quiz 7

The premium for a variable annuity may be invested in any of the following during the free look period, except: a.Balanced funds b.Fixed-income investments c.Money market funds d.The aggressive mutual funds of the underlying annuity contract at the investors request.

a.Balanced funds

Identify that which constitutes the "entire contract" in a life insurance policy: a.Policy, application, riders and any modifications b.Policy, application, and any oral statements along with the application c.Policy, riders, not including the application d.Policy and a brochure known as the buyer's guide and the policy summary

a.Policy, application, riders and any modifications

With regards to life insurance, insurable interest is not a requirement for a _____________. a.Person buying the policy b.Co-policyowner c.Beneficiary d.Policyowner

c.Beneficiary

Who are parties to the life insurance contract? a.Agent and the applicant b.Agent, the applicant and the beneficiary c.Applicant and the beneficiary d.Applicant and the insurer

d.Applicant and the insurer

What is the name of the second part of a life insurance application? a.Medical Information b.Beneficiary Information c.The Agents Report d.General Information

a.Medical Information

What must be received by the proposed insured no later than policy delivery? a.Buyers guide and policy summary b.Conditional receipt c.Outline of Coverage d.Copies of signed authorization forms.

a.Buyers guide and policy summary

Which of the following would not be considered a replacement? a.Customer cancelled a policy 3 months ago and now decides he wants a new policy. b.Customer wants to have his existing policy benefits reduced, and add a term policy. c.Customer wants you to write a new term policy under which his monthly premium will be less. d.You write the customer another policy in addition to his current one, which he stops paying 2 months later.

a.Customer cancelled a policy 3 months ago and now decides he wants a new policy.

All of the following items would appear on the first page of a life policy except: a.Premium payment period b.Amount of coverage c.Cost of insurance d.Term of the policy

c.Cost of insurance

The premium for a variable annuity may only be invested in all of the following during the free look period except: a.High risk funds that is specifically requested by the investor. b.Fixed income funds c.Individual stocks and bonds from low risk companies. d.Money market funds

c.Individual stocks and bonds from low risk companies.

The section of the life application that contains information about health of the applicant`s relatives is: a.The Medical Information section b.The Agent`s Report c.The General Information section d.The Agent`s Report, section B.

a.The Medical Information section

The interest adjusted cost method differs from the traditional net cost method of comparing the costs of life insurance in that the former takes into account: a.The time value of money b.An interest rate c.Surrendering the policy before maturity d.A shorter premium payment period

a.The time value of money

Which of the following is correct concerning a life insurance application: a.Part II contains medical information and questions concerning hobbies and driving record. b.Part I of the application contains questions concerning driving record, hobbies, and past and present life insurance c.When a prospective insured reveals a medical condition the underwriter will order a para-medical exam. d.The agent report becomes part of the contract.

b.Part I of the application contains questions concerning driving record, hobbies, and past and present life insurance

Any insurance company that violates the replacement laws may be fined: a.A minimum of $250 for the first violation. b.The first fine is $10,000; thereafter the penalty is $30,000 to $300,000. c.A minimum of $2,500 for the first offense. d.A range of $1,000 to $25,000 for each offense after the first.

b.The first fine is $10,000; thereafter the penalty is $30,000 to $300,000.

All the following statements are true of replacements except: a.A Notice Regarding Replacement of Life Insurance must be presented at the time of application. b.The information and evidence must be retained for at least 24 months. c.Applicant must receive the original or a copy of all printed communications used for presentation. d.The client has 30 days to look over the policy and decide if he/she wants to keep it.

b.The information and evidence must be retained for at least 24 months.

In the life insurance industry, the __________ is the standard life insurance policy. a.Whole life b.Universal life c.There are no standard life policies d.Term life

c.There are no standard life policies

All of the following relationships normally indicate the presence of insurable interest except: Show Hint a.Bank insuring the life of a customer in the amount of his savings account balance b.An individual insuring her own life c.An employee insuring the life of his employer to provide funding for a business purchase agreement d.A wife insuring the life of her husband

a.Bank insuring the life of a customer in the amount of his savings account balance

Which of the following describes a standard life policy? a.There is no such thing as a standard life policy. b.10 year $100,000 term policy. c.5 year $50,000 term policy. d.$10,000 whole life policy.

a.There is no such thing as a standard life policy.

Whose signature is required on the application? a.The applicant and the insured if different and the insurer b.Applicant and the agent c.Policyowner, beneficiary and the insurer d.Policyowner, insured, applicant if different and insurer

b.Applicant and the agent

Within the life insurance policy summary, all the following must be listed except: a.Premiums to be paid each year for the first 5 years. b.Name of the insured and the beneficiaries. c.Cash values at the end of each year for the first 5 years. d.Name and address of the insurance company.

b.Name of the insured and the beneficiaries.

An agent sells a life policy to a 60 year old client. Which of the following is true regarding a full refund? a.Policyowner may return the policy the day after the 30th day. b.Policyowner may return the policy within 1 day. c.Policyowner may return the policy within 90 days. d.Policyowner may return the policy within 60 days.

b.Policyowner may return the policy within 1 day.

An agent must submit all of the following to the insurer, except: a.The application listing any and all policies to be replaced by insurer and policy number. b.A copy of the signed replacement notice, if replacement is involved c.A copy of all printed communications used for the presentation d.A signed copy of any illustration used in the presentation

c.A copy of all printed communications used for the presentation

Model state law of the NAIC requires that two interest adjusted cost indices must be illustrated within each life insurance policy issued: a.Net cost index and surrender payment index b.Minimum cost index and surrender cost index c.Net payment index and surrender cost index d.Gross surrender payment and Net cost index

c.Net payment index and surrender cost index

The type of life insurance that does not require a medical exam and asks only very basic health-related questions on the application is called: a.Basic issue life policy b.Simplified issue c.Non-medical issue d.Medical-free issue

c.Non-medical issue

All of the following relationships present an example of insurable interest except: a.A college student insuring the life of the person responsible for their tuition b.An employer insuring the life of the company office manager c.An employee insuring the life of his employer to provide funding for a business purchase agreement. d.Bank insuring the life of a customer in the amount of their savings account balance

d.Bank insuring the life of a customer in the amount of their savings account balance

A temporary insurance agreement is another term for a _________. a.Free Look Period b.Conditional Receipt c.Delivery Receipt d.Binding Receipt

d.Binding Receipt

All of the following are true statements except: a.Clients under the age of 60 have at least 10 days of a free look. b.Clients under the age of 60 have 30 days of a free look for replacements. c.Clients over age 60 have 30 days of a free look. d.Clients under the age of 60 have at least 10 days for a free look on term conversions.

d.Clients under the age of 60 have at least 10 days for a free look on term conversions.

Which is correct about the "notice regarding replacement of Life Insurance" that agents are required to deliver to life insurance applicants? a.It must be delivered to all applicants, whether or not a policy is replaced. b.It is not required for term insurance only permanent insurance and annuities. c.If the policy being replaced is less than $10,000 in face amount, the notice is not required to be delivered or if it is a burial policy. d.It must be signed prior to taking an application.

d.It must be signed prior to taking an application.

All of the following would be contained on the first page of the policy except: a.How much coverage is purchased. b.Type of policy. c.Amount of the annual premium. d.Name, age, gender and SS# of the insured.

d.Name, age, gender and SS# of the insured.

Which one of the following Life Policies is the Standard Life Policy for the life insurance industry? a.Whole Life b.Universal Life c.Variable Life d.There is no standard life policy

d.There is no standard life policy

The purpose of laws regarding the replacement of life and annuity contracts includes all of the following, except: a.To ensure the purchaser receives adequate information to make an informed decision b.To reduce the opportunity for misrepresentation and incomplete disclosures c.To establish penalties for failure to comply with replacement requirements d.To protect the interests of life insurers and their agents

d.To protect the interests of life insurers and their agents