Simulate Your Exam 1

For how long is an insurance company allowed to defer policy loan request?

6 months

What is the waiting period of a waiver of premium rider in life insurance policies

6 months

What documentation grants express authority to an agent?

Agent's contract with the principal

Which of the following applicants could be insured charge a higher rate of premium in that violate regulations regarding unfair discrimination

An applicant who is a smoker

When an annuity is written, whose life expectancy is taken into account?

Annuitant

All of the following are true of the federal tax advantages of a qualified plan, except

At distribution, all amounts received by the employee are tax free.

Which of the following individuals must have insurable interest in the insured

Beneficiary

Which of the following is a feature of a variable annuity?

Benefit payment amounts are not guaranteed

In terms of Social Security, what is the name for the time. After the end, this child of a family turn 16 and before the surviving spouse may start receiving retirement benefits

Blackout period

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

Cash option

All of the following are duties and responsibilities of producers at the time of application, except

Change any incorrect statement on the application by personally initialing next to the corrected statement.

Representations are written, or oral statements, made by the applicant that are

Considered true to the best of the applicant's knowledge

Which of the following would least likely be considered a legitimate need that would be paid by insurance proceeds

Vacation travel expenses

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy, which of the following insurance principles has the insurer violated

consideration

The type of policy that can be changed from one that does not accumulate cash value to the one that does is a

convertible term policy

The premium of a survivorship life policy compared with that of a joint life policy would be

lower

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

one-year term option

Which of the following is not one of the three types of term coverage based on what happens to the face amount during the policy term?

renewable

A domestic insurer issuing variable contracts must establish one or more

separate accounts

All of the following are true regarding insurance policy loans, except

Policy loans can be made on policies that do not accumulate cash value.

What describes the specific information about a policy?

Policy summary

Which nonforfeiture option provides coverage for the longest period of time

Reduced Paid-Up

The following are features of the indexed universal life except

Sale of this product requires a securities license.

A hazard is best defined as:

Something that increases the chance of loss

Which of the following policies would be classified as a traditional level premium contract?

Straight life

All of the following statements about equity, indexed annuities are correct, except

The annuitant receives a fixed amount of return

A corporation is the owner and beneficiary of the key person life policy if the corporation collects the policy benefit then

The benefit is received tax free

Who is the owner and who is the beneficiary on a key person life insurance policy?

The employer is the owner and beneficiary

All of the following are true statements regarding the accumulation at interest option, except

The interest is not taxable since it remains inside the insurance policy.

Which of the following is true about nonforfeiture values?

They are required by state law to be included in the policy.

What is the purpose of settlement options?

They determine how death proceeds will be paid

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

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

Which of the following is not a goal of risk retention?

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

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

To prevent the policy from lapsing

What is the time period called during which the surviving spouse of the insured does not receive Social Security income benefits

blackout period

Which of the following would describe a legal document which would dictate who can buy a deceased partners share of a business and for what amount?

buy-sell agreement

The provision which states that both the policy and a copy of the application form the contract between Policyowner, and the insurer is called the

Entire Contract

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusions

Under a 20 pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

For 20 years or until death, whichever occurs first.

At the time the insured purchased her life insurance policy, she added a rider that would allow her to purchase additional insurance in the future without having to prove insurability. This writer is called

Guaranteed insurability

What are two components of a universal policy

Insurance and cash account

Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity

Insurer's guaranteed minimum rate of interest

All of the following are nonforfeiture options, except

Interest only

Which of the following is not true regarding the life with guaranteed minimum annuity settlement option

It does not guarantee that the entire principal amount will be paid out.

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date earlier than the date of the issuance of the policy.

Which of the following is not true regarding the accumulation period of an annuity

It would not occur in a deferred annuity.

If a life insurance policy increases significantly in face amount when the insured reaches a specified age, what type of policy is this?

Jumping juvenile policy

Which of the following settlement options in life insurance is known as straight life

Life Income

Which of the following is not a characteristic of an insurable risk

Loss must be catastrophic