Guarantee Exam

Which of the following becomes part of the contract, is guranteed to be true, and if untrue, may be grounds for rescinding the policy?

Warranty

In a replacement situation, all of the following are prohibited practices EXCEPT...

Borrowing 50% of a policy's cash value to fund a new life insurance contract

An annuity has accumulated the cash value of $70,000, of which $30,000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive...

$70,000

How long is the grace period for an individual life insurance policy in california?

60 Days

Which of the following statements about a resident life-only agent licensing is INCORRECT?

A licensee has 30 days to update a change in address

Which of the following documents could an insured provide to an insurer in an attempt to communicate the severity of a loss?

Proof of claim

All of the following are true of credit life EXCEPT...

the insured names the beneficiary

Policy dividends issued by mutual companies can be described as

Refunds

Among people in the same class and life expectancy, which of the following factors can be used to influence premium rates?

Occupation

All of the following are true about key-person insurance EXCEPT...

The death benefit is taxable to the business

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guranteed an income for life. Which settlement option should this policyowner select?

Joint and Survivor

J is receving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J chooses?

Fixed amount

Policies written in a third-party ownership basis are usually written to cover which of the following?

Policyowner's minor children or business associates

All of the following are required for HIV testing EXCEPT...

If HIV is present, the person may be rated, but they cannot be declined

The policyowner has an option to pledge the life insurance policy as a collateral for a bank loan. This is called...

A collateral assignment

According to the life insurance replacement regulations, which of the following would be an example of policy replacement?

A policy is reissued with a refuction in cash value

When a whole life policy is surrendered for its notforfeiture value, what is the automatic option?

Extended Term

All of the following are true of annually renewable term insurance EXCEPT...

Proof of insurabilty must be provided at each renewal

Which of the following will be eligible for a tax-sheltered annuity?

Public School teachers

The Guranteed 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 of the following indicates the person upon whose life the annuity income amount is determined?

Annuitant

In a variable life insurance policy, all of the following assests are held in the insurance company's general account EXCEPT...

Cash surrender values

Which statement best describes agreement as it relates to insurance contracts?

One party accepts the exact terms of the other party's offer

The insured dies 6 months after the policy issue date. Upon death of the insured, it is determined that the insured made a material misstatement on the application. What is the most likely course of action for the insurer?

Recsind the policy

Underwriters use all of these methods to protect the insurer against adverse selection EXCEPT

Only accepting a small percentage of applicants

Which of the following is the best definition of "indemnification"?

The act of one person who agrees to restore an injured person to the condition he/she enjoyed prior to the loss

An insured decides to surrender his whole life insurance policy. The cash value at surrender is higher than the premiums paid into the policy, due to interest. What part of the surrender value would be income taxable?

The difference between the premiums paid and the cash value

An applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer no to the question pertaining to heart problems on their application. Their answer is considered to be a...

Representation

Considering the California Insurance Code's definition of an insurable event, which of the following statements is true?

The more predictible a loss, the more insurable it is

What is the most common name for a single policy that is designed to insure two or more lives with a standard premium, and that pays the death benefit upon the first death?

Joint life

Upon the surrender of a life insurance policy, any cash value accumulated in excess of the premium payments is...

Taxed as ordinary income

Ten years ago, an insured purchased a life insurance policy designed to pay his family $500 a month for 20 years. Last month, he was killed in an auto accident. The insurance company told his widow that she would receive $500 a month for the 10 remaining years on the policy. The insured had purchased what kind of a policy?

Family income policy

California's insurance code requires all insurers to have a department, the sole purpose of which is to investigate possible...

Fraudulent claims from insureds

An insured falls down a flight of stairs and sustains a neck injury that renders him severely disabled. The insured owns a Whole Life policy. Is it possible for the policy to include a Waiver of Const of Insurance rider, and if so, what insurance costs would be waived?

No; Its not possible for this waiver to be included in a whole life policy

The provision that sets forth the basic agreement between the insurer and the insured and states the insured's promise to pay the death benefit upon the insured's death is called...

Insuring clause

If an insurance company issues a policy even though some questions on the application were unanswered, when can the insurer get the answer to those questions?

Never; the insurer has waived its right to those answers by issuing the policy