Texas Life Insurance Exam

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Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?

Life expectancy

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

Life income

How soon from the termination of debt under a credit life insurance policy must a creditor provide notice to the insurer ?

60 days

How soon from the termination of the under a credit life insurance policy must a creditor provide notice to the insured?

60 days

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a

Joint life annuity

Which of the following is an example of a limited pay life policy?

Life Paid-up at Age 65

Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors ?

Life expectancy

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

The same face amount as the whole life policy

An insured has chosen joy and 2/3 survivor as a settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive

The interest earned on a policy dividends is

taxable

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 best describes an insurance company that has been formed under the laws of this state ?

Domestic

If an annuitant dies before annuitization occurs , what will the beneficiary receive ?

Either the amount paid into the plan or the cash value of the plan , whichever is the greater amount

When the insured selects the extended term nonforfeiture option , the cash value will be used to purchase term insurance with what face amount ?

Equal to the original policy for as long as the cash values will purchase .

If an insured worker has earned 40 quarters of coverage , the worker's status under Social Security disability is

Fully insured

Which of the following would NOT be considered rebating ?

Giving a client a $ 25 pen with the insurer's logo during the insurance application process

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates , without proving insurability , the policy includes a

Guaranteed insurability rider

Stranger - originated life insurance policies are in direct opposition to the principle of

Insurable interes

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent

Which of the following occupations would NOT directly help to qualify someone for the office of Commissioner of Insurance ?

Insurance agent

Which of the following statements is NOT true concerning insurable interest as it applies to life insurance ?

Insuring clause

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

As a field underwriter , a producer is responsible for all of the following tasks EXCEPT

Issue the policy that is requested

Which of the following best describes a misrepresentation ?

Issuing sales material with exaggerated statements about policy benefits

Which of the following is TRUE of a qualified plan ?

It has a tax benefit for both employer and employee.

What is the purpose of a conditional receipt ?

It is intended to provide coverage on a date prior to the policy issue.

Which of the following statements about the reinstatement provision is true ?

It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated .

. A man decided to purchase a $ 100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college . He discovered that his policy

Required a premium increase each renewal

A man decided to purchase a $ 100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college . He discovered that his policy

Required a premium increase each renewal .

When an insured under a life insurance policy died , the designated beneficiary received the face amount of the policy , as well as a refund of all of the premiums paid . Which rider is attached to the policy ?

Return of premium

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

A domestic insurer issuing variable contracts must establish one or more

Separate accounts .

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

Sharing commissions

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

Signed waiver of premium

Which type of life insurance policy generates immediate cash value ?

Single Premium

Which of the following applicants would NOT qualify for a Keogh Plan ?

Someone who works 400 hours per year

Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles ?

Standard risk is representative of the majority of people

Which of the following riders is often used in business life insurance policies when the policyowner needs to change the insured under the policy ?

Substitute insured rider

Which of the following is an example of a producer being involved in an unfair trade practice of rebating ?

Telling a client that his first premium will be waived if he purchases the insurance policy today

Which of the following is NOT the consideration in a policy ?

The application given to a prospective insured

The annuitant dies while the annuity is still in the accumulation stage . Which of the following is TRUE ?

The beneficiary will receive the greater of the money paid into the annuity or the cash value

The annuitant dies while the annuity is still in the accumulation stage . Which of the following is TRUE ?

The beneficiary will receive the greater of the money paid into the annuity or the cash value.

The policyowner of an adjustable life policy wants to increase the death benefit . Which of the following statements is correct regarding this change ?

The death benefit can be increased by providing evidence of insurability

The policyowner of an adjustable life policy wants to increase the death benefit . Which of the following statements is correct regarding this change ?

The death benefit can be increased by providing evidence of insurability .

Which of the following best describes the tax advantage of a qualified retirement plan ?

The earnings in a qualified plan accumulate tax deferred

An insured purchased a 10 - year level term life policy that is guaranteed renewable and convertible . What happens at the end of the 10 - year term ?

The insured may renew the policy for another 10 years , but at a higher premium rate

An insured purchased a 10 - year level term life policy that is guaranteed renewable and convertible . What happens at the end of the 10 - year term ?

The insured may renew the policy for another 10 years , but at a higher premium rate.

If an insurer issued a policy based on the application that had unanswered questions , which of the following with be TRUE ?

The policy will be interpreted as if the insurer waived its right to have an answer on the application .

An individual applies for a life policy . Two years ago he suffered a head injury from an accident , so he cannot remember parts of his past , but is otherwise competent . He has also been hospitalized for drug abuse , but does not remember this when applying for insurance . The insurer issues the policy and learns of his history one year later . What will probably happen ?

The policy will not be affected

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

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.

A life insurance counselor is someone who , for a fee or commission , offers to examine a life insurance , an annuity , or pure endowment policy and gives advice , recommendations or information regarding the policy's terms , conditions , benefits , coverage or premium .

The producer must provide the applicant with a Notice Regarding Replacement .

How are contributions to a tax - sheltered annuity treated with regards to taxation ?

They are not included as income for the employee , but are taxable upon distribution

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policy owner?

Third - party ownership

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner ?

Third - party ownership

The paid - up addition option uses the dividend

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

The paid - up addition option uses the dividend

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

In insurance policies , the insured is not legally bound to any particular action in the insurance contract , but the insurer is legally obligated to pay losses covered by the policy . What contract element does this describe ?

Unilateral

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 CANNOT be included along with illustrations used to sell life insurance ?

Vanishing premium information

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

6 months

After receiving a cease and desist order how many days does an agent have to make a request?

60 days

The insured under a $ 100.000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident . It was determined that the accident was his fault . The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner . In this case , what will the policy beneficiary receive ?

$ 100,000

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

An employee transfers $10,000 in her qualified plan to a traditional IRA, how much will be transferred and what is the tax consequences of a direct transfer?

$10,000, NO tax consequence

Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?

$50,000

If an agent has completed 35 hours of continuing education in one renewal period , how many CE hours will the agent have to complete in the next renewal period ?

24

What is the minimum percentage of licensing total volume of the premiums in a calendar year that must come from business other than control business?

25%

Within how many days are requesting an investigative consumer report messenger and notify the consumer in writing that the report will be obtained?

3 days

After getting a cease and desist order within how many days must a hearing be held?

30 days

How long must an agent keep records of CE course completion?

4 years

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

5 days

The Insurance Commissioner may examine the affairs of any insurer as often as necessary , but not less frequently than once every

5 years

Which of the following statements is not true concerning insurable interest as it applies to life insurance?

A debtor has an insurable interest in the life of a lender.

Which of the following is NOT a possible penalty for a violation of the Insurance Code ?

A fine up to $ 100,000

The two types of assignments are

Absolute and Collateral

Insurance policies are not Jonathan negotiations, and an insured has a little say about is provisions. What contract characteristics describe?

Adhesion

Which of the following is another term for an authorized insurer?

Admitted

Who is considered a nonresident agent?

An agent who resides in another state, but is licensed to write insurance in Texas

In insurance an offer is usually made when

An applicant submits an application to the insurer

The minimum interest rate on an equity indexed annuity is often based on

An index like Standard & Poor's 500

What is a foreign insurer?

An insurer with a home office in another state

The LEAST expensive first-year premium is found in which of the following policies?

Annually Renewable Term

The least expensive first year premium is found in which of the following policies?

Annually Renewable Term.

A universal life insurance policy is best described as an

Annually renewable term policy with a cash value account

A universal life insurance policy is best described as a

Annually renewable term policy with the cash value account

Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?

Annuity certain

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

As of the application date

All of the following are considered unfair or deceptive acts in connection with the sale of insurance EXCEPT

Attempting to settle a claim in which liability is clear

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium

Automatic premium loan

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium ?

Automatic premium loan

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

Cash option

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of Authority

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

Common Disaster Clause

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

When an individual obtains an insurance license for the primary purpose of writing insurance on him- of herself, or for the members of their family this is called

Controlled business

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

Convertible term policy

Which of the following is used to compare the cost of one life insurance policy against another in order to guide prospective purchasers to policies that are competitively priced ?

Cost comparison methods

A long stretch of national economic hardships causes a 7% rate of inflation. A policy owner owner notices that the face value of her insurance policy has been raised 7% as a result. Which policy rider cause this change?

Cost of a Living Rider

A rider that may be attached to a less insurance policy that adjusts The face amount based upon a specific index, such as a consumer price index, is called

Cost of living rider

A key person insurance policy can pay for which of the following?

Costs of training a replacement

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

Coverage ends and the policy cannot be reinstated

Which of the following is not allowed in credit life insurance?

Creditor requiring that a debtor buys insurance from a certain insurer

Which of the following must be included in all life insurance advertisement?

Identity of the actual insurer

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of 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

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

Decreasing term

Which of the following actions is NOT in violation of the Unfair Settlement Practices Act?

Denying an unsubstantiated claim

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination

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

Dividends from a mutual insurer.

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

Entire Contract

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase

When the insured selects the extended term known for non-forfeiture option, the cash value will Be used to purchase Turman Sherance with white face amount?

Equal to the original policy for as long as the cash values will purchase.

In the Executive Bonus plan who is the owner of the policy and who pays the premium?

Executive is the owner, and the executive pays the premium

Which Nonforfeiture option has the highest amount of insurance protection

Extended term

Which nonforfeiture option has the highest amount of insurance protection?

Extended term

An agent selling variable annuities must be registered with

FINRA

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.

Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?

Fraternal benefit society

Which is true about the cash surrender nonforfeiture option

Funds exceeding the premium paid are taxable as ordinary income

Two attorneys operator practice as a partnership. They want to start a new program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose

HR-10 (Keogh Plan)- self employed n their employees

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider . In which of the following scenarios will the rider waive the payment of premium ?

If the father is disabled for more than 6 months

The medical information bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons

As a field underwriter, a producer is responsible for all of the following tasks EXCEPT

Issue the policy that is requested

Which of the following best describes misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate.

Which of the following is correct regarding credit life insurance?

It insures the life of a debtor

If a retirement plan or annuity is "qualified," this means

It is approved by the IRS

Which of the following is NOT true regarding a Certificate of Authority

It is issued to group insurance participants

Which of the following is not true regarding a Certificate of Authority?

It is issued to group insurance participants

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants.

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

Which is not true regarding straight life policy?

It's premium steadily decreases over time, in response to its growing cash value

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?

Joint Life

All advertisements are the responsibility of the

insurer

An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?

Limited Pay Life

What is the other term for the cash payment settlement option ?

Lump sum

An insurer advertise a health policy that is covered by the life and health insurance guaranty association. The advertisement includes a short list of benefits and approximate rates. The end of the advertisement include settlement that protection is provided by the guarantee association. Which of the following is true?

Mentioning the guarantee association and advertising is an unfair practice

What is the term for how frequently a policy owner is required to pay the policy premium?

Mode

If a life insurance policy develops cash value faster than a seven pay whole life contract it becomes a

Modified endowment contract

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

On a participating insurance policy issued by mutual insurance company, dividends paid to the policy holders are

Not taxable since the IRS treats them as a return of a portion of the premium paid

Which of the following documents must be provided to the policy owner or applicant during policy replacement?

Notice Regarding Replacement

During replacement of life insurance, a replacing insurer must do which of the following?

Obtain a list of all life insurance policies that will be replaced

If a person is compensated for a testimonial and an advertisement which of the following statements should be included in the advertisement?

Paid endorsement

If a person is compensated for a testimonial in an advertisement, which of the following statements should be included in the advertisement?

Paid endorsement

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

Pay-in period

Which of the following is NOT true about joint and survivor annuity benefit option?

Payments stop after the first death among the annuitants.

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

Who might receive dividends from a mutual insurer?

Policyholders

Which of the following will be included in a policy summary?

Premium amounts and surrender values

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a

Premium receipt

Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?

Premiums are not tax deductible as a business expense.

A couple owns a life insurance policy with a children's term writer. Their daughter is reaching the maximum age of dependent covers, 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

What form of annuity settlement options provides payments to a new it for the rest of the anyone's life and ceases at the annuitants death?

Pure life

Which of the following best describes a pure life annuity settlement option?

Pure life provides payments for as long as the annuitant is alive.

Another name for a substandard risk classification is

Rated

According to the state nonforfeiture law for life insurance policies , insurers must offer at least one of the following nonforfeiture options EXCEPT

Reduction of premium

The Federal Fair Credit Reporting Act

Regulates consumer reports .

The regulations regarding replacement apply to which of the following ?

Renewable term

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

Replacement

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

Revocable beneficiary

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

Settlement option

The interest earned on policy dividends is

Taxable.

A 60 yr old participant in a 401(k) plan takes a distribution and rolls over to an IRA within 60 days. Which of the following is true?

The amount of the distribution is reduced by the amount of a 20% withholding tax

Which of the following is not true regarding the Annuitant

The annuitant cannot be the same person as the annuity owner

Which of the following is not the consideration and a policy?

The application given to a prospective insured.

Upon the death of the insured, the primary beneficiary discovers that the insured shows interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit

The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability.

Which of the following best describes the tax advantage of a qualified retirement plan?

The earnings in a qualified plan accumulate tax deferred

Which of the following is incorrect concerning a noncontributory group plan

The employees receive individual policies

When a life insurance policy was issued the policy owner designated a primary in a contingent beneficiary. Several years later, both the insured in the primary beneficiary die in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?

The insured's contingent beneficiary

All of the following are TRUE statements regarding the accumulation an interest option EXCEPT

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

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 NOT required on an illustration used in the sale of a life insurance policy?

The name of the primary and secondary beneficiaries

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

The original age is used for premium determination.

In a life settlement contract, whom does the life settlement broker represent?

The owner

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT

The policy is owned by the company

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?

The policy will be interpreted as if the insurer waived its right to have an answer on the application

. An agent explains the details of a life insurance policy to a client . The agent does not realize , however , that the state has recently rewritten two of the provisions . As a result , the agent inadvertently misrepresents the policy , making it more attractive than it really is . What best describes this situation ?

There is no misconduct

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 a disclosure statement in life insurance policies?

To explain features and benefits of a proposed policy to the consumer.

What is the main purpose of the regulation on life insurance policy illustrations?

To help customers make educated decisions In buying life insurance

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

To keep the policy in force

What is the purpose of a fixed-period settlement option?

To provide a guaranteed income for a certain amount of time

There is a limit for withdrawal and the insurer charges a fee. What type of policy does the insured have?

Universal Life

All of the following are true regarding the convertibility option under a term life insurance policy except

Upon conversion, the death benefit of the permanent policy will be reduced by 50%

What is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military?

War or military service

Which of the following is a statement that is guaranteed to be true and if not may breach an insurance contract

Warranty

All of the following benefits are available under Social Security EXCEPT

Welfare benefits

In forming an insurance contract, when does acceptance usually occur

When an insurer's underwriter approves coverage

Informing an insurance contract, when does acceptance usually occur?

When the insurers underwriter approves coverage

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant

With the policy

Which of the following statements is not true concerning insurable interest as it applies to life insurance?

a debtor has insurable interest in the life of a lender

All of the following are personal uses of life insurance except

buy-sell agreement

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?

collateral assignment

An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after one year since the annuity was purchased. What type of annuity is it?

deferred

What required provision protects against unintentional lapse of the policy?

grace period

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

the insured's premiums will be waived until she is 21.

The Commissioner of Insurance issues a Cease and Desist Order to an agent . If the agent wishes to contest the charges in court , how many days after the order was issued does the agent have to make the request ?

60 days

According to the Entire Contract provision , a policy must contain

A copy of the original application for insurance .

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

A presentation of nonguaranteed elements of a policy .

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

A presentation of nonguaranteed elements of a policy . .

Who is considered a nonresident agent ?

An agent who resides in another state , but is licensed to write insurance in Texas .

Who can make a fully deductible contribution to a traditional IRA ?

An individual not covered by an employer - sponsored plan who has earned income

consumer report been provided , the report may contain all of the following information EXCEPT the applicant's

Ancestry

Which of the following is TRUE about a class designation ?

Beneficiaries are not identified by name

All of the following statements are correct regarding credit life insurance EXCEPT

Benefits are paid to the borrower's beneficiary .

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

. An insurance professional advises a client regarding the benefits of her life insurance policy , in exchange for a fee . Which of the following terms best describes this type of insurance professional ?

Counselor

The term " fixed " in a fixed annuity refers to all of the following EXCEPT

Death benefit

Variable Whole Life insurance is based on what type of premium ?

Level fixed

Which of the following riders added to a life insurance policy can pay part of the death benefit to the insured to cover expenses incurred in a nursing or convalescent home ?

Long - term care

If a settlement option is not chosen by the policyowner or the beneficiary , which option will be used ?

Lump sum

On a participating insurance policy issued by a mutual insurance company dividends paid to policyholders are

Not taxable since the IRS treats them as a return of a portion of the premium paid .

Under a pure life annuity , an income is payable by the company

Only for the life of the annuitant

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other insured rider

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

Pay - in period

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 NOT true about a joint and survivor annuity benefit option ?

Payments stop after the first death among the annuitants

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

Payor Benefit

All of the following are mandatory life insurance policy provisions EXCEPT

Policy backdating .

All of the following are true regarding insurance policy loans EXCEPT

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

All of the following are characteristics of group life insurance EXCEPT

Premiums are determined by the age , sex and occupation of each individual certificate holder .

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

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 .

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

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

Rebating

The policyowner pays for her life insurance annually . Until now , she has collected a nontaxable dividend check each year . She has decided that she would rather use the dividends to help pay for her next premium . What option would allow her to do this ?

Reduction of premium

Theregulations regarding replacement apply to which of the following ?

Renewable term

Why is an equity indexed annuity considered to be a fixed annuity ?

it has a guaranteed minimum interest rate .


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