid by insurance proceeds? A. Vacation travel expenses B. Travel expenses for family members to come to the funeral C. Day care D. Debt cancelation

c. Convertibility

A client wants to make sure that they have permanent life insurance policy several years from now when they can afford it without having to prove insurability. What feature should they make sure they have on their new term life insurance policy? a. Flexibility b. Renewability c. Convertibility d. Adjustability

c. Since the check did not clear the bank there is no coverage

A completed application and a check were submitted by a producer to an insurer on behalf of the applicant. A conditional receipt was given. The insured died prior to the insurer issuing the policy however the check was no good. What is the result. a. The claim will be paid only if it can be show that the funds were in the account at the time the check was written and given to the producer. b. The amount of the premium will be deducted from the claim payment c. Since the check did not clear the bank there is no coverage d. The insurer will pay the claim once they receive a new check

c

A life policy is usually contestable due to material misrepresentation on the application for a period of: A. 30 days B. 6 months C. 2 years D. 5 years

a. A partial surrender of the policy

A partial withdrawal is considered _____________. a. A partial surrender of the policy b. A policy loan c. A temporary event d. A one-time event

c

A payor benefit rider provides which of the following benefits? A. a disability income benefit payable to the payer if the payer becomes disabled B. A permanent waiver of premium should the payer die C. A temporary waiver of premium should the payer die, until the insured reaches a predetermined age D. A double indemnity Death benefit payable to the beneficiary upon the death of the payer

a

A type of annuity in which the cash values are invested in securities is called: A. Variable B. Deferred C. Fixed D. Joint and survivorship

b

An applicant for life insurance may question the validity and source of any consumer information developed under the: A. Medical Information Bureau Disclosure Act B. Fair Credit Reporting Act (Insurance Information and Privacy Protection Act) C. Equal Employment Opportunity Act D. Medicare Act

b. 6 more years of payments

An individual purchased a fixed annuity with flexible premiums. When she annuitized the policy, she chose the Life Income 10-Year Certain option. What would the beneficiary receive if the annuitant dies 4 years after the annuity payout began? a. 10 more years of payments b. 6 more years of payments c. The undistributed balance d. Nothing

B. 3

An insolvent insurer is one who is unable to pay its obligations when they are due or has fewer assets than liabilities for a period of A. 6 years B. 3 years C. 2 years D. 4 years

b. Stock market values

An insurer considers all of the following when determining the fixed annuity payments, except: a. The accumulation amount b. Stock market values c. Interest rate d. Expenses

A.Return of Premium With the ROP rider attached, upon the insured's death, the benefit paid will be the face amount plus an amount equal to all the premiums

Because of financial obligations, John felt that he needed more insurance than the insurer was willing to issue. John's insurance procedure told him that he could maximize the death benefit without increasing the face amount by the use of a(n): A. Return of Premium B. Automatic premium loan C. Waiver of premium rider D. Payor Rider

c. Actuary

Which of the following is a member of the Commissioner's staff valuable in assisting in life insurance company examinations? a. Underwriting expert b. Financial accountant c. Actuary d. Life auditor

d. 60

If a policyowner of a life insurance policy accidently pays in premiums in excess of the MEC guidelines, the insurer can refund the excess within ______ days of the end of the contract year. a. 10 b. 30 c. 45 d. 60

b

If an Adjustable Life policyowner makes an additional premium payment, the policy may be affected in all of the following ways EXCEPT the: A. premium paying period may decrease B. value of the Nonforfeiture Options may decrease C. face amount may increase D. length of coverage may increase

C. The annuitant will receive the higher of either the guaranteed minimum rate or current rate

In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment? A. The annuitant will only receive the guaranteed minimum specified in the contract B. The annuitant will receive the lower of either the guaranteed minimum rate or current rate C. The annuitant will receive the higher of either the guaranteed minimum rate or current rate D. The annuitant will always receive the current interest rate

d. Life Income

James is nearing retirement and has accumulated $175,000 in an annuity. He wants the largest possible monthly benefit for as long as he lives. Which option should he choose? a. Fixed Amount b. Life Income with Refund c. Joint Life d. Life Income

C When Leland surrenders his whole life policy for a reduced paid-up policy, the face value is reduced but the cash value continues to increase.

Leland elects to surrender his whole life policy for a reduced paid-up policy. The cash value of his new policy will: A)decrease gradually. B)decrease by 50% immediately. C)continue to increase. D)remain the same as in the old policy.

b. Unilateral Contract

One characteristic of life insurance is that the insurer is obligated to pay a claim in the event of the insured, however, the insured is not contractually obligated to do anything other than keep the policy in force. This is a: a. Contract of Adhesion b. Unilateral Contract c. Aleatory Contract d. Conditional Contract

d. Nothing

Under the annuity with a Joint Life Payment Option, what will the survivor receive upon the death of the first annuitant? a. The undistributed balance b. The remaining period certain c. The same amount they were receiving together d. Nothing

C One of the nonforfeiture provisions required in life insurance policies is the cash surrender value option. While in most instances the insurer will send the cash value much sooner, the insurer has up to six months to pay the cash surrender value to the policyowner.

When a policyowner surrenders a life insurance policy, the insurance company may withhold payment of the policy's cash values for up to: A)9 months. B)1 year. C)6 months. D)2 years.

a

Which of the following group life plans requires at least 75 percent of the eligible members A. Contributory B. Noncontributory C. Participating D. Nonparticipating

a

Which of the following policies is an interest-sensitive form of permanent protection? A. Universal Life B. Limited-Pay Life C. Graded Premium Whole Life D. Modified Whole Life

b

Which of the following statements about a Renewable Term policy is CORRECT? A. It is renewable at the option of the insurer. B. It is renewable at the option of the insured. C. It is renewable at the option of the insurer, with proof of insurability. D. It is renewable at the option of the insured, with proof of insurability.

d

Which of the following statements is CORRECT about the Paid-Up Additions in a participating Whole Life policy? A. They are subject to underwriting approval. B. They do not generate dividends. C. They are considered Term policies. D. They are purchased on an attained age basis.

A. It will pay double or triple the face amount

Which of the following statements is true concerning the Accidental Death Rider? A. It will pay double or triple the face amount B. Also known as the triple indemnity rider C. It is only available in group insurance D. The rider is only available to insureds over the age of 65

B.An individual not covered by an employer-sponsored plan who has earned income

Who can make a fully deductible contribution to a traditional IRA? A. A person who contributions are funded by a return on investment B. An individual not covered by an employer-sponsored plan who has earned income C. Anybody: all IRA contributions are fully deductible regardless of income level D. Someone making contributions to an educational IRA

B. Insurers

Who makes up the Medical Information Bureau? A. Physicians and paramedics B. Insurers C. Hospitals D. Former insured

d. Insurers

____________ manufacture and sell insurance coverage in the form of policies or contracts of insurance. a. Insureds b. Producers c. Agencies d. Insurers

d. Age and/or gender

_____________ is/are not considered material to the policy issuance. a. Recent major inpatient hospital surgeries b. Hazardous occupation and/or hobbies c. 12 driving under the influence tickets within 6 months prior to application d. Age and/or gender

d. Domicile

______________ refers to the jurisdiction where an insurer has formed or incorporated.. a. Authorized b. Admitted c. Approved d. Domicile

c. The actual life expectancy of each group of insured's

When calculating premium of life insurance policies, insurers assume all of the following, except: a. Premiums are paid in advance b. Premiums will be invested and earn interest c. The actual life expectancy of each group of insured's d. Claims are paid at year end

B. The surrender value should be equal to 100% of the premium paid, minus any prior withdraws and surrender charges

A deferred annuity is surrendered prior to annuitzation. Which of the following best describes the nonforfeiture value of the annuity? A. The surrender value will not be more than 80% of the cash value in the annuity after the time of surrender B. The surrender value should be equal to 100% of the premium paid, minus any prior withdraws and surrender charges C. A deferred annuity cannot be surrendered prior to annuitization. The owner must wait until the annuitization period begins to receive any payments. D. The surrender value will be based on current interest rates

C.Full death benefit If a life insurance does not have the War or Military Clause then the benefits are paid to the beneficiary as if the insured dies of any other cause

A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy? A. Policy's cash value B. Refund of premiums C. Full death benefit D. Nothing, since the insured was killed as a result of a war

c. Contributions are immediately tax deductible

All of the follow are TRUE regarding non-qualified retirement plans, except: a. Contributions are not tax deductible b. Upon withdrawal only the earnings are subject to taxation. c. Contributions are immediately tax deductible d. Earnings can be tax deferred until withdrawn

a. Life Only

All of the following annuity income benefits payouts options will affect the amount or duration of payout, except for: a. Life Only b. Interest Only c. Fixed Amount d. Fixed Period

a. Using a Life Insurance policy as collateral for a loan

All of the following are examples of an absolute assignment, except: a. Using a Life Insurance policy as collateral for a loan b. A court orders the existing policyowner to change it to their ex-spouse. c. A grandparent signs over ownership of a juvenile policy to their grandchild who is now reached age of majority. d. A business permits the change of ownership of a company owned policy over a retiring executive

B. Beneficiary's age

All of the following information about a customer must be used in determining annuity sutability except A. Financial experience B. Beneficiary's age C. Annual income D. Tax status

C. The payments will stop when the annuitant dies

All of the following statements are true regarding installments for a fixed amount except A. The annuitant may select how big the payments will be B. Value of the account and future earnings will determine the time period for the benefits C. The payments will stop when the annuitant dies D. The option pays specific amount until the funds are exhausted

d. There are no alternative ways to obtain needed cash

All of the following would be reasons why a policyowner would sell their policy in a life settlement transaction, except: a. The existing premiums are too high b. There is need for a different form of insurance c. There is no longer a need for the policy d. There are no alternative ways to obtain needed cash

D.Apparent Agent who accepts a premium after the due date appears to the client to have authority to prevent the lapse but in fact he does not

An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority? A. Express B. Assumed C. Implied D. Apparent

A.The interest will continue to accumulate tax deferred If contract holder dies before annuity date contracts interest is taxable. If the beneficiary is a spouse then the interest is tax deferred

An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary , what will occur? A. The interest will continue to accumulate tax deferred B. Interest will become immediately taxable C. Premiums will increase D. Premiums will decrease

A.Pay the death benefit Under the incontestability clause, once the policy has been in place for at least 2 years then you can not deny any claims

An insured purchases a policy in 2008 and died in 2013. The insurance company discovers at that time that the insured concealed information during the application process. What can they do? A. Pay the death benefit B. Pay a decreased death benefit C. Refuse to pay the death benefit because of the fraud D. Sue for the right to not pay the death benefit

d. 180

At least how many days in advance must an insurer give the affected party notice of non-renewal? a. 30 b. 60 c. 90 d. 180

A. Return the application to the applicant for a signature

If an agent fails to obtain an applicant's signature on the application, the agent must A. Return the application to the applicant for a signature B. Send the application to the insurer with a note explaining the absence of signature C. Sign the application for the applicant D. Sign the application, stating it was the agent

c. Provide inaccurate information given out within the previous 2 years

If an applicant or insured discovers errors in their Credit Report, the Fair Credit Reporting Act requires the reporting agency too: a. Send out a letter of apology b. Automatically reinvestigate c. Provide inaccurate information given out within the previous 2 years d. Make certain that the insurer corrects any inaccuracies found in the report

d. Purchase a decreasing benefit policy that matches the loan repayment schedule

In order to make sure that a creditor of the insured is not paid more than the outstanding loan at time of claim, the policyowner should: a. Specify a dollar amount the creditor should receive at time of claim b. Indicate the percentage of the face amount that creditor will receive c. Name the creditor as a primary beneficiary d. Purchase a decreasing benefit policy that matches the loan repayment schedule

A. Reduction of premium option ROPO allows policyowner to apply policy dividends towards the next years premium.

Julie pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. Julie has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this? A. Reduction of premium option B. Cash option C. Dividend-to-premium option D. Accumulation at interest

a. Higher

K owns a variable annuity with an assumed interest rate of 4%. If the actual performance of the separate account is 5%, the affect on this month's income benefit check will be ________: a. Higher b. Same c. Lower d. It all depends on the separate account selected

a. Single Premium Immediate Annuity

Susan, age 65, inherits a substantial sum of money and wants to have the money distributed to her over the rest of her life starting next month. Which product offered by the life insurance industry will allow her to accomplish her objective? a. Single Premium Immediate Annuity b. Single Premium Deferred Annuity c. Flexible Premium Deferred Annuity d. Flexible Premium Immediate Annuity

b. Income

The Social Security Survivor Benefit is the amount of _________ that may be expected from the Primary Insurance Amount (PIA) of the insured. a. Death benefit proceeds b. Income c. Tax Refund d. Indemnification

a. Executive

The State's __________ branch enforces the existing statutes that have been put in its place. a. Executive b. Judicial c. Electoral d. Legislative

c. electoral

The State's ______________ branch enforces the existing statues that have been in place. a. Executive b. Judicial c. Electoral d. Legislativec

d. Judicial

The ____________ branch is responsible for interpreting and determining the constitutionality of the statutes. a. Legislative b. Executive c. Electoral d. Judicial

B. Interest only option

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but their children when they reach a certain age. Which settlement option should the policyowner choose? A. Life income with period certain B. Interest only option C. Joint and survivor D. Fixed amount option

d. Medical Examination

The results of the ____________ is the only document that might be copied and made part of the policy. a. Agent's Report b. Consumer Investigative Report c. Attending Physicians Statement d. Medical Examination

a. The comparison of premiums paid during the first 7 years with the net level premiums that would have been paid on a 7 year pay whole life of the same death benefit

Under the Modified Endowment Contract rules the 7-Pay Test is defined as: a. The comparison of premiums paid during the first 7 years with the net level premiums that would have been paid on a 7 year pay whole life of the same death benefit b. The cash value at the end of the 7 exceeds the total of premiums paid c. Any life insurance policy that endows in 7 years d. The least amount of premium required to be paid in the first 7 years to maintain the policy to age 70

B.Cash surrender Once the cash surrender value is paid the contract is over

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner? A. Reduced paid-up B. Cash surrender C. Paid-up options D. Extended term

D. Immediately after receiving written proof of loss

Upon the submission of a death claim under a life insurance policy, when should the insurer pay the policy benefit? A. Within 2 years pf the date of loss B. On the next anniversary of the policy C. After the estate of the insured has been settled D. Immediately after receiving written proof of loss

B. Survivor protection, estate creation and conservation, cash accumulation and liquidity

What are the personal uses of life insurance? A. Insured protection, estate creation and cash accumulation B. Survivor protection, estate creation and conservation, cash accumulation and liquidity C. Cash accumulation, estate depletion and liquidity D. Beneficiary protection, liquidity, estate creation, and cash accumulation

d. At least 6 credits earned in the calendar quarters prior to death, disability, or is entitled to retirement benefits

What is the minimum requirement for currently insured status under the Social Security system? a. Have 40 quarters of covered employment b. Have no had a previous Social Security claim c. Earned more than minimum wage d. At least 6 credits earned in the 13 calendar quarters prior to death, disability, or is entitled to retirement benefits

C. Distributions are taxable

When contributions to an immediate annuity are made with before-tax dollars, which of the following is true of the distributions? A. There are no distributions B. Distributions are nontaxable C. Distributions are taxable D. Distributions can't begin prior to age 70 1/2

b. Variable

Which of the following Annuities would potentially be the most negatively impacted by the overall stock market failing in values? a. Indexed b. Variable c. Fixed d. Market adjusted annuity

B.Groups medical history

Which of the following are generally not considered when underwriting group insurance? A. Nature of Group B. Groups medical history C. Groups past claim experience D. Size of group

B. Aleatory

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company? A. Subrogation B. Aleatory C. Adhesion D. Warranty

C. Notice Regarding Replacement During policy replacement, the replacing producer must present to the aplicant a notice regarding replacement thats signed by the applicant and producer

Which of the following documents must be provided to the policyowner or applicant during policy replacement? A. Policy illustrations B. Buyer's Guide and Policy Summary C. Notice Regarding Replacement D. Disclosure Authorization Form

D. Superintendent

Which of the following has the authority to issue a cease and desist order? A. Federal Insurance Regulation Board B. Department of Insurance C. State police D. Superintendent

D. To minimize the insured's level of liability in the event of a loss

Which of the following is NOT a goal of risk retention? A. To reduce expenses and improve cash flow B. To fund losses that cannot be insured C. To increase control of claim reserving and claims settlements D. To minimize the insured's level of liability in the event of a loss

c. Conditions

Which of the following is NOT considered one of the essential elements of a contract? a. Competent Parties b. Offer of Acceptance c. Conditions d. Legal Purpose

d. Preferred Rate

Which of the following is a policy not issued with a rating? a. Lien Plan b. Flat Rate c. Tabular Rate d. Preferred Rate

c. As long as there is sufficient cash value to cover policy expenses due, the insured is not required to pay the planned premium

Which of the following is a true characteristic of a Variable Universal Life Policy. a. The insurer bears all risks in accumulating cash value b. The policy has a fixed premium schedule c. As long as there is sufficient cash value to cover policy expenses due, the insured is not required to pay the planned premium d. The policy requires only a life license to sell

a. The lien plan

Which of the following is a type of rating that does not involve an extra premium being assessed? a. The lien plan b. The flat rate c. Rated up at age d. Sub-standard

a. Establishing new insurance laws

Which of the following is not one of the Insurance Commissioner's duties? a. Establish new insurance law b. Conducting investigations c. Issuing Certificates of Authority d. Examining Insurers

A. Admitted

Which of the following is the closet term to an "authorized" insurer? A. Admitted B. Certified C. Legal D. Licensed

c. The death benefit is not liable to garnishment or debts without the insured's directive

Which of the following is true about group life insurance death benefits? a. If a person dies during the conversion period and no premium has been paid, no death benefit will be paid b. If no beneficiary is named on a policy, the death benefit will not pay for the burial expenses c. The death benefit is not liable to garnishment or debts without the insured's directive d. A beneficiary of a group life policy must share the proceeds with a judgement from a judicial proceeding

D.They have a guaranteed minimum interest rate

Which of the following is true for both equity indexed annuities and fixed annuities? A. They invest on a conservative basis B. Both tied to a equity index C. Both are considered to be more risky than variable annuities D. They have a guaranteed minimum interest rate

C. The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days Annuitant contracts provide for a waiver of surrender charges if the annuitant is confined to a long-term care facility for at lest 30 days

Which of the following is true regarding a waiver of a surrender charge on an annuity contract? A. Surrender charge can only be waived if the annuitant needs the funds for medical expenses B. The surrender charge waiver only applies to immediate annuity C. The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days D. The charge can only be waived if the annuitant needs the funds for medical expenses

C. Dividends are nontaxable

Which of the following is true regarding taxation of dividends in participating policies? A. Dividends are considered income for tax purposes B. Dividends are taxable in some life insurance policies and nontaxable in others C. Dividends are nontaxable D. Dividends are taxable only after a certain amount is accumulated annually

B.Creditor can only insure the debtor for the amount owed

Which of the following is true regarding the insurance amount in a credit life insurance policy? A. Creditor may insure the debtor for an unlimited amount of coverage B. Creditor can only insure the debtor for the amount owed C. The amount of coverage can be greater than the amount owed D. Allowable amount of coverage is determined by the State Insurance Commissioner

B. Payor Benefit Rider

Which of the following riders would not cause the Death benefit to increase? A. Guaranteed Insurability Rider B. Payor Benefit Rider C. Cost of Living Rider D. Accidental Death Rider

d. Insuring Clause

Which of the following state the obligation of the insurer and the risk that is considered in a life insurance policy? a. Exclusions Provision b. Consideration Clause c. Entire Contract Clause d. Insuring Clause

c. The Interest credited to the policy is based off of the performance of a stock market index life the S&P 500

Which of the following statements about Equity Indexed Life insurance is TRUE? a. The policyowner can decide which separate accounts to invest the policy's cash values into b. The insured/owner bears all risk regarding cash surrender value, as negative stock market performance can cause the cash values to decrease c. The interest credited to the policy is based off of the performance of a stock market index like the S&P 500 d. To sell Equity Indexed Life, a producer only needs a securities license

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

Which of the following statements about a suicide clause in a life insurance policy is true? A. Suicide is excluded as long as the policy is in force B. Suicide is excluded for a specific period of years and covered thereafter C. Suicide is covered for a specific period of years and excluded thereafter D. Suicide is covered as long as the policy is in force

d. Single Premium Deferred Annuity

A lump sum of money is placed into an account from which the annuitant will draw periodic benefits beginning more than a year from the date of purchase. This describes a: a. Flexible Premium Deferred Annuity b. Single Premium Immediate Annuity c. Flexible Premium Immediate Annuity d. Single Premium Deferred Annuity

c. Taxed as ordinary income

A permanent policy is surrendered for its cash value, and that sum is greater than the amount of premiums paid in. How is the excess taxed? a. Taxed as a short term capital gain b. Taxed as a long term capital gain c. Taxed as ordinary income d. No tax is due

C. 1035 Exchange

A policyowner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. The nontaxable transaction is called A. Rollover B. Premature Distribution C. 1035 Exchange D. Qualified Distribution

A. Survivor Protection

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as A. Survivor protection B. Juvenile protection provision C. Life Planning D. Survivorship insurance

b. 4

A producer must complete a _____ credit hour training course in order to sell annuity products. a. 3 b. 4 c. 6 d. 8

A. Guranteed and current

A universal life insurance policy has two types of interest rate that are called A. Guranteed and current B. Minimum and target C. Fixed and variable D. Option A and B

b. Entity

A(n)___________ plan calls for the business to purchase life insurance policies on each of the business owners. a. Cross Purchase b. Entity c. Group d. Credit Protection

c. 30 days

Admitted life insurance must pay interest, at a rate specified by life, on death benefits from the date of the insured's death, through how many days following the date the insurer receives the claim? a. 15 days b. 20 days c. 30 days d. 31 days

a. The premium declines throughout the term of the policy

All of the following are correct pertaining to Decreasing Term, except: a. The premium declines throughout the term of the policy b. Its most common uses is in credit life insurance c. The death benefit decreases d. The premium stays level

D. They must be part of the contract

All of the following are rewuirements for life insurance illustrations except A. They may only be used as approved B. They must identify nonguranteed values C. They must differentiate between guaranteed and projected amounts D. They must be part of the contract

B. $8,000, 60 days IRA rollovers must be completed within 60 days from the time the money is taken out for the first plan. If the distribution from the first plan is paid directly to the participant, 20% of the distribution must be withheld by the payor.

An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax free rollover? A. $8,000, 30 days B. $8,000, 60 days C. $10,000, 30 days D. $10,000, 60 days

A.Variable

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of his policy is significantly lower this month then it was last month. What type of policy does the insured have? A. Variable B. Term C. Securities D. Stock

D. The policy will terminate when the loan amount with interest equals or exceeds the cash value

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen? A. The insurer will not permit the policyowner to take out any more loans B. The policy will be reduced to an extended term option C. The insurer will increase the interest rate on the loan and charge a penalty D. The policy will terminate when the loan amount with interest equals or exceeds the cash value

B.Yes, but not unfairly

Are insurance company underwriters allowed to discriminate? A. No, higher risks pay higher premiums B. Yes, but not unfairly C. No, discrimination is an unfair practice D. Yes, but only for gender

c. At the time of policy issue

As it relates to life insurance, when must insurable interest exist? a. At the time of application b. At the time of death c. At the time of policy issue d. At the time of the appointment

a. 24 hours every 2 years

How many hours of continuing education are required to maintain an insurance license in Colorado? a. 24 hours every 2 years b. 16 hours every 2 years c. 24 hours annually d. 16 hours annually

a. The amount of the accelerated payment, the remaining death benefit and cash value

In the event that an insured receives a period benefit as the result of exercising the Accelerated Death Benefit Rider, what information must the insurer provide to the insured? a. The amount the accelerated payment, the remaining death benefit and cash value b. The amount of taxable income that they will be reporting to the IRS c. The life expectancy of the insured on a semi-annual basis d. Verification and update of the policy ownership and beneficiary designation

D. 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? A. Excessive number of divorces, as defined by the insurance code B. Divorce within the last 6 months of applying for the insurance C. Legal seperation during the application process D. It is never legal to limit coverage based on martial status

D.Loss

Insurance is the transfer of A. Risk B. Peril C. Hazard D. Loss

b. The surrender charge

On a variable universal life policy what is the difference between the cash value and the cash surrender values? a. The interest earned b. The surrender charge c. The investment performance d. The amount of any outstanding policy loan

B. Any form of life insurance

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would financially be able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? A. Term Insurance only B. Any form of life insurance C. Universal Life insurance D. Permanent insurance only

a. Coercion

Producer A requires a home buyer to take out a mortgage loan with a partner bank in order to be issued Homeowners policy. This is an example of what Unfair Trade Practice? a. Coercion b. Rebating c. Misrepresentation d. Unfair Discrimination

b. Employer paid group life insurance premium up to $50,000 of coverage

The exception to the rule concerning the non-deductibility of life insurance premiums is: a. Key Employee Insurance b. Employer paid group life insurance premium up to $50,000 of coverage c. Life insurance to fund a Buy-Sell Agreement d. Third-Party Ownership Policies

C. The Insurer

The superintendent may examine books and records of all authorization insurers in Ohio. Who is responsible for paying for the exam? A. The NAIC B. The Department of Insurance C. The Insurer D. The Superintendent

D. 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 premium must be paid A. For 20 years B. Until the policyowners age 65 C. Until the policyowners age 100, when the policy matures D. For 20 years or until death, whichever occurs first

A. Nonforfeiture option guarantees that the owner will receive a surrender value of the contract If a deffered annuity is surrendered prior to annuitization, the surrender value of the annuity is guaranteed due to the non forfeiture provision

A prospective deferred annuity owner is concerned about what would happen if he surrendered the annuity before the annuitization period. The agent most likely explained which of the following? A. Nonforfeiture option guarantees that the owner will receive a surrender value of the contract B. It is not possible to surrender an annuity before the annuitzation period C. The insurance company will apply the money to another annuity or a life insurance policy, but the money cannot be returned. D. The owner will receive some of the money back, which will depend on the surrender value established by the insurer at the time the contract is terminated

c. Plan withdrawals are tax free

All of the following are the benefits of having an employer sponsored retirement plan be ERIS A qualified, except: a. Employer contributions are immediately tax deductible b. Employer contributions are not taxable to the employee until withdrawn c. Plan withdrawals are tax free d. Earnings on contributions grow tax deferred

A. Respond to the consumers complaint

Under the Fair Credit Reporting Act, if the consumer challenges the correctness of the information in his/her report, the reporting agency must A. Respond to the consumers complaint B. Send an actual certified copy of the entire report to the consumer C. Change the report D. Defend the report if the agency feels it is accurate