Quiz Review (Life Insurance)

What percentage of a company's employees must take part in a noncontributory group life plan?

100%

Which two terms are associated directly with the premium?

Level or Flexible

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability. which policy provision allow this?

Reinstatement provision

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

face amount

Regarding the free-look provision, the insurance company

must allow the policyowner to return the policy for a full refund

all of the following are qualifications of a resident producer except

obtaining a sponsorship of an admitted insurance company

according to life insurance advertising rule 13 all of the following statements are correct except

only written presentations by the producers are considered advertising

Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT

other insurance coverages

all of the following are characteristics of group life insurance policy EXCEPT

premiums determined by age, sex, and occupation of each holder

If a company has a Simplified Employee Pension plan, what type of plan is it?

A qualified plan for a small business

SIMPLE Plans require all of the following EXCEPT

At least 1,000 employees.

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated

If a life insurance policy has an irrevocable beneficiary designation,

The beneficiary can only be changed with written permission of the beneficiary

The Ownership provision entitles the policyowner to do all of the following EXCEPT

assign the policy

insurance producers who willfully violate the Indiana insurance code are committing a class c misdemeanor what is the maximum punishment they may be subjected to?

up to 60 days in jail

how long is a free look period for replacement of policies

20 days

Who is a third-party owner?

A policyowner who is not the insured

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

purchase a single premium policy for a reduced face amount

The Ownership provision entitles the policyowner to do all of the following EXCEPT

set premium rates

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

signed waiver of premium

Children Riders attached a whole life policies are usually issued as what type of insurance

term

which of the following is true regarding variable annuities

the annuitant assumes the Risks on investments

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

the annuitant must be a natural person

which of the following is true of the commissioner of insurance

the commissioner is authorized to participate in the NAIC

If the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?

the full death benefit

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

the surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive

Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?

they are tax deferred until withdrawn

what is the purpose of a disclosure statement in life insurance policies?

to explain features and benefits of a proposed policy to the consumer

what is the purpose of establishing the target premium for a universal life policy

to keep the policy in force

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?

$100,000

Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?

$50,000

within how many days after requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)

403(b) Plan tsa

Under which of the following circumstances would an insurer pay accelerated benefits?

An insured is diagnosed with cancer and needs help paying for her medical treatment

In an annuity, the accumulate money is converted into a stream of income during which time period?

Annuitization period

Which of the following products will protect an individual from outliving their money?

Annuity

When must insurable interest exist?

At the time of application

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

Cash Option

A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider cause this change?

Cost of Living Rider

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

Depreciation Period

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is the greatest amount

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Family term rider

What do individuals use to transfer their risk of loss to a larger group?

Insurance

The Medical Information Bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons.

What is the purpose of a free-look period in insurance policies?

It allows the insured to reject the policy with a full refund

Which of the following is true about the mandatory free look in a Life Insurance policy?

It commences when the policy is delivered

which of the following is an IRS qualified retirement program for the self employed

Keogh plan

Which of the following best describes a pure life annuity settlement option?

Pure life provides payments for as long as both the annuitant and the spouse are living.

Which of following would be considered a non qualified retirement plan?

Split-dollar plan

All of the following statements about equity index annuities are correct EXCEPT

The annuitant receives a fixed amount of return

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT

The insured's age at death

Which of the following statements is TRUE concerning irrevocable beneficiaries?

They can be changed only with the written consent of that beneficiary.

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

Those who have been insured under the plan for at least 5 years

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?

Underwriter's Report

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?

Universal Life

What kind of policy allows withdrawals or partial surrenders?

Universal life

The main difference between immediate and deferred annuities is

When the income payments begin

The term "illustration" in a life insurance policy refers to

a presentation of non guaranteed elements of a policy

under which circumstances can a producer receive a commission and a consultants fee for the same transaction

a producer makes a disclosure about the compensation agreements prior to the transaction

a temporary license may be obtained for all of the following situations except

a producers retirement

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?

aleatory

a business entity may be licensed as an insurance producer if

an employee who holds a producers license is designated as a compliance officer

In order to get a nonresident license in this state, a producer must

apply and pay a fee to a nonresident state that reciprocates

which of the following is incorrect regarding a $100,000 20 year term level policy?

at the end of 20 years the policy's cash value will equal $100,000

an insurance contract must contain all of the following to be considered legally binding except

beneficiary's consent

When a policyowner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called

class designation

the proposed insured makes the premium payment on a new insurance policy. if the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved this is an example of what kind of contract?

conditional

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

conditions

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called

cost of living rider

what happens when a policy is surrendered for its cash value

coverage ends and the policy can not be reinstated

universal life and variable universal life policies have what type of premium?

flexible

an insurance company assures its new policyholders that their premium costs will not increase for a period of at least 5 years however due to increasing financial strain they plan to raise premium costs for all insureds by 10% over the next two years

fraud

which is true about the cash surrender nonforfeiture option

funds exceeding the premium are taxable as ordinary income

a return of premium term life policy is written as what type of term coverage?

increasing

a life insurance policy has a legal purpose if both which of the following elements exist?

insurable interest and consent

which of the following is responsible for the powers duties management and control of the insurance department?

insurance commissioner

in insurance policies the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. what contract element does this describe?

unilateral

all of the following are true regarding viatical settlement regulations in Indiana except

vatical contracts allow for a 10 day free look period