Guarantee Exam 6

Which of the following best describes the aleatory nature of insurance contract?

Exchange of unequal values

Factual statements about the insured or the risk in an insurance policy are considered

Express warranty

When an employee terminates coverage under a group insurance policy, coverage continues in force

For 31 days

A deceptive act or Practice committed by a person with the intent to secure an unfair advantage or unlawful gain is known as

Fraud

Which of the following is NOT true regarding the accumulation period of an annuity?

It would not occur in a deferred annuity

Which life insurance settlement option guarantees payments for the lifetime of the recepient, But also specifies a guaranteed period, During which, if the original recipient dies, The payments will continue To a designated beneficiary?

Life income with period certain

Attempting to determine how much insurance an individual would require based upon their financial objectives is known as

Needs approach

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 benefits

Which of the following best describes an agent's fiduciary capacity?

Promptly forwarding premiums to the insurer

What is the purpose of the California laws regulating production agencies?

To provide protection to the clients by requiring producers to maintain professional standards of conduct

To which of the following products does the Replacement Regulation apply?

Whole life insurance

If a policy includes a free look period of at least 10 days, the Buyer's Guide may be delivered to the applicant

With the policy

Anyone convicted of committing an insurance fraud nay be fined up to the greater amount of double the value of the fraud or

$150,000

An insurer has been found guilty of a Code violation regarding replacement. The insurer then repeats the violation. What will be the minimum penalty?

$30,000

An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds

$50,000

The department of insurance contacts an agent about a claim that was settled 2 months ago. Within what time frame must the agent issue a complete response?

21 days

An Internal Revenue Code provision T that specifically provides for an individual retirement plan for public school teachers is a

403(b) Plan(TSA)

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT

The policy is owned by the company

Who would be eligible to contribute to an IRA?

A 50 year old school teacher

In general terms, IRA contributions

Are tax deductible

All of the following are true regarding a qualified annuity EXCEPT

At distribution, all amounts received by the employee are tax free

What does "liquidity" refer to in a life insurance policy?

Cash values can be borrowed at any time

Contracts that are prepared by one party and submitted to the other party in a take-It-or-leave-it basis are classified as

Contracts of adhesion

Which of the following is TRUE about credit life insurance?

Creditor is the policyowner

An insured pays $1200 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?

Reduction of premium

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 of the beneficiaries were alive

In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT

The type of investment

If an annuitant dies during the accumulation period, What benefit, if any, will be included in the annuitant's estate?

Accumulated cash value

Naming a trust as the beneficiary of a life insurance policy can accomplish all of the following for the policyowner EXCEPT

Allow the trustee to transfer the assets of the trust to their personal account

Which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy