State board test life insurance part 1

If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?

$3,000

If a policy is in danger of being terminated due to a nonpayment of premium how many days before the termination must an insurers end written notice to the policy owner

30 days

Within how many days does a licensee have to inform the commissioner of a change of address

30 days

If a licensee doesn't earn 24 hours of continuing Education by the license review date the license will be suspended for up to how many days

90 days

In this state a temporary license may be issued for any of the following reasons EXCEPT

A producer's retirement

Which of the following would not be allowed as a part of a Lise insurance policy issued in Michigan

A provision that allows the effective date of the policy to be backdated up to 8 months in order to effect a lower premium rate for the insured

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

Increases annually

Which statement regarding insurance risks is NOT correct

Insureds cannot be randomly selected

In a group life insurance policy the employer may select all of the following EXCEPT

The beneficiary

Which of the following best discribes the concept that the insured pays a small amount of premium for a large amount of risk in the part of the insurance company

Aleatory

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 accumulated money is converted into a stream of income during which time period

Annuitization period

Graded-Premium whole life policy premiums are typically lower initially but gradually increase for a period of 5-10 years. After the period of increase the premiums will

Be level thereafter

In terms of social security what is the name for the time period after the youngest child of a family turns 16 and before the surviving spouse may start receiving retirement benefits

Blackout period

Producers are permitted to share or split commissions providing that

Both are properly licensed got the line of insurance

All of the following are considered unfair trade practices in the business of insurance EXCEPT

Boycott

If an applicant for a life insurance is found to be a substandard risk the insurance company is most likely to

Charge a higher premium

What a policy owner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals this is called

Class designation

M, who is not licensed as an insurance agent works part time in her father insurance agency . M may perform all of the following duties EXCEPT

Collect premium for in-force policies and explain coverages to clients that have existing policies written by her father

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of

Concealment

In Michigan the states continuing education requires

Consists of completing 24 hours of CE each biennium

Which of the following is NOT typically excluded from life policies

Death due to plane crash for a fare-paying passenger

All of the following are examples of risk retention EXCEPT

Deductibles

All of the following are personal uses of life insurance EXCEPT

Estate creation

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.

In a direct rollover how is the money transferred from one plan to the new kne

For trustee to trustee

According to the non forfeiture law if the owner decides to surrender a deferred annuity prior to annuitization the owner is entitled to which of the following

Guaranteed surrender value

What insurance concept is associated with the names Weiss and Fitch

Guides describing company financial integrity

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyways and pay the face value to the beneficiary

What would be an advantage to naming a contingent (or secondary) beneficiary in a life insurance policy

It determines who receives policy benefits if the primary beneficiary is deceased.

What is the benefit of choosing extended term as a nonforfieture option

It has the highest amount of insurance protection

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 TRUE regarding the annuity period

It may last for the lifetime of the annuitant

Which of the following is true about the premium on the children's rider in a life insurance policy

It remains the same no matter how many children are added to the policy

In modified life policies what happens to the premium

It varies at the beginning but levels out by the end of the third year

Which of the following information about the applicant is NOT included in the General Information section of the application for insurance

Medical background

What is the major difference between a stock company and a mutual company

Ownership

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply he policy dividend to increase the death benefit. The dividend option that the insured has chosen is called

Paid-up additions

Which of the following allows the insurer to relieve a minor insured from premium payments the minor's parents have died or become disabled

Payor benefit

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required

Another name for substandard risk classification is

Rated

Which services are associated with standard and poors and AM best

Rating the financial strength of insurance companies

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

Revocable beneficiary

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability

Sexual orientation

Which of the following types of risk will result in the highest premium

Substandard risk

The annuity owner dies during the accumulation period without naming a beneficiary annuity cash value exceeds premiums paid. Which of the following is true

The cash value will be paid to the annuitants estate

Which of the following could qualify for a temporary license

The designee of a producer that is called to actice service with the navy

A 40-year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarries and dies at age 61. Leaving 2 grown up children. Assuming he never changed the beneficiary the policy proceeds will go to

The insured estate

All of the following are TRUE statements registering the accumulation at interest option EXCEPT

The interest is created at a rate specified by the policy

Which of the following is true regarding a market value adjusted annuity

The owner is guaranteed a fixed interest rate for a specific period of time

All of the following are true of a key person insurance EXCEPT

The plan is funded by permanent insurance only.

How must a replacing producer respond to an applicant wishing to replace existing life insurance

The producer must collect the existing policies and turn them over to the replacing insuer

The paid up addition option uses the dividend

To purchase smaller amount of the same type of insurance as the original policy

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit

Universal Life - Option A

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

Vacation travel expenses

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

Which of the following is the most common way to transfer risk

purchase insurance

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

the employer is the owner and beneficiary

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

twisting