hard questions 2-15

the policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this

reduction of premium

which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance

replacement rule

when insured under a life insurance policy died, the designated beneficiary recieved the face amount of the policy, as well as a refund of all of the premiums paid. which rider is attached to the policy

return of premium

A domestic insurer issuing variable contracts must establish one or more

separate accounts

when a life insurance policy stipulates that the beneficiary will recieve payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments

spendthrift

which of the following policies would be classified as a traditional level premium contract

straight life

which is true of a qualified plan

tax benefit for both employer and employee

the agent is in the military, which of the following is true

the agent cannot sell a policy to another active military person who is of lower rank

How will a life insurance beneficiary designation naming a spouse be changed by divorce?

the beneficiary designation will be voided

which of the following dates must be contained in the policy summary

the date the summary was prepared

a father purchases an insurance license on his teenage daughter and adds the payor benefit rider. in which of the following scenarios will the rider waive the payment of premium

the father is disabled for 6 motnhs

a 40 yo man buys a whole life policy and names his wide as his only beneficiary. his wife dies 10 years later. he never remarries and dies at 61, leaving 2 grown up children. assuming he never changed beneficiary, the policy proceeds will go

the insured's estate

all of the following are true regarding a decreasing term policy EXCEPT

the payable premium amount steadily declines throughout the duration of the contract

A person insured under a group life insurance policy can make an assignment of all or any part of the incidents of ownership conferred on the insured by the policy or by law, to any of the following EXCEPT

the policy holder

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

which of the following is TRUE regarding the premium in term policies

the premium is level for the term of the policy

which of the following is not true of life settlements

the seller must be terminally ill

a mandatory health policy provision that makes the policy incontestable after its been in force for a certain period of time

time limit of certain defenses

which of the following life insurance policies allows a policy owner to take out a loan from the policys cash value

variable universal life [policies

which of the following key distinction between variable whole life and variable universal life products?

variable whole life has a guaranteed death benefit

all of the following are available under social security except

welfare benefits

Joint and Survivor Annuity

will pay until the last annitant has died, however the surviving annuitant may recieve reduced payments

which statement about MEC is false

withdrawls are not taxable

which is not an example of a business use of life insurance

workers comp

under which of theannuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be

installments for a fixed period

what are the two components of a universal policy

insurance and cash ammount

which of the following is true regarding the accumulation period of an annuity

it is a period during which the payments into the annuity grow tax deferred

which of the following is true concerning the accidental death rider

it will pay double or triple the face amount

Why is an equity indexed annuity considered to be a fixed annuity?

it's not a guaranteed minimum interest rate

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

level term

which is the other term fir the cash payment settlement option

lump sum

to insure against a large number of unpredictable losses, self insurance plans adopt a

minimum premium plan

the provision that allows the insurer to adjust the benefit payable is called

misstatement of age or sec

which is not true about policy loans

money borrowed from the cash value is taxable

Regarding the free-look provision, the insurance company

must allow the policyowner to return the policy for a full refund

simple plans require

no more than 100 employees, no other qualified plan can be used, employees must receive a minimum of $5k in annual compensation

which term describes the benefits of a life insurance policy that the policyowner does not automatically relinquish even if the policy lapses?

nonforfeiture values

all of the following would be considered an insurance transaction except

obtaining an insurance license

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

other insured rider

which of the following is not true about a joint and survivir annuity benefit option

payments stop after the first death among annuitants

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

the office of insurance regulation is responsible fir allk of the following insurer activities

premium financing, viatical settlements, and policy forms

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

equal to the original policy for as long as the cash values will purchase

an agents client needs additional insurance which the agents own insurer cannot provide. the agent has to solicit covergae from another authorized insurer. the coverage is known as

excess

failure of a licensee to maintain an appt with an insurance company within 48 months after the date the license became effective will result in

expiration of the license

an insurance policy for cannot be issued, delivered, or used in this state unless it has been

filed and approved by the OIR

under which installment option does the annuitant select the amount of each payment , and the insurer determines how long they will pay benefits

fixed amount

Under a 20-pay whole life policy, in order for the policy to oay the death benefit to a beneficiary, the premiums must be paid

for 20 years or until death, whichever occurs first

The inclusion of the Life and Health Guaranty Association in an advertisement by an insurer is

forbidden

Return of Premium Rider

funded by using increasing term insurance

What required provision protects against unintentional policy lapse?

grace period

eligibility requirement for social security disability income

have attained fully insured status

variable universal life policies

have cash value, so they allow policy loans.

a return of premium term life policy is written as what type of term coverage?

increasing

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

$50,000

Health insurance policies allow the insured to return the policy if not satisfied within ________ days

10

if a health provider reinstates the policy, the company is protected against adverse selection by covering only if sickness occurs after how many days after reinstatement?

10 days

how long does the health provider have to supply the insured with a claim form after receiving notice of claim?

15 days

the health policy notice of claim provision provides that the policy owner's obligation to the insurer to provide notification of loss usually within _______ days

20

to qualify for conversion from a group life policy that has been terminated to an individuall policy with the same coverage, a person must have been unsured under the gorup plan for how mnay years

5

When a group policy terminates, every individual insured under the policy will be entitled to have an individual policy if the insured has been insured by the group policy for at least how many years prior to policy termination?

5 years

minimum number of credits required for partially insured status for social security disbility benefits

6 credits

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

In life policies issued in this state, insurers are permitted to charge interest during the policy grace period for the number of days elapsing before the premium is paid. What is the maximum annual interest rate?

8%

which of the following is not a responsibility is not a responsibility of the office of insurance regulation

enacting new insurance laws

In insurance, an offer is usually made when

An applicant submits an application to the insurer

Which of the following is true about the Health Maintenance Organization?

Financed on a pre-payment basis, rarely assesses deductibles, may be self-contained or self-funded

all of the following are dividend options except

Fixed period installments

in life insurance policies, cash value increases

Grow Tax Deferred

all of the following situations could cause a plan to lose grandfathered status EXCEPT:

Increased in fixed amount co payments

An insured had a life insurance policy that he purchased three years ago when he was 40 years old . He is killed in an automobile accident and it is discovered that he is actually 45 years old , and not 43, as stated on the application. What will the insurance company do?

Pay a reduced death benefit

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will not be lost

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

which of the following insurance products will be subject to the regulation on life insurance solicitation

a term life policy

An insured misstates her age at the time the life insurance application is taken. This misstatement may result in

adjustment in the amount of the death benefit

which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

aleatory

who can make a fully deductible contribution to a traditional IRA?

an individual not covered by an employer-sponsored plan who has earned income

the death component of universal life insurance is alwyas

annually renewable term

A universal life insurance policy is best described as a(n)

annually renewable term policy with a cash value account

when an insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting information?

application

which of the following is a basic source of information used by the company in the risk selection process?

application

all of the following are requirements of eligibility for social security disability benefits except

being age 65

In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse may receive retirement benefits?

blackout period

how are state insurance guaranty associations funded

by their members- authorized insurers

policy loans

can be repaid at death, can charge interest , can be repaid when surrendered

The type of policy that can be changed from one that does not accumulate cash value to the one that does is a

convertible term policy

which term is used to name the nontaxed return of unused premiums

dividend