Insurance Test
A life policy's spendthrift clause would have no effect if the beneficiary is paid the proceeds as a...
lump-sum payment
Periodic health claim payments MUST be made at least...
monthly
An insured is covered with a health insurance policy. If the insured would like to cancel the policy, he/she must...
notify the insurance company in writing
A health insure MUST provide a proof of loss form...
within 15 days of receipt of the notice of loss
The conversion option for group term insurance may be exercised by an employee...
within 31 days of terminated employment
When using the needs approach for life insurance planning, a lump sum may be created to provide for all of the following EXCEPT...
Employee benefits
A policy owner fell behind on the premium payments of a whole life policy and is now the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains as outstanding policy loan?
Face amount minus the loan balance and past-due premium
When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what kind of beneficiary designation is this?
Irrevocable beneficiary
John bought a deferred annuity on Mary. John amends the contract years later to name Tom as the recipient of the proceeds if Mary dies. Who is the annuitant for this contract?
Mary
Where is the difference between a standard risk and a substandard risk reflected?
Premium charges
Which of the following is NOT an objective of the National Association of Insurance Commissioners?
Regulate state insurance commissioners
XYZ Corp gives money to an employee to purchase a life insurance policy and allows the employee to select the beneficiary. What kind of plan is this?
Split-dollar
Under a deferred annuity, which contract feature initially charges a 5-10% fee that eventually reduces to $0 after a stated amount of time?
Surrender charge
Which of these is a true statement regarding survivor benefits under a qualified retirement plan?
Survivor benefits can only be waived with the written consent of a married employee's spouse
Which group is the Do Not Call Registry designed to protect against?
Telemarketers
Which statement regarding the joint and survivor life insurance settlement option is NOT true?
The amount of each installment is larger than the single life insurance option
First-time homebuyers are able to withdraw up to how much from their qualified IRA's without incurring the 10% early withdrawal penalty?
$10,000
A teacher recently retired at age 63 and has a tax sheltered annuity (TSA). Periodic deposits total $120,000 and the value of the contract is now worth $200,000. How much is taxed if the current value is surrendered today?
$200,000
Premature IRA distributions are subject to a penalty tax of...
10%
What minimum percentage of all eligible employees must participate in a group life insurance plan if the premiums are completely paid for by the employer?
100%
Which of the following statements accurately describes the "time limit on certain defenses"?
After a stated period of time, claims cannot be denied due to material misrepresentation on the application
Tim is retired and has recently separated from his wife. He receives benefits from a qualified retirement plan through his former employer. The plan's trustee has decided to split these benefit payments between Tim and his estranged wife. This decision is likely in violation of which IRS rule?
Alienation of benefits
Which of the following is NOT a reason for a business to buy key person life insurance?
An increased person liability if the key employee dies
Which type of policy can group term life insurance normally be converted to?
An individual permanent life insurance policy
Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)?
Annual investment gains are included in participant's gross income
A description of a qualified plan's insurance contract may be found in which ERISA reporting form?
Annual return/report (form 5500)
An applicant submits a life insurance application where an investigative consumer report is used in the underwriting process. Which of these statements is true?
Applicant has a right to receive a copy of the report
In what situation could an insurance policy's coverage be modified?
Applicant is a substandard risk
The Change of Occupation provision in Disability Income policy states that, in the event changes to a less hazardous occupation, which of the following may apply?
Benefits can be increased in the event of a covered claim
Which of these is NOT considered to be a cost connected with an individual's death?
Business expenses
An insurance agent who represents only one insurance company?
Captive
An accident and health insurance policy's premium requirements are set forth in which of the following provisions?
Consideration clause
Which report contains information regarding an individual's general reputation and credit standing?
Consumer report
Which of the following disability buy-sell agreements is best suited for business with a limited number of partners?
Cross-purchase agreement
What statement about group life insurance is INCORRECT?
Each participant requires evidence of insurability
An annuitant is paid $495 per month until the contract value is exhausted at some undetermined date in the future. Which type of annuity payout option is this?
Fixed amount
Which settlement option makes minimum guaranteed dollar payments over a stated number of years?
Fixed-period
What is considered a valid reason for small corporations to insure the lives of its major stockholders?
Fund a buy-sell agreement
The administrator for a corporate pension plan bought an accumulation annuity contract for its 2,000 employees. All 2,000 participating employees received certificates of participation. What kind of contract is this?
Group deferred annuity
What is an insurance contract that identifies individuals by relationship to a specific organization?
Group insurance
An agent that may represent several insurers?
Independent
Where will be life insurance policy's proceeds be directed to if all the beneficiaries die before the insured?
Insured's estate
Which health policy clause specifies the amount of benefits to be paid?
Insuring
Which statement regarding the certificate of insurance is accurate?
It indicated evidence of an employee's insurance coverage
Which life insurance settlement option pays lifetime benefits to two or more people?
Joint and survivor
Which of these pays an income to two or more annuitants until the death of the last annuitant?
Joint and survivor annuity
All of these are duties that a producer may be required when delivering an insurance policy EXCEPT...
Leave a conditional with client
Why do insurers require a minimum number of employees participate in a group insurance plan?
Minimize adverse selection
Which of these is NOT used as selection criteria in the underwriting process of a life insurance application?
National origin
Wyatt is shopping for life insurance and is mainly concerned with the policy's death benefit. Which index should he be looking at when making comparisons?
Net payment cost index
Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this?
Non cancelable
Which of the following health insurance plans charges a premium that cannot be increased?
Non-cancelable
Which of the following provisions allows an insured of the insurer to terminate the policy?
Optionally renewable provision
When most a producer disclosure about information practices to an applicant?
Prior to or at time of signing the applicant
When a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice?
Producer
Which of the following outlines the authority given to the producer on behalf of the insurer?
Producer contract
Which of these occurrences could improve an insurer's ability to reduce premiums?
Rate of earnings on investments increase
Which of the following is an unincorporated association whose members provide coverage for one another?
Reciprocal
Which of the following reduces the opportunity for overinsurance?
Reduction in coverage provision
An insurer that assumes risk from another insurance company?
Reinsurance
According to the IRS, a company may NOT do which of the following in regards to funds in a qualified retirement plan?
Repossess the funds for business purposes
What kind of arrangement gives the policyowner the right to change the beneficiary?
Revocable designation
What does a fixed life annuity offer protection against?
Savings depletion due to longevity
Which of these factors does NOT influence an individual's need for life insurance?
Self-maintenance expenses
The Optionally Renewable provision allows what party to cancel the contract?
The insurer
Who may terminate under a cancelable health insurance policy?
The insurer or the insured
What determines how much an annuitant is paid for variable annuity?
The market value variations of the securities backing it
Which of the following statements about the installments for a fixed period settlement option in life insurance policies is NOT true?
The periodic payment amount is determined by the beneficiary's age
How is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period?
The unpaid premium may be subtracted from the reimbursement
Which reinsurance contract between two insurers involves an automatic sharing of the risks assumed?
Treaty reinsurance
Which of the following is NOT considered to be an expense for surviving family members of a decreased wage earner?
Unemployment tax expenses
Under what circumstance does an accident and health insurer have the right to request an autopsy?
When not prohibited by state law
Disability income insurance normally excludes coverage for disabilities that arise from...
active military duty
Traditional Individual retirement annuity (IRA) distributions start by...
age 59 1/2
An agent's authority to bing an insurer to an insurance contract may be granted in the...
agent's contract and the insurance company's appointment
When there is a named beneficiary on a life insurance policy, the death benefits...
are paid directly to the beneficiary without interference from insured's creditors
Taking a sum of money and decreasing it in size is called...
capital liquidation
An employee welfare plan exempt for ERISA regulations would be..
church plans
An employee welfare plan exempt from ERISA regulations would be..
church plans
The policy provision that permits an employee to change from group life coverage to an individual life policy is called the...
conversion provision
At surrenders his life insurance for its cash value. The total of premiums paid into the policy minus total dividends received in cash or used to offset premiums is referred to as the...
cost basis
An employee insured under a group life insurance plan is normally...
covered with term life insurance
The main purpose of an annuity is to...
create a stream of income
A qualified profit-sharing plan is designed to...
distribute a portion of company earnings to its employees
When determining the accumulation value of a deferred annuity, the total is calculated by taking the premiums paid plus interest earned minus..
expenses and withdrawals
With life insurance, the needs approach is used primarily in determining...
how much life insurance a client should apply for
XYZ Corp has implemented a qualified retirement plan. This plan may NOT discriminate..
in favor of highly compensated employees
A business may purchase an annuity for all of the following reasons EXCEPT...
informally funding a non-qualified deferred compensation plans
After an insurance applicant has been originated, the producer normally...
is the major personal contact to the insured
Employers often purchase life insurance on a key employee in order to...
pay for finding and training a replacement if the employee dies prematurely
A life insurance policy's contingent beneficiary is the...
person who receives the death benefits if the primary beneficiary dies before the insured
The standard provisions of an accident and health insurance policy require that the...
policy, endorsements, and attached papers constitute the "entire contract"
The Guaranteed Renewable provision allows...
premiums which can only be increased per rate class
A retirement plan that sets aside part of the company's net income for distribution to qualified employees is called a...
profit-sharing plan
A Keogh plan is a(n)...
qualified retirement plan for the self employed
A life insurance producer's underwriting duties may include...
seeking additional information requested by the insurance company
Dividends from a stock company are normally sent to...
shareholders
If an employer pays for accident death and dismemberment insurance for its employee, the amount paid by the employer is generally...
tax deductible for the business
The interest credited to the cash values of personally-owned non-qualified annuities is considered...
tax-deferred
The interest paid during an annuity's payout period is considered....
taxable as ordinary income
The insured's consideration given for a health insurance policy is..
the first premium payments and the application
Which statement regarding a fixed period settlement option is correct?
the installment payment amount is determined by the total number of installments
James is covered with health insurance by two different insurers. The "insurance with other insurers" provision in an individual health insurance policy allows an insurer to pay benefits to the insured on a pro-rata basis when...
the insurer was not notifies prior to the claim that the insured has other health coverage
The reason for backdating a policy is...
to obtain a premium rate based on an earlier age
In an individual retirement account (IRA), rollover contributions are...
unlimited by dollar amount
