Life Agent
Under which of the following annuity 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
All of the following are mandatory life insurance policy provisions EXCEPT
Policy backdating
All of the following are mandatory life insurance policy provisions EXCEPT
Policy dackdating
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
SEC registration
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
Which of the following is NOT a licensing requirement for a corporation in the state of Texas?
The business must be able to pay 50,000 in the event that is proven to be negligent
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?
The policy will be interpreted as if the insurer waived its right to have an answer on the application.
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
Annually renewable term policies provide a level death benefit for a premium that
Increases annually
During partial withdrawal from a universal life policy, which portion will be taxed?
Interest
All of the following are Nonforfeiture options EXCEPT
Interest only
#47. An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an
Interest-sensitive Whole Life.
#18. A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other insured rider
Who is the owner and who is the beneficiary on a key person life insurance policy?
The employer is the owner and beneficiary
#75. An agent receives an Emergency Cease and Desist Order for chronically misrepresenting his insurance policies. The agent knows that he did not commit the violations stated in the Emergency Cease and Desist Order. He wants to contest the charges in a court hearing. Which of the following is true?
The hearing must be held within 30 days of receiving a request, unless both parties agree to a later date.
All of the following are requirements for life insurance illustrations EXCEPT
They must be part of the contract.
What is the purpose of key person insurance?
To lessen the risk of financial loss because of the death of a key employee
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?
a) $10.000, no tax consequence
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
What percentage of a company's employees must take part in a noncontributory group life plan?
100%
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
2,500
How soon from the termination of debt under a credit life insurance policy must a creditor provide notice to the insurer?
60 days
The Commissioner has full power and authority to do all of the following EXCEPT
desist orders. d)
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The customer's associates, friends, and neighbors provide the report's data.
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
The Commissioner of Insurance issues a Cease and Desist Order to an agent. If the agent wishes to contest the charges in court, how many days after the order was issued does the agent have to make the request?
60 days
An agent's license will terminate within how many days from the due date of obligatory fees and continuing education requirements?
90
According to the Entire Contract provision, a policy must contain
A copy of the original application for insurance.
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
Under which of the following circumstances would an insurer pay accelerated benefits?
An insured is diagnosed with cancer and needs help paying for her medical treatment.
#86. In Texas, the Commissioner of Insurance is
Appointed by the governor
The accelerated benefits provision will provide for an early payment of the death benefit when the insured
Becomes terminally I'll
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?
Consumer report
A key person insurance policy can pay for which of the following?
Costs of training a replacement
An insurance professional advises a client regarding the benefits of her
Counselor
Which of the following is NOT typically excluded from life policies?
Death due to plane crash for a fare-paying passenger
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract.
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
Those who have been insured under the plan for at least 5 years
Which of the following is the best reason to purchase life insurance rather than an annuity?
To create an estate
In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?
5
The term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy.
The current interest rate of equity indexed annuity is often based on
An index like Standard and Poor's 500
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
Consideration
The death benefit in a variable universal life policy
Depends on the performance of a separate account.
which the premiums have been invested by the insurer. #55. A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
Pay the policy proceeds only if it would have issued the policy.
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid up
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?
Size of each installment
Which of the following is TRUE regarding variable annuities?
The annuitant assumes the risks on investment.
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
The policy is owned by the company.
#44. All of the following are true about variable products EXCEPT
The premiums are invested in the insurer's general account.
What is a foreign insurer?
b) An insurer with a home office in another state
An insured in a group policy has misstated his age on the insurance application. As a result, the insurer will most likely
Adjust the premium
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated
Consideration
Which of the following riders would NOT cause the Death Benefit to increase?
Payor Benefit Rider
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than
Single premium whole life.
The main difference between immediate and deferred annuities is
When the income payments begin
What percentage of continuing education hours must be in a classroom setting?
50%
Children's riders attached to whole life policies are usually issued as what type of insurance?
Term
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
Which of the following is NOT an example of a valid insurable interest?
Debtor in the life of the creditor
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing terms
Which of the following occupations would NOT directly help to qualify someone for the office of Commissioner of Insurance?
Insurance agent
Which of the following is correct concerning the taxation of premiums in a key person life insurance policy
Premiums are not tax deductible as a business expense
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
Proof of insurability is not required
An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?
Reduction of payment
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?
Reinstatement provision
Which of the following policies would be classified as a traditional level premium contract?
Straight life
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection
An applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day, which of the following is TRUE?
The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy.
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
The date of medical exam
An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?
The policy will not be affected.
How are contributions to a tax-sheltered annuity treated with regards to taxation?
They are not included as income for the employee, but are taxable upon distribution.
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than
With the policy
All of the following are dividend options EXCEPT
Fixed-period installments. a)
When possible, what should insurers strive to eliminate from illustrations?
Footnotes and caveats
An agent selling variable annuities must be registered with
FIRNA
According to the state nonforfeiture law for life insurance policies, insurers must offer at least one of the following nonforfeiture options EXCEPT
Reduction of premium
When transacting business in this state an insurer formed under the laws of another country is known as a/an
Alien insurer
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
To legally transact insurance in this state, an insurer must obtain which of the following?
Certificate of Authority
Which of the following must an insurer obtain in order to transact insurance within a given state?
Certificate of authority
All of the following are duties and responsibilities of producers at the time of application EXCEPT
Change any incorrect statement on the application by personally initialing next to the corrected statement.
Which entity has the authority to grant a temporary insurance agent's license?
Commissioners of insurance
Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?
Fraternal benefit society
What required provision protects against unintentional lapse of the policy?
Grace period
An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed insurability option
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a
Guaranteed insurability rider
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an
Interest-sensitive Whole Life.
What is the purpose of a conditional receipt?
It is intended to provide coverage on a date prior to the policy issue.
Which of the following statements is TRUE about a policy assignment?
It transfers right of ownership from the owner to another person
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
The premium of a survivorship life policy compared with that of a joint life policy would be
Lower
The premium of a survivorship life policy with that compared with that of a joint life policy would be
Lower
What is the major difference between a stock company and a mutual company?
Ownership
All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT
Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called
Waiver of premium
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called
Single premium whole life
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association.
60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?
The amount of the distribution is reduced by the amount of a 20% withholding tax.
Upon the submission of a death claim under a life insurance policy, when must the insurer pay the policy benefit?
Within 2 months
