Practice life test
An applicant for life insurance may question the validity and source of any consumer information developed under the:
Fair Credit Reporting Act (Insurance Information and Privacy Protection)
Which of the following statements about a Renewable Term policy is CORRECT?
it is renewable at the option of the insured
Federal income tax laws generally treat proceeds of life insurance policies as:
nontaxable
An insured intentionally understates her age on her application for a life policy. At death, the insurer will take which of the following actions?
pay a reduced death benefit based on the insured's actual age
An applicant's statements on an application are considered to be legal:
representations
A producer may be guilty of misrepresentation if the producer:
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Which of the following situations is considered rebating?
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Which of the following terms refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another?
Assignment
Which of the following group life plans requires at least 75 percent of the eligible members to participate?
Contributory
Which of the following statements is CORRECT about Group Life conversion privileges?
Death during the conversion period is covered if the departing employee chose not to conver the policy.
Which of the following policy provisions states that the application is part of the policy?
Entire contract
Which of the following features allows an insurance policy to remain in force for a specified number of days beyond the premium due date?
Grace period provision
An employer can deduct premium payments as an ordinary business expense for which of the following life coverages?
Group
A contract that promises to pay an income to an insured until his/her death is called:
Life Annuity
All of the following policies may be examples of third party ownership EXCEPT:
Modified Life Group Life Split-dollar Life Key Employee Life Answer: Modified Life
R has just graduated from law school. R knows that R's future earnings will be much higher than they are now, but wants to purchase a permanent policy now to cover future needs. Which of the following policies would BEST suit R's needs?
Modified Whole Life
Which of the following policy provisions provides for continuation of coverage despite nonpayment of premiums?
Nonforfeiture Option
An insurance producer takes an application for a life insurance policy but does not collect the initial premium. On delivery of the policy to the proposed insured, the producer must collect the initial premium and which of the following?
The insured's signed statement of continued good health
A life insurance application is considered incomplete if it is missing the signature of which of the following?
The proposed adult insured
A payor benefit rider provides which of the following benefits?
a temporary waiver of premium should the payor die, until the insured reaches a predetermined age
All of the following elements must be included in a policy summary given to a purchaser of life insurance EXCEPT the:
...
If an insured commits suicide after the Suicide clause in the insured's life insurance policy has expired, the insurer will take which of the following actions?
Pay the death benefit
The Waiver of Premium provision of a life policy allows the insurer to take which of the following actions?
waive an insured's premiums if the insured becomes totally disabled before a certian age
An applicant for life insurance must be informed of their rights under the Fair Credit Reporting Act at which of the following times?
when the producer completes the insured's application
In which of the following contracts is the Death benefit called the principal sum?
Accidental death and dismemberment (AD&D)
All of the following provisions must be included in group life insurance policies issued in this state EXCEPT:
All of the following provisions must be included in group life insurance policies issued in this state EXCEPT: -Nonforfeiture -Payment of Benefits -Suicide -Incontestable
The PRIMARY purpose of an inspection report is to assess an applicant's:
Personal characteristics
If an applicant for life insurance submits a completed application to a producer without paying the first premium, coverage becomes effective when the:
Policy is delivered and the premium paid
P wants to name her husband as the beneficiary of her life policy. However, she wishes to retain all of the rights of ownership. P should have her husband named as the:
Revocable Beneficiary
A producer takes applications from identical twins who want to buy the same type of policy in the same amount. The insurer issues the policies as applied for, but charges a 25 percent higher premium for one of the policies. The difference in premiums is probably due to which of the following factors?
Risk classification
In order for nonresident applicants to be eligible for an insurance producer license in this state, they MUST:
The person is currently licensed as a resident and in good standing in the person's home state; (b) The person has submitted the proper request for licensure and has paid the fees required by RCW 48.14.010; (c) The person has submitted or transmitted to the commissioner a completed uniform application; (d) The person's home state awards nonresident producer licenses to residents of this state on the same basis; and (e) A business entity, it has designated an individual licensed insurance producer responsible for the business entity's compliance with the insurance laws and rules of this state.
Which of the following statements is CORRECT about the Paid-Up Additions in a participating Whole Life policy?
They are purchased on an attained age basis
Which of the following policies is an interest-sensitive form of permanent protection?
Universal life
If a policy contains a Guaranteed Insurability rider, the insured has the right to purchase:
additional coverage at specified ages
Which of the following policy provisions states a company's promise to pay benefits?
insuring clause
In life insurance, the Free Look provision begins on the:
policy delivery date
The right to change a beneficiary designation is reserved for the:
policyowner
Which of the following provisions in a life policy specifies the manner in which proceeds will be paid to a beneficiary on the death of the insured?
settlement options
A type of annuity in which the cash values are invested in securities is called:
variable
An individual appointed by an insurance company to solicit applications for a policy of insurance on its behalf is known as:
...
An individual may obtain a temporary insurance producer's license without passing the licensing examination if the individual:
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An individual who, for the purpose of collecting premiums, acts for another in negotiating a contract of insurance is considered to be:
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The Life Insurance and Annuity Replacement Rule is designed for which of the following purposes?
...
The major difference between a mutual insurance company and a stock insurance company is the:
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Under the Social Security Retirement Benefits, all of the following factors will influence how much a retiring individual will receive as a monthly income benefit EXCEPT the individual's:
Age PIA "fully insure" or "currently insured" status Sex Answer: Sex
A Variable Life contract must contain all of the following provisions EXCEPT:
Any individual variable life insurance or individual variable annuity contract delivered or issued for delivery in this state must contain grace, reinstatement, and nonforfeiture provisions appropriate to those contracts, and any variable life insurance contract must provide that the investment experience of the separate account may not operate to reduce the death benefit below an amount equal to the face amount of the contract at the time the contract was issued. Any individual variable life insurance contract may contain a provision for deduction from the death proceeds of amounts of due and unpaid premiums or of indebtedness which are appropriate to that contract.
A client needs a substantial amount of protection but has limited financial resources. Which of the following insurance policies would BEST meet the client's needs?
Term
A policyowner names his wife as the primary beneficiary of his Universal Life policy on a revocable basis. He also names his three children as his secondary beneficiaries and his estate as his tertiary beneficiary. If the policyowner's wife predeceases him, and then he dies, who will receive the policy proceeds?
the children
Reinstatement of a life insurance policy requires an insured to take all of the following actions EXCEPT:
-Provide evidence of insurability -make collateral assignement to the insurer -pay back intereset on any outstanding policy loan -pay all past due premiums Answer: make collateral assignment to the insurer
Which of the following statements is NOT correct about representations?
-they can be a part of the contract -they must be true in every respect -they are made to influence the insurer to accept the risk -they are assumed to be accurate Answer:They must be true in every respect
All of the following groups are considered eligible for group life insurance EXCEPT:
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An insurance company doing business in this state must operate under:
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An insurance company formed under the laws of a state other than this state is known as:
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An insurance producer who makes false statements that harm the reputation of another insurance company is guilty of:
...
Controlled business is defined as insurance a producer writes on all of the following individuals EXCEPT the producer's:
...
In a life policy, a special benefit that prepays a portion of the death benefit during the lifetime of an insured in the event of a specified illness is called:
...
The Insurance Commissioner may examine the records of an insurance company at which of the following times?
...
The Insurance Commissioner may revoke or suspend a producer's license if the producer:
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Which of the following persons is authorized to enforce state insurance laws?
...
Which of the following statements about replacement of existing life insurance is CORRECT?
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Which of the following statements is CORRECT about insurance producers who fail to satisfy the continuing education requirements?
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Which of the following terms may be used in advertisements for life insurance?
...
Which of the following types of insurance policies is EXEMPT from the Life Insurance and Annuity Replacement Rule?
...
A life policy is usually contestable due to material misrepresentation on the application for a period of:
2 years
An insured owns a $10,000 policy with a $4,000 cash value and a 6 percent interest rate. On January 1, the insured borrows $500 and pays one year's interest in advance. During the year, the insured does not repay any part of the loan or interest. If the insured dies on December 31, the beneficiary will be entitled to a MAXIMUM of:
9500
Which of the following annuities would BEST suit the needs of a 35-year-old factory worker who is concerned about inflation and wants to establish a retirement plan?
A flexible Premium Variable Annuity
If an Adjustable Life policyowner makes an additional premium payment, the policy may be affected in all of the following ways EXCEPT the:
A) premiuim paying period may decrease B) value of the Nonforfeiture Options may decrease C) face amount may increase D) length of coverage may increase Answer is B
If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is MOST likely to:
Charge and extra premium
In the event of an insured's death, which of the following provides an income for the family during a designated period of time followed by a lump sum death benefit?
Family income rider
In life insurance, insurable interest must exist at the time the:
Producer writes an application on a proposed insured
Which of the following statements about Credit Life insurance is CORRECT?
Question: 14 Which of the following statements about Credit Life insurance is CORRECT? -It may be provided through a group or individual policy. -The face amount must exceed twice the amount of the debt. -The premiums must be paid by the lender. -The lender may require that it be purchased through a particular insurance company.
A contract that has as its basic function the systematic liquidation of accumulated assets through periodic payments is called an:
annuity
Two business partners own life insurance on each other. If one partner dies, which of the following contracts will allow the other partner to buy 100 percent of the business interest?
buy and sell agreement
Which of the following amounts must increase in an increasing term policy?
death benefit
When an insured reaches age 65, the cash value of a 20-Pay Endowment at Age 65 policy is equal to which of the following amounts?
the face amount of the policy