test

all of the following are general requirements of a qualified plan except

the plan must be temporary

An insurer incorporated under the laws of another state but doing business in this state is considered

foreign

what is primary duty of the commissioner of insurance?

approve policy forms and rates

sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death

insuring clause

insurance contracts are unilateral in nature. what does that mean

only one party makes a promise.

All of the following are true of annually renewable term insurance EXCEPT

Proof of insurability must be provided at each renewal

All of the following are true regarding a producer's fiduciary responsibilities EXCEPT

producers may commingle personal funds with company funds.

to qualify for an original certificate of authority, what minimum capital stock or surplus must an insurer have

1.5 million

What would the insurance company do if an insured under a whole life policy with an accidental death rider intentionally kills himself a couple months after purchasing the policy?

deny the death benefit but pay the premium

how many hours of continuing education must licensees complete every renewal period on the subject of ethics

3 hours

when the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?

paid-up additions

14) Because of an injury, an insured has been unable to work for 7 months. He wasn't able to pay his life insurance policy premium, yet the policy remained in force. The policy includes

waiver of premium rider

when an insured terminates membership in the insured group, the insured can convert to

whole life without proof of insurability

what is a specific requirement regarding the number of employees in a simple plan?

no more than 100 employees.

which statement best describes agreement as it relates to insurance contracts?

one party accepts the exact terms of the other party's offer.

which of the following is not an indicator of a competent party?

business profession

If the policy summary for a life insurance policy is not given when the application is taken, when must the policy summary be given to the policyowner?

when the policy is delivered

To be valid, an insurance policy must have all of the following EXCEPT

consideration

which of the following is true of level term insurance?

it is temporary protection

which of the following is true regarding pure life annuity settlement option?

it provides the highest monthly benefit

which of the following types of insurance products would be appropriate for an individual with a low income and high insurance needs?

term insurance

which method of dealing with risk is applied when insurance is purchased

transfer

An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change of surrender a life insurance policy of annuity has committed an illegal practice known as:

twisting

Which of the following best describes life annuity with period certain option?

It guarantees benefit payments for life of the annuitant and for a specified period for the beneficiary. When an insured terminates membership in the insured group, the insured can convert to

the family term rider incorporates

Spouse term and children's term

which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity?

accumulation period

all of the following statements are true regarding an ordinary (straight) life policy except

it does not have a guaranteed death benefit

In contrasting stock insurers with mutual insurers, which statement is true?

stock insurers are owned by the shareholders and issue nonparticipating policies.

if an applicant submits the initial premium with an application, which action constitutes acceptance?

the underwriters approve the application.

when a hearing regarding an insurance matter is requested, all parties must receive

15 days notice

under what circumstances will the contingent beneficiary receive the death benefit

if the primary beneficiary dies before the insured.

when an insurer tries to discourage a policyholder from dropping his/her excising policy, this is called

conservation effort

which of the following elements of an insurance contract requires payment of premium?

consideration

if an individual willfully violates provisions of the fair credit reporting act, what is the maximum civil penalty?

$2500

In a noncontributory group health plan, what percentage of eligible employees must participate before the plan can be put in force?

100% of eligible employees must participate.

all of the following statements about mutual insurance companies are correct except

Policy dividends issued by mutual companies are guaranteed and not taxable

When an individual obtains an insurance license for the primary purpose of writing insurance on him or herself, or for members of his or her immediate family, or business, this is called

controlled business

*Policy loan requests, except for loan requests for payment of due premiums, may be deferred for a period of up to

six months

The owner of a deferred annuity pays $100 in premium one month, and $130 the next month. Which of the following terms best describes this premium payment arrangement?

flexible premium

which of the following is not true regarding a deferred annuity

income payments begin within 1 year from the date of the purchase.

Guaranteeing future dividends is considered to be an unfair or deceptive act known as

misrepresentation

which of the following actions does not constitute false advertising?

requiring applications more quickly than what's reasonablee-state that dividends are not guaranteed

an insurance agent visits a potential client and explains various types of policies. the customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. which term describes what the agent has done?

misrepresentation

when is the company responsible for actions of its agents?

whenever the agent is acting within the conditions of the contract.

An insured decides to surrender his Whole Life insurance policy. the cash value at surrender is higher than the premiums paid into the policy due to interest. what part of surrender value would be income taxable?

The difference between the premiums paid and the cash value

An annuitant pays the annuity premium on the 14th of each month. Which of the following best describes this arrangement?

level

in which of the following cases the insured must consent in writing to the life insurance contract?

an employer is purchasing life insurance on the key employee.

considering the principles of liquidity, how would the policy owner use todays cash values in a life insurance policy?

use it for emergency expenses

Which of the following would be likely to establish a SEP

small employers

An individual has a $200,00 convertible term life insurance policy. If he chooses, he can:

Convert to a whole life policy for the same face amount without proof of insurability

the entire contract includes all of the following Except

a buyers guide

An insurer mails an insurance policy to a new policyowner. When the insurer relinquishes control of the policy, the policy is considered

delivered

what is the main purpose of requiring licenses for people who transact insurance?

protect the general public

According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

the primary beneficiary died before the insured

at what point would an automatic premium loan be generated?

following the grace period

Which dividend option increases the death benefit?

Paid-up additions increase the death benefit of the original policy by whatever amount the dividend will buy.

38. The policy owner has an option pledge the life insurance policy as collateral for the blank. This is called:

a collateral assignment

In a life insurance application, all of the following signatures will be required EXCEPT

the home office underwriter

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this Policyowner select?

joint and survivor

what is the most common name for a single policy that is designed to insure two or more lives with a standard premium and that pays the death benefit upon the first death

joint life

an insurace company that is owned by the policyholders is called a

mutual insurance company

dividends received on participating life insurance policies are

not taxable because they are a return of unused premiums

Among the applicants in the same class and life expectancy, which of the following factors can be used to influence premium rates?

occupation

which of the following would not trigger the payment of accelerated death benefits?

permanently disabled

which of the following will not be included in the buyers guide?

specific info about the policy.

Refusing to pay a claim without conducting a reasonable investigation of all available information where material facts are in dispute

cease

insurers cannot transact insurance in this state without a

certificate of authority

Two individuals of the same age, health status, and life expectancy apply for Individual insurance coverage. When policies are issued by the same insurer, the premium rates are different based on the insureds race. What practice does this describe?

unfair discrimination

With Adjustable Life, the owner can change all of the following EXCEPT:

the insured

how often will the commissioner examine domestic insurers?

at least once every 5 years.

an individual receives a lump-sum inheritance. he would like to use the money to create a lifetime income since he'll be retiring soon. he purchases an annuity and wishes to receive payments beginning in 2 months. what did he buy?

single premium immediate annuity

An individual purchases a life insurance policy and lists his parents as the beneficiaries. He is able to change beneficiaries at any time. What type of beneficiary designation does the policy have?

revocable

life insurance creates an immediate estate. which of the following best explains this statement?

the face value of the policy is payable to the beneficiary upon the death of the insured.

which of the following has the right to change the settlement option in a life insurance policy?

the policy owner at any time during the life of the insured.

A loss resulting from which of the following would qualify for the accidental death rider coverage?

an automobile accident

what is the difference between a straight life policy and a 20 pay whole life policy

premium payment period

what happens to the face amount of a whole life policy if the insured reaches the age of 100?

the face amount is paid to the insured.

During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of

defamation

according to the states rules regulating the advertisement of life insurance, advertisement does not include which of the following?

material prepared by the insurer for training new agents

an example of alien insurer doing business in this state is one of formed under the laws of

mexico

which of the following types of policies would not be subject to the life insurance solicitation regulation?

annuities

an insurer who transacts insurance in this state but whose articles of incorporation are registered in canada is considered what type of insurer?

alien

an applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer no to the question pertaining to heart problems on their application. their answer is considered to be

representation

the renewable provision allows the policyowner to renew the coverage at the expiration date

without evidence of insurability

prior to soliciting an insurance application the insurer must provide which of the following to all prospective purchasers

buyer's guide

which of the following are characteristics of term life insurance?

temporary protection, renewability, no cash value