FML 2

Who makes up the Medical Information Bureau?

Insurers

Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives?

Medical information

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? - the customer has no knowledge of this action - the customer's associates, friends, and neighbors provide the report's data - they provide additional information from an outside source about a particular risk - they provide information about a customer's character and reputation

The customer's associates, friends, and neighbors provide the report's data

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

To keep the policy in force

What type of premium do both Universal Life and Variable Universal Life policies have?

flexible

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?

Universal Life

What is the purpose of a conditional receipt?

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

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

Paid-up option

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

If a producer allows his license to lapse, what is the maximum time period during which the producer can reinstate the license without having to retake the examination?

12 months

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

Variable whole life insurance is based on what type of premium?

Level fixed

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

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

All of the following entities regulate variable life policies EXCEPT - the insurance department - the guaranty association - federal government - the sec

The guaranty association

Who is responsible for paying producer appointment fees?

the appointing insurer

How many days does an insurer have to respond to a written communication from a claimant?

30 days

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?

Immediate annuity

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? - guaranteed insurability - payor benefit - long-term care - accidental death

Long-term care

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

Payor benefit

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.

The commissioner has just issued an order regarding a recent hearing. How many days does the producer who was subject to the hearing have to appeal to the Commissioner's action?

30 days

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

An individual is purchasing a permanent life insurance policy with a face value of $20,000. 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? - nonforfeiture options - guaranteed insurability option - dividend options - guaranteed renewable option

Guaranteed insurability option

Which of the following riders would NOT cause the death benefit to increase? - accidental death rider - payor benefit rider - guaranteed insurability rider - cost of living rider

Payor benefit rider

The policyowner of a Universal Life pol it may skip paying the premium and the policy will not lapse as long as ...

The policy contains sufficient cash value to cover the cost of insurance

How must a producer respond to an application wishing to replace existing life insurance?

The producer must provide the applicant with a Notice Regarding Replacement

Which of the following is TRUE about nonforfeiture values? - policyowners do not have the authority to decide how to exercise nonforfeiture values - they are required by state law to be included in the policy - they are optional provisions - a table showing nonforfeiture values for the next 10 years must be included in the policy

They are required by state law to be included in the policy

Which of the following statements is TRUE concerning the Accidental Death Rider? - this rider is only available to insureds over the age of 65 - it's only available in group insurance - it will pay double or triple the face amount - it is also known as the triple indemnity rider

It will pay double or triple the face amount

Another name for a substandard risk classification is...

Rated

The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy at the date of her husband's death. Who will select the settlement option in this case?

The beneficiary

The initial amount of credit life insurance may NOT exceed

The amount to be repaid under the contract

Which of the following is NOT true regarding equity indexed annuities? - they earn lower interest rates than fixed annuities - the insurance company keeps a percentage of the returns - they have guaranteed minimum interest rates - they are less risky than variable annuities

They earn lower interest rates than fixed annuities

All of the following violations may result in an agent's imprisonment EXCEPT - engaging in the business if insurance after being convicted of breach of trust - failing to report to the department a criminal prosecution taken against the agent in another jurisdiction - embezzling funds from the insurer - knowingly obtaining information about a consumer under false pretenses

failing to report to the department a criminal prosecution taken against the agent in another jurisdiction