Final Exam Primerica
In a noncontributory group policy
100% of eligible employees must participate
Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?
100% participation of members is required in noncontributory plans
When the Superintendent holds a hearing for the purpose of examining evidence against a licensee charged with violation of Maine insurance laws, the licensee must receive how much prior notice of such hearing?
14 days
The policy summary must state the effective policy loan annual percentage interest rate for the policy's first
20 years
What is the minimum number of continuing education hours that must be completed on the topics of ethics?
3
Insurers must keep transaction records for at least
3 years
The Superintendent has a duty to examine each domestic insurer admitted to transact insurance in Maine at least once every
3 years
If by an order of the Superintendent, a person is a party to a hearing, how many days after receipt of notice does the person have for an appeal
30 days
Should an insurer terminate the appointment of an insurance producer for any reason not set forth in the law, the insurer must notify the Superintendent within
30 days
After the Superintendent has ordered a hearing, a person who is not a party to the hearing, but who is aggrieved by the order may appeal within how many days?
40 days
The term of service for the Superintendent of Insurance is
5 years
Policy loan request, except for loan requests for payment of due premiums, may be deferred for a period of up to
6 months
Which of the following is the required number of participants in a contributory group plan?
75%
Max has held a temporary license for 90 days. How many more days will the license be effective?
90
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
Adjusted to the insured's age at the time of renewal
Which of the following is NOT one of the 3 kinds of life insurance illustration defined in Maine state law?
Advanced illustration
Which of the following CANNOT knowingly charge as premium or other charge applicable for the insurance, any amount that is not shown in the policy?
An insurance producer
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 a/an
Annually Renewable Term policy with a cash value account
In order to get a nonresident license in this state, a producer must
Apply and pay a fee to a nonresident state that reciprocates
If the insurer does not provide the applicant with a basic illustration, it must provide a policy summary. When must the policy summary be delivery?
At the time of policy delivery
Which of the following best describes fixed-period settlement option?
Both the principal and interest will be liquidated over a selected period of time
Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?
Buy-sell agreement
What does "liquidity" refer to in a life insurance policy?
Cash values can be borrowed at any time
The Superintendent will examine the affairs of any insurer to determine all of the following EXCEPT
Certificate of Authority
Which of the following elements of an insurance contract requires payment of premium?
Consideration
A licensee is paid solely to advise people about their insurance contracts. What kind of license did he have to obtain in order to do this legally?
Consultant
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as
Contracts of adhesion
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated
What is another name for interest-sensitive whole life insurance?
Current assumption life
Insurance producers must comply with all of the following state continuing education (CE) requirements EXCEPT
Excess credit hours must be carried over from previous licensing periods
Which nonforfeiture option has the highest amount of insurance protection?
Extended Term
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
Fixed Period
Which is TRUE about the cash surrender nonforfeiture option?
Funds exceeding the premium paid are taxable as ordinary income
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die
Annually renewable term policies provides a level death benefit for a premium that
Increases annually
A Return of Premium term life policy is written as what type of term coverage?
Increasing
What are the two components of a universal policy?
Insurance and cash account
The Medical Information Bureau (MIB) was created to protect
Insurance companies from adverse selection by high risk persons
During the partial withdrawal from a universal life policy, which portion will be taxed?
Interest
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
Which of the following best describes annually renewable term insurance?
It is level term insurance
What statement is NOT true regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value.
What is the other term for the cash payment settlement option?
Lump Sum
A limited producers licenses can be produced by the Superintendent in all the following categories EXCEPT
Mortgage contracts
Cash Value guarantees in a whole life policy are called
Nonforfeiture Values
Which of the following is consideration on the part of an insurer?
Paying a claim
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
Which of the following will be included in a policy summary
Premium amounts and surrender values
Which of the following individuals would be licensed to sell insurance?
Producer
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
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
Which nonforfeiture option provides coverage for the longest period of time?
Reduced Paid-Up
If an agent wishes to sell variable life policies, what license must the agent obtain?
Securities
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?
Size of each installment
Which of the following actions does NOT constitute false advertising?
Stating that dividends are not guaranteed
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection
Variable life insurance is regulated by all of the following entities EXCEPT
The U.S. Department of treasury
Who is responsible for the payment of an insurance producer's appointment fee?
The appointing insurer
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
If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination?
The insurer
By what day must producers complete their continuing education?
The last date of the producer's birth month
Who pays the expenses of the examiners used in an examination required by the Superintendent?
The one being edxamined
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
Back in college, Bob was arrested on drug charges that were eventually erased from his records. After completing Medical School, he applies for a disability policy and does not reveal this information. His is issued a standard policy. Seventeen months later, he incurs a substantial claim due to a back injury. While investigating the circumstances of the claim, the insurance company discovers the earlier drug use. What will most likely happen?
The policy will be voided
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
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
Under an extended term nonforfeiture option, the policy cash value is converted to
The same face amount as in the whole life policy
An insured has chosen joint and 2/3 survivor as the 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 Superintendent may issue a temporary nonrenewable license without requiring an examination in all of the following cases EXCEPT
To an individual who purchases an existing insurance agency but has not taken the state license examination
What is the purpose of establishing the target premium for a universal life policy?
To keep the policy in force
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life- Option A
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
Universal life
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
When can an insurance producer who does not have an appointment with an insurer place insurance coverage with that insurer?
When the producer does not receive a fee from the insured for his/her service
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
In Maine, a claim for payment of benefits covered under a policy of insurance is payable
Within 30 days of receipt of the proof of loss.
The two types of assignments are
absolute and collateral
All of the following are true about key-person insurance EXCEPT
the death benefit is taxable to the business
