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
