Test4th

Which of the following best defines the unfair trade practice of rebating

Offering an inducement of something of value not specified in the policy

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

Policy dividends issued by mutual companies are guaranteed and not taxable

All of the following are true regarding the federal Fair Credit Reporting act except

reports may be sent to anyone who requests one

A temporary license in this state is valid for

180 days

Which of the following would NOT be eligible for coverage under key person

owner of a shop

Which of the following will be eligible for a tax-sheltered annuity

public school teachers

The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT

purchase of a new home

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

Misrepresentation

If a credit life policy is terminated upon the payment of the death benefit , what happens to the premium paid into the policy ?

The premium is considered earned, so no refund is required.

Variable life insurance is regulated by all of the following entities except

U.S. Department of the Treasury

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

foreign

Where are premiums from fixed annuities invested?

general account

If a loan request is for payment of due premiums on the policy, how soon must the insurer issue a loan?

immediately

Which of the following would be likely to establish a SEP

small employers

Group policies include an incontestability period that last

2 years

An insurer must notify the consumer in writing that an investigative consumer report has been requested , within how many days of the initial request?

3 days

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

Variable insurance and the variable annuities are regulated by

SEC, FINRA, and Departments of Insurance

Which of the following statements regarding HIV testing is not true?

Test results must be sent to the Department of Insurance

If an agent suspects that a fraudulent insurance act has been committed in this state, whom should the agent notify first and foremost?

The Insurance Fraud Unit of the Texas Department of Insurance

Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination

Charging the insured higher premiums based on her race

An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount?

Children's term rider

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

All of the following statements about indexed whole life insurance are correct except

The policy face amount remains level throughout the life of the policy

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

The Commissioner of Insurance must evaluate an insurer's financial condition and its ability to comply with state laws every

5 years

What is the maximum amount of time an insurer may delay payment of a claim without having to pay an additional interest?

60 days

All of the following are true of credit life except

The insured names the beneficiary

Which of the following entities is considered the principal

The insurer issuing a policy

Who is the annuity owner?

The person who purchases the annuity

The entire contract includes all of the following except

Buyer's Guide

How many days notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans

30 days

Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options?

Both guarantee that the principal and interest will be fully paid out

While completing a life insurance application the applicant realizes that she should have answered an earlier question differently. What should the agent do to make the necessary change?

Cross out the incorrect information, write in the correct answer, and have the applicant initial the change

The family term rider incorporates

Spouse term and children's term

An IRA contribution can be made from which of the following?

cash

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

level

A Fraternal Benefit Society

nonprofit benevolent organizations that provide insurance to its members

Insurance contracts are unilateral in nature , what does that mean

only one party makes a promise

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

countersignature

Which of the following losses would likely be covered under accidental death rider

Death caused by a head-on collision

An adjustable life policy can assume the form of

Either term insurance or permanent insurance

At what point would an automatic premium loan be generated

Following the grace period

An individual receives a lump-sum inheritance. He'd 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

Reports required by the Texas Department of Insurance based on complaints about unfair settlement practices must contain information about all of the following EXCEPT

The resident state of the claimants

If an insurance company issues a policy even though some questions on the application were unanswered, when can the insurer get the answers to those questions?

Never; the insurer has waived its right to those answers by issuing the policy

cash value guarantees in a whole life policy are called

Nonforfeiture values

Under which of the following conditions would life insurance proceeds be taxable by the federal government

If there is a transfer for value

An illustration used in the sale of a life insurance policy should include a label stating

Illustration

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

In order to reinstate a life insurance policy the insured must do all of the following EXCEPT

Pay next year's premium in advance

What is the difference between straight life policy and 20 pay whole life policy

Premium payment period