guarantee exam
which of the following would be considered a peril
fire
the purpose of the fair credit reporting act is to
protect consumers against the circulation of inaccurate or obsolete personal or financial information
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
Agents may be found guilty of defamation if they make false statements that are intended to
maliciously criticize another insurance company
which of the following is guaranteed under a variable whole life insurance policy
minimum death benefit
a business entity that wants to transact insurance business has one affiliated individual licensee. how many more does it need to transact business in this state
none
which of the following is not a component of an insurance policy premium
number of beneficiaries
all of the following are true regarding the federal fair credit reporting act except
reports may be sent to anyone who requests one
who is responsible for verifying that an insurer is authorized to sell insurance policies in this state
soliciting producer
if an individual willfully violates provisions of the fair credit reporting act what is the maximum civil penalty
$2,500
a jumping juvenile policy is unique in that the death benefit automatically
(b) Increases at a predetermined age
when group insurance is provided by an employer what is the minimum number of employees that must be covered on the date of issue
2
during policy replacement, the policyowner is entitled to a free look period of how many days
20 days
how many days notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans
30 days
a life insurance policy can backdate to affect a lower premium for up to a maximum of how many months
6
Policy loan requests, except for loan requests for payment of due premiums, may be deferred for a period of up to
6 months
what is the minimum rate at which the unpaid death benefit accrues interest
8%
An Agent is hand delivering an insurance policy to a policyowner. What must the agent obtain to complete the transaction?
A signed delivery receipt
what is the maximum loan amount a policyowner may withdrawal from a variable universal life insurance policy
An amount not exceeding the cash value
in whole life insurance, when is the policy cash value scheduled to equal the face amount
At the insured's age 100
which of the following documents used in the underwriting process contains specific medical details about an applicant
Attending Physician's Statement (APS)
the entire contract includes all of the following except
Buyer's Guide
all of the following information needs to be included on an application for life insurance except
Health insurance policies in force
which of the following is true regarding pure life annuity settlement option
It provides the highest monthly benefit
which of the following best describes pure life annuity
It provides the highest monthly benefits
an insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?
3 days
how long must insurers maintain a copy of each disclosure document used in insurance transactions
3 years
if a person whose license has been temporarily suspended demands a hearing, the commissioner must hold the hearing within how many days after receipt of the demand?
30
a life insurance policy qualifies as a modified endowment contract if the amount of premium paid exceeds the amount that would have provided paid up insurance in how many years
7 years
this state provides for a temporary license for all of the following except
A producer's retirement.
in a life insurance application all of the following signatures will be required except
Home office underwriter
which of the following is not true regarding a deferred annuity
Income payments begin within 1 year from the date of purchase
Hazards are conditions or situations that
Increase the likelihood of a loss occurring
if a producer wants to sell annuity contracts, how often must the producer complete the annuity suitability training?
one time training
if a life insurance company used HIV testing as part of its underwriting when must an applicant be notified of the procedure
prior to test
cash value guarantees in a whole life policy are called
nonforfeiture values
Guaranteeing future dividends is considered to be an unfair or deceptive act known as
Misrepresentation
the reduction of premium option uses the dividend to reduce
Next year's premium
dividends received on participating life insurance policies are
Not taxable because they are a return of unused premiums
which statement best describes agreement as it relates to insurance contracts
One party accepts the exact terms of the other party's offer
When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?
Paid-up additions
Which dividend option increases the death benefit?
Paid-up additions increase the death benefit of the original policy by whatever amount the dividend will buy.
An Equity Indexed Annuity will grow based upon
Performance of a recognized index
The frequency and the amount of the premium payment are known as what?
Premium Mode
what is the difference between a straight life policy and a 20-pay whole life policy
Premium payment period
before an insurer may transact business in a specific state, they must apply for a license or certificate of authority from the state department of insurance and meet
Solvency requirements
The family term rider incorporates
Spouse term and children's term
in contrasting stock insurers with mutual insurers, which statement is true?
Stock insurers are owned by the shareholders and issue nonparticipating policies
When term insurance is added to the main policy to enhance the policy or provide added benefit or coverage, it is called a
Term rider
what is the cost of coverage based on for group life insurance
The average age and the ratio of men to women
all of the following are true about key person insurance except
The death benefit is taxable to the business
Who is the annuity owner?
The person who purchases the annuity
two individuals of the same age, health status, and life expectancy apply for individual insurance coverage. when policies are issued by the same insurer, the premium rates are different based on the insureds race. what practice does this describe
Unfair discrimination
which of the following policies can be described as a flexible premium adjustable life policy
Universal Life
which of the following types of insurance is investment based has a level fixed premium and a nonguaranteed cash value
Variable Whole Life
Because of an injury, an insured has been unable to work for 7 months. He wasn't able to pay his life insurance policy premium, yet the policy remained in force. The policy includes
Waiver of premium rider
when an insured terminates membership in the insured group, the insured can convert to
Whole life without proof of insurability
all of the following are examples of a policy replacement except
a term policy is being converted to whole life
which of the following statements is INCORRECT concerning modified endowment contracts
an mec must always pass the 7 pay test
In the event an annuitant dies during the accumulation period, and there is a beneficiary named in the annuity, annuity benefits would be paid to the
beneficiary
insurance provides a means to
transfer loss
all of the following are true of annually renewable term insurance except
proof of insurability must be provided at each renewal
Insurers CANNOT transact insurance in this state without a
Certificate Authority
An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount?
Children's term rider
which of the following would be exempt from the policy replacement regulations for insurers
Credit life insurance
how are policy loans calculated?
the policy's cash value minus unpaid loans and accrued interest
when a producer is making recommendations for a purchase of an annuity, the producer must consider product suitability for the consumer. if the consumer decides to enter into a transaction not based on the producers recommendation which of the following is true under the suitability provision
the producer has no obligation to the consumer
which of the following types of insurance policies would perform the function of cash accumulation
whole life
which of the following is not an indicator of a competent party
business; profession
partners in a business want to make sure that if one of them were to pass away their surviving family will receive a fair value for their portion in the business. what life insurance arrangement would be most suited for transitioning the business
buy-sell agreement
while completing a life insurance application the applicant realizes that she should have answered an earlier question differently what should the agent do to make the necessary change
Cross out the incorrect information, write in the correct answer, and have the applicant initial the change
which of the following losses would likely be covered under the accidental death rider
Death caused by a head-on collision
an adjustable life policy can assume the form of
Either term insurance or permanent insurance
which of the following could reduce the amount of the death benefit
Failure to repay a policy loan
an applicant may challenge information discovered as a result of an investigative consumer report under which of the following acts
Fair Credit Reporting Act
in life insurance which of the following is not required to have an insurable interest in the insured
beneficiary
which of the following would be an example of an insurer participating in the unfair trade practice of discrimination
charging the insured higher premiums based on her race
when an insurer tries to discourage a policyholder from dropping his/her existing policy, this is called
conservation effort
During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of
defamation
which of the following is not a standard exclusion in life insurance policies
disability
If an agent follows the rules and terms of his agent contract, he is exercising his
express authority
an annuity owner receives the same guaranteed payment every month. what type of annuity is it
fixed
at what point would an automatic premium loan be generated
following the grace period
if a person issues an insurance contract from an unauthorized insurer, that person may be
held personally liable for any claim
during the accumulation phase of a fixed annuity, the annuitants interest rate is based on a minimum rate as specified in the contract or the current interest rate whichever is
higher
If a loan request is for payment of due premiums on the policy, how soon must the insurer issue a loan?
immediately
insurance producers always represent the
insurance company
what is the most common name for a single policy that is designed to insure two or more lives what a standard premium and that pays the death benefit upon the first death
joint life
when comparing a joint life policy to two individual life policies of the same amount on the same insureds which condition is true
joint life has a lower premium than the total of the two individual policies
when an agent delivered an insurance policy to the insured he collected the initial premium as well as a document verifying that the insured has not had any injuries or illnesses since the application date. what is this document called
statement of good health
An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as
twisting
