ExamFX

What is the typical deductible for basic surgical expense insurance?

$0

An individual purchased a $100,000 joint life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

$100,000

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?

$9,800

COBRA applies to employers with at least

20 employees - Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), any employer with 20 or more employees must extend group health coverage to terminated employees and their families.

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

24

The commissioner of insurance issues a cease-and-desist order and immediately receives as request for the charges to be reviewed in hearing. Within how many days must the hearing be held?

30

Which of the following statement 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

Which is not a characteristic of group health insurance?

A policy is issued to each insured individual

When transacting business in this state an insurer formed under the laws of another country is known as a/an

Allien insurer

Which of the following would be required to be licensed as an insurance producer

An employee who solicits insurance and receives a commission

All of the following are examples of third-party ownership of a life insurance policy Except

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan

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

When must insurable interest exists in a life insurance policy

At the time of application

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

Attained age

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

The accelerated benefits provision will provide for an early payment of the death benefit when the insured

Becomes terminally ill

Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?

Buyer's Guide

To legally transact insurance in this state, an insurer must obtain which of the following?

Certificate of authority

All of the following are duties and responsibilities of producers at the time of application Except

Change any incorrect statement on the application by personally initialing next to the corrected statement.

When delivering a policy, which of the following is an agent's responsibility

Collect payment at the time of delivery

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

According to the entire contract provision, what document must be made part of the insurance policy?

Copy of the original application

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

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 is Not an example of a valid insurable interest

Debtor in the life of the creditor

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 Life

The commissioner has full power and authority to do all of the following Except

Draft insurance laws

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

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusion clause

What does "level" refer to in level term insurance?

Face amount

Which policy component decreases in decreasing term insurance?

Face amount

When possible, what should insurers strive to eliminate from illustrations?

Footnotes and caveats

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

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

Insurable interest

All advertisements are the responsibility of the

Insurer

Who must pay for the cost of a medical examination required in the process of underwriting?

Insurer

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an

Interest-sensitive Whole Life

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 anyway and pay the face value to the beneficiary

Which of the following is true about the mandatory free look in a Life insurance policy

It commences when the policy is delivered

Which of the following is correct regarding credit life insurance

It insures the life of a debtor

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 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 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.

Which statement is Not true regarding a straight life policy?

Its premium steadily decreases over time, in response to its growing cash value

Which statement is not true regarding a straight life policy

Its premium steadily decreases over time, in response to its growing cash value

Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?

Joint life

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?

Joint life policy

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

Level term

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

Life paid-up at age 65

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

If a business owner becomes totally disabled, a Business Overhead Expense policy will pay all of the following EXCEPT

Loss of the owner's income

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices

Making comparisons between different policies

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

Notice regarding replacement

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

Ownership

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

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

Premium mode

A couple owns a life insurance policy with 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

All of the following are requirements for an individual to be licensed Except

Provide a financial Statement

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

Which of the following is not one of the three types of term coverage based on what happens the face amount during the policy term?

Renewable

The ownership provision entitles the policyowner to do all of the following Except

Set premium rates

Which of the following insurers are owned by stockholders?

Stock

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

Substandard risk

Children's riders attached to whole life policies are usually issued as what type of insurance?

Term

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?

Term

Which of the following may be included on an insurance advertisement

Testimonials from compensated individuals

An agent discovers his newest client was the result of a referral. To show his thanks to the referring customer, the agent could

Thank the customer.

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

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

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

The cash value available to the policyowner

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 agent receives an emergency cease and desist order for chronically misrepresenting his insurance policies. The agent knows that he did not commit the violations stated in the emergency cease and desist order. He wants to contest the charges in a court hearing. Which of the following is true?

The hearing must be held within 30 days of receiving a request, unless both parties agree to a later date.

Who bears all of the investment risk in a fixed annuity?

The insurance company

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

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

The old policy should stay in force until the new policy is issued

What is the advantage of reinstating 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 are true regarding a decreasing term policy Except

The payable premium amount steadily declines throughout the duration of the contract.

All of the following statements are true regarding installments for a fixed amount except

The payments will stop when the annuitant dies

Which of the following best defines the "owner" as it pertains to life settlement contract?

The policy of the life insurance policy

Which of the following best defines the owner as it pertains to life settlement contracts

The policyowner of the life insurance policy

Which of the following is TRUE regarding the premium in term policies?

The premium is level for the term of the policy.

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

The same face amount as in the whole life policy

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

What is the purpose of COBRA?

To allow continuation of health insurance coverage for terminated employees

Which of the following is the best reason to purchase life insurance rather than an annuity?

To create an estate

According to the rights of renewability rider for cancellation policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company

In a survivorship life policy, when does the insurer pay the death benefit?

Upon the last death

All of the following benefits are available under social security except

Welfare benefits

An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?

When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of God Health

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

When the insurer's underwriter approves coverage

Which of the following types of policies will provide permanent protection?

Whole life

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than

With the policy

Representations are written or oral statements made by the applicant that are

considered true to the best of the applicant's knowledge

In Texas, the state's continuing education requirement

consists of completing 24 hours of CE each biennium

A guaranteed renewable disability insurance policy

is renewable at the insured's option to a specified age

A participating insurance policy may do which of the following?

pay dividends to the policyowner

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 this policy

required a premium increase each renewal