Review Missed Questions

What is the maximum fine for attempting to obtain a license through fraud or misrepresentation?

$1000

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000

What is the minimum age to apply for a resident license in this state?

18

Ace, an independent agent, is appointed by ABC Insurance. Ace decides to place some advertisements in the paper so that people will be aware of the products. Some of the advertisements overstate the benefits of the policies. Who is responsible for this violation of advertising laws?

ABC

Which of the following premium payment modes will incur the lowest overall payment?

Annual

Which of the following best describes fixed -period settlement option?

Both the principal and interest will be liquidated over a selected period of time.

Which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy

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

Cash option

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

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

Dividend

For a retirement plan to be qualified, it must be designed for whose benefit?

Employees

All of the following statements are true regarding tax-qualified annuities EXCEPT

Employer contributions are not tax deductible.

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase.

Ann annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have in her retirement dollars, she would like a return that will equal the performance of S&Ps 500 Index. She would likely purchase a(n)

Equity Indexed Annuity

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

All of the following are dividend options EXCEPT

Fixed period installments

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurers classification in Wyoming?

Foreign

If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is

Fully Insured

Fixed annuities provide all of the following EXCEPT

Hedge against inflation

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?

Inspection report

Stranger-oriented life insurance policies are in direct opposition to the principle of

Insurable interest

Who makes up the Medical Information Bureau?

Insurers

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate.

What is the purpose of a conditional receipt?

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

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

Joint and survivor

Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?

Life Expectancy

What is the other term for the cash payment settlement option?

Lump Sum

All of the following statements describe a MEWA EXCEPT

MEWAs are groups of at least 3 employers.

Traditional IRA contributions are tax deductible based on which of the following?

Owners income

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

Paid-up option

Which of the following riders would NOT cause the Death Benefit to increase?

Payor Benefit Rider

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must

Respond to the consumer's complaint.

Equity Indexed Annuities

Seek higher returns

Methods used to pay the death benefits to a beneficiary upon the insured's death are called

Settlement options

The interest earned on policy dividends is

Taxable

All of the following statements are TRUE concerning Debtor Groups EXCEPT:

The amount of insurance on the life of any debtor may exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor.

Which of the following best describes what the annuity period is?

The period of time during which accumulated money is converted into income payments

All of the following are general requirements of a qualified plan EXCEPT

The plan must provide an offset for social security benefits.

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium.

What is the purpose of the buyers guide?

To allow the consumer to compare the costs of different policies

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

To keep the policy in force

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

Twisting

If a licensed agent has a change of residence address, the Commissioner must be notified

Within 30 days