Which of the following best defines target premium in a universal life policy?

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

medical background

Which of the following premium modes would result in the highest annual cost for an insurance policy?

monthly

Events in which a person has both the chance of winning or losing are classified as

pure risk

What method do insurers use to protect themselves against catastrophic losses?

reinsurance

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

What method is used to determine the taxable portion of each annuity payment?

Exclusion ratio

Which of the following is used to determine the annuity amounts that are not taxable?

Exclusion ratio

During partial withdrawal from a universal life policy, which portion will be taxed?

Interest

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

$10,000

Which of the following may contribute to proof of death for the purposes of insurance benefits payment?

1. A death certificate

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

1. Agent's report

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?

3. Return of premium

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

Payor benefit

An applicant wants to buy a policy that has a cash value element. Which type should she buy?

Permanent

Which of the following is an example of a producer's fiduciary duty?

3. A duty to base all transactions upon the principle of Utmost Good Faith.

An independent adjuster may include which of the following?

3. A firm who acts on behalf of the insurer

Which of the following individuals must pass a written examination to be licensed as a life insurance agent?

3. A resident of New York wishing to transact business in New York

In insurance, an offer is usually made when

3. An applicant submits an application to the insurer.

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

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

All of the following are characteristics of group life insurance EXCEPT

3. Certificate holders may convert coverage to an individual policy without evidence of insurability.

A producer must do all of the following when delivering a new policy to the insured EXCEPT

3. Disclose commissions earned from the sale of the policy.

The Superintendent may refuse to issue a license in all of the following situations EXCEPT if the proposed licensee

3. Is from another state.

When a reduced paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?

3. It is reduced to the amount of what the cash value would buy as a single premium.

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?

3. Joint annuity

Which of the following has the right to convert the existing term coverage to permanent insurance?

3. Policyowner

The risk of loss may be classified as

3. Pure risk and speculative risk.

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may

3. Require evidence of insurability.

Which of the following would help prevent a universal life policy from lapsing?

3. Target premium

Which of the following characteristics applies to defined benefit plans but not defined contribution plans?

3. The amount of contributions made by the employer is determined by an actuarial formula.

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to

3. The contingent beneficiary.

Which of the following would NOT fall into the category of costs associated with death?

3. The expense of a vacation for surviving family members

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

3. Vacation travel expenses

How long does a licensee have to notify the Superintendent of a change of address?

30 days

Which concept is associated with "exclusion ratio"?

4. Annuity payments

An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his

4. Attained age.

When must an IRA be completely distributed when a beneficiary is not named?

4. December 31 of the year that contains the fifth anniversary of the owner's death.

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

4. Guaranteed insurability option

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

4. Immediate annuity

Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company, are called

4. Material misrepresentations.

If the Superintendent finds a licensee in violation of an unfair method or unfair practice he or she will issue a

4. Revocation of license.

An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?

4. She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.

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

4. Standard risk is representative of the majority of people.

Your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend

4. Straight life.

Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources?

4. Term

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

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

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

4. The benefit is received tax free.

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

4. The name of the primary and secondary beneficiaries

If the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?

A full death benefit

Your client wants both protection and savings from the insurance and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Life annuity with period certain

Which settlement option provides a single beneficiary with income for the rest of his/her life?

Single Life

Insurance producers must ensure that contracts they recommend are in the best interest of the insured. This is called

Suitability

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

Taxation of contributions

If someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should that person buy?

Term

The initial amount of credit life insurance may NOT exceed

The amount to be repaid under the contract.

Which of the following is a key distinction between variable whole life and variable universal life products?

Variable whole life has a guaranteed death benefit.

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

Which of the following is an example of liquidity in a life insurance contract?

c2. The cash value available to the policyowner

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

cash surrender

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

contingent beneficiary

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

grace pd

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become

larger

Which of the following terms best describe the coverage provided by term policies, as compared to any other form of protection?

least

Which of the following types of insurers is owned by stockholders?

stock

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?

2. Universal life

The main difference between immediate and deferred annuities is

2. When the income payments begin.

Can the Superintendent investigate fraudulent claims if they occurred outside of the resident's state according to the Insurance Fraud Prevention Act?

2. Yes. The Superintendent has the power to make an investigation within this state or outside of the state.

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

1. Pay-in period

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

3. The insurer will pay the full death benefit from the group policy to the beneficiary.

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?

3. Universal life

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

4. An index like Standard & Poor's 500.

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?

The policy will terminate when the loan amount with interest equals or exceeds the cash value.

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

1. Paid-up option

Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?

1. Predicted needs of the family after the insured's death.

Which of the following types of agent authority is also called "perceived authority"?

4. Implied

Who has the authority to regulate the issuance and sale of variable contracts?

2. The issuance and sale of variable contracts is not regulated

An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?

1. Accumulation at Interest

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

1. Guaranteed and Current.

Which of the following is TRUE of a qualified plan?

1. It has a tax benefit for both employer and employee.

Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive

1. Nothing; the payments will cease.

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

1. Notice Regarding Replacement

All of the following entities regulate variable life policies EXCEPT

1. The Guaranty Association.

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

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

Which entity determines the amount of accelerated death benefits that will be paid to an insured?

1. The insurer

All of the following are general requirements of a qualified plan EXCEPT

1. The plan must provide an offset for social security benefits.

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

1. Waiver of premium.

The Superintendent may refuse to renew a license if a licensee is receiving more than 10% of the aggregate commissions from controlled business in how many months?

The Superintendent will not renew an agent or broker's license upon finding that the license has been used to write controlled business. Which of the following would be a violation of controlled business practices?

2. 15% of the agent's annual commission is from business sold to the agent's family.

Which of the following may share in the commissions from the sale of a life insurance policy?

2. A licensed life insurance agent of the same insurer involved with the sale of the transaction

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be

2. Adjusted to the insured's age at the time of renewal.

When the partners of a business develop an arrangement whereby should one of them die or become permanently disabled, the other partners would purchase the interest of the deceased or disabled partner at a predetermined price, this is called a/an

2. Business continuation plan.

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

2. Insurable interest.

What is the purpose of a free-look period in insurance policies?

2. It allows the insured to reject the policy with a full refund.

Which of the following best describes the MIB?

2. It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

Which of the following is usually true of a participating life insurance policy?

2. It pays dividends to policyowners.

Which of the following features of the Indexed Whole Life policy is NOT fixed?

2. Policy period

After three years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is this percentage called?

2. Surrender charge

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?