Life, Accident & Health pre-licensing
A teacher may defer a portion of his earned income into a(n)
403(b) TSA.
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?
Automatic premium loan
All of the following apply to defined benefit plans EXCEPT
Contributions are tied to the company profits.
An insured notices that the face value of her life insurance policy has been raised 7% as a result of the economic inflation rate increase. What is the name of the rider that may have caused this change?
Cost of living rider
All of the following statements concerning dividends are true EXCEPT
Dividend amounts are guaranteed in the policy.
All of the following statements are true regarding tax qualified annuities EXCEPT
Employer contributions are not tax deductible.
Which of the following policies would NOT offer a policy loan option?
Term life
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
SEC registration.
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000
According to the Entire Contract provision, a policy must contain
A copy of the original application for insurance.
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
Which of the following types of insurance companies issues participating policies?
A mutual insurer
What is the primary purpose of a 401(k) plan?
Accumulating funds for retirement
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Accumulation period
Which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity?
Accumulation period
The death protection component of Universal Life Insurance is always
Annually Renewable Term.
Which of the following indicates the person upon whose life the annuity income amount is determined?
Annuitant
Your client plans to retire at age 50. He would like to purchase an annuity that would provide income from the time he retires to the age when social security and other pension funds become available. What settlement option should he consider?
Annuity certain
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of authority does this describe?
Apparent
What is the primary source of information used for insurance underwriting?
Application for insurance
Employer contributions made to a qualified plan
Are subject to vesting requirements
Which of the following statements concerning buy-sell agreements is true?
Buy-sell agreements are normally funded with a life insurance policy.
What limits the amount that a policyowner may borrow from a whole life insurance policy?
Cash value
A tax-sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only
Because an insurance policy is a legal contract, it must conform to the laws governing contracts which require all of the following elements EXCEPT
Conditions
Which of the following features makes whole life insurance permanent protection?
Coverage until death or age 100
Which of the following is true about credit life insurance?
Creditor is the policyowner.
Term policies are available as Level, Increasing, and Decreasing. Which policy component fluctuates depending on the policy type?
Death benefit
The authority granted to an agent through the agent's contract is referred to as
Express authority.
An agent selling variable annuities must be registered with
FINRA.
In insurance transactions, fiduciary responsibility means
Handling insurer's funds in a trust capacity.
Events or conditions that increase the chances of an insured loss occurring are referred to as
Hazards.
Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?
Human life value approach.
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die.
Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?
Indemnity
In a traditional IRA plan, who would be allowed catch-up contributions in a traditional IRA?
Individuals age 50 or older
Who makes up the Medical Information Bureau?
Insurers
An underwriter may obtain information on an applicant's character, financial status, and habits by ordering a(n)
Investigative consumer report.
If a retirement plan or annuity is qualified, this means
It satisfies IRS requirements for favorable tax treatment
Which of the following concepts is the foundation of the statistical prediction of loss upon which rates for insurance are calculated?
Law of large numbers
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
What does an annuity protect the contract owner against?
Living longer than expected
Which of the following premium modes would result in the highest annual cost for a life insurance policy?
Monthly
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?
Monthly premium waiver and monthly income
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the dividends to the policy to increase the death benefit. The dividend option that the insured has chosen is called
Paid-up additions.
An Equity Indexed Annuity will grow based upon
Performance of a recognized index
Which of the following describes the specific information about a policy?
Policy summary
All of the following are examples of risk retention EXCEPT
Premiums
Which of the following is NOT consideration on the part of an insured?
Promise to submit timely claims
Which services are associated with Standard & Poor's and AM Best?
Rating the financial strength of insurance companies
Statements made by an applicant for a life insurance policy which are true to the best of the applicant's knowledge are referred to as
Representations.
If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may
Require evidence of insurability.
What is the primary purpose of a 401(k) plan?
Retirement funds
Which type of retirement account allows contributions to continue beyond age 70½ and does not force distributions to start at age 70½?
Roth IRA
Events in which a person has both the chance of winning or losing are classified as
Speculative risk.
If an applicant's health is poorer than that of an average applicant, the policy may be issued
Substandard.
In a deferred annuity, the difference between the accumulation value and the surrender value is the
Surrender charge.
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner
In life insurance, which of the following is NOT required to have an insurable interest in the insured?
The beneficiary
Who does the spendthrift clause in a life insurance policy protect?
The beneficiary
Which of the following is an example of liquidity in a life insurance contract?
The cash value available to the policyowner
When a fixed annuity owner pays his/her insurance company a monthly annuity premium, where is this money placed?
The insurance company's general account
The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to
The insured's estate.
Which of the following is TRUE regarding premium in a 10-year level premium policy?
The premium will remain level for 10 years.
All of the following would be eligible to establish a Keogh retirement plan EXCEPT
The president and employee of one's family's corporation.
For what reason may a life insurance producer backdate a life insurance policy?
To avoid an increase in premium rate for the insured
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?
Unilateral
Keogh plans are provided specifically for
self-employed
Which of the following is NOT true regarding a nonqualified retirement plan?
It needs IRS approval.
Which of the following would be likely to establish a SEP?
Small employers
Which of the following best describes annually renewable term insurance?
It is a level term insurance.
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
Authorized.
During replacement of life insurance, a replacing insurer must do which of the following?
Obtain a list of all life insurance policies that will be replaced
Which of the following is NOT a characteristic of an insurable risk?
The loss must be catastrophic.
Which of the following terms are associated with the way an annuity is funded?
Single premium and periodic payments
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
If a retirement plan or annuity is "qualified," this means
It is approved by the IRS.
The Guaranteed 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.
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
Signed waiver of premium.
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees.
In life insurance, an insurable interest between the policyowner and the insured must exist
At the time of application.
Which of the following is NOT true about a group annuity?
It can be owned by individual employees
What is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection.
When comparing a Joint Life Policy to two individual life policies of the same amount on the same insureds, which condition is true?
Joint Life has a lower premium than the total of the two individual policies.
A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?
Joint life
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
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer will pay the full death benefit from the group policy to the beneficiary.
What is the purpose of key-person insurance?
To cover decreased business revenues as a result of the death of a key employee
What is the purpose of a fixed-period settlement option?
To provide a guaranteed income for a certain amount of time
