simulation

By how many days does the discontinuance of a group insurance policy reduce the time limit for providing notice of claim or proof of loss?

0 days

The company owes premium money to the insured. The insurer gave the funds to the producer to return to the insured. Within how many days must the producer pay the insured?

5

f a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

The minimum number of credits required for partially insured status for Social Security disability benefits is

6 credits.

Which of the following is the required number of participants in a contributory group plan?

75%

All of the following could own group life insurance EXCEPT

A group needing low-cost life insurance.

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?

A minor son of the insured

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

A presentation of nonguaranteed elements of a policy.

The requirement that agents must account for all insurance funds collected, and are not permitted to comingle those funds with their own is known as

Fiduciary responsibility.

Both Universal Life and Variable Universal Life have a

Flexible premium.

The automatic premium loan provision is activated at the end of the

Grace period.

In life insurance policies, cash value increases

Grow tax deferred.

A Universal Life insurance policy has two types of interest rates that are called

Guaranteed and Current.

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Pay the policy proceeds only if it would have issued the policy.

Which of the following is another term for the accumulation period of an annuity?

Pay-in period

All of the following are true regarding insurance policy loans EXCEPT

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

In which of the following instances would the premium be tax deductible?

Premiums paid by an employer on a $30,000 group term life insurance plan for employees

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.

A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the

Revocable beneficiary

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

Settlement option.

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

The insured may choose to convert to term or permanent individual coverage.

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.

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract.

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

The Waiver of Cost of Insurance rider is found in what type of insurance?

Universal life

Which of the following is true regarding taxation of dividends in participating policies?

dividends are not taxable

When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

fixed amount

All of the following are Nonforfeiture options EXCEPT

interest only

A producer received a group master policy and certificates for delivery to the insured. Within how many days must the policy and certificates be delivered?

10 calendar days

The buyer's guide and policy summary can be delivered with the policy or earlier if the policy contains an unconditional refund provision of at least

10 days

Licensees must file with the Department a branch office registration form within how many days before business is first conducted there?

30

All of the following candidates for a resident producer license may be exempted from the examination requirement EXCEPT

A resident producer licensed for Property and Casualty insurance applying for a Life insurance license.

The death protection component of Universal Life Insurance is always

Annually Renewable Term

A group of 4 entrepreneurs decides to open an insurance company. Which of the following is true?

At least 1 member must be a licensed insurance producer.

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

Automatic premium loan

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT

Being age 65.

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

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

An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called

Consideration.

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

Coverage ends and the policy cannot be reinstated.

Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?

The employer is the owner and beneficiary.

An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?

$10,000, no tax consequence

Which component increases in the increasing term insurance?

Death benefit

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

Which of the following types of insurance policies is most commonly used in credit life insurance?

Decreasing term

All of the following statements concerning dividends are true EXCEPT

Dividend amounts are guaranteed in the policy.

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer.

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection.

Which of the following information will be stated in the consideration clause of a life insurance policy?

The amount of premium payment

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

The beneficiary

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

Which of the following would be considered an unfair claims settlement practice?

Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

Employer contributions made to a qualified plan

Are subject to vesting requirements.

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

Level term

All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT

The employer can receive a current tax deduction for any contributions made to the plan.

If an insured continually uses the automatic premium loan option to pay the policy premium,

The policy will terminate when the cash value is reduced to nothing.

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy.

Which of the following is TRUE about nonforfeiture values?

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

All of the following are requirements for life insurance illustrations EXCEPT

They must be part of the contract.

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

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 key person insurance?

To lessen the risk of financial loss because of the death of a key employee

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

Universal life

What kind of policy allows withdrawals or partial surrenders?

Universal life

Which of the following Life Insurance policies would be considered interest sensitive?

Universal life

Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

Universal life

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

Illegal

Annually renewable term policies provide a level death benefit for a premium that

Increases annually

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

Signed waiver of premium.

Which of the following statements about a suicide clause in a life insurance policy is true?

Suicide is excluded for a specific period of years and covered thereafter.

All of the following are considered limited lines of authority EXCEPT

Surplus lines.

The premiums paid by the employer in a business life insurance policy are

Tax deductible by the employer.

All of the following would be different between qualified and nonqualified retirement plans EXCEPT

Taxation on accumulation

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

mutual

Another name for a substandard risk classification is

rated

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

straight life

The interest earned on policy dividends is

taxable

Solicitation rules would apply to which of the following types of coverage?

whole life

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring clause

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

Interest only option