life insurance

Generally, what is the tax consequence of a withdrawal prior to age 59 ½ from an IRA?

10% penalty

Generally, what is the tax consequence of a withdrawal prior to age 59 ½ from IRA

10% penalty.

A Whole Life policy is replaced with an annuity without a tax penalty. This is referred to

1035 Exchange

If a producer has completed 21 hours of continuing education, but not ethics credits, how many ethics credits must be completed to keep the license active.

3

An insurer, in general business practice, fails to promptly provide a reasonable explanation for the..

A fraudulent insurance act

What must exist in order for an insurance policy to be a binding contract?

A legal purpose

If a premium is NOT submitted with a life insurance application, the producer must have the applicant sign which of the following when delivering a policy?

A statement of good health

An insurance producer shall NOT act as an agent of an insurer until that producer has...

An appointed agent of that insurer

Which of the following statements is True regarding a 1035 exchange?

An exchange for another policy or annuity generally avoids any taxes

Once a life policy has been in effect for 2 years, what clause protects a policyowner from a misstatement

An incontestable clause

When an individual becomes a customer, the licenses shall provide a notice to the customers de.. notice need to be provided?

Annually

In reference to life insurance in contract law, a person most likely will have an insurable interest in insuring a person's life if?

Any type of business relationship exists between the insured party and the beneficiary.

Nonforfeiture values are associated with which of the following?

Cash Values

The dividend option where the insurer issues the policyowner a check for the dividend amount is called a

Cash dividend option

Under the One-Year Term dividend option, the dividend is used to buy term coverage for a year, w...

Current cash value of the policy

The basic reason for purchasing life insurance is to provide

Death benefits

A producer who knowingly solicits new insurance risks by an insolvent insurer is guilty of?

Defamation

All of the following would trigger an accelerated death benefit EXCEPT

Diagnosed with a terminal illness

Which rider pays a monthly amount to the policyowner in the event of total and permanent disabilities?

Disability income rider

Who is the beneficiary of a key person insurance policy?

Employee

This type of policy where 80% to 90% of the premium is invested in traditional fixed income securities stock index is

Equity index whole life

Annuity products linked to a market-related index are called

Equity-indexed annuity

A producer who knowingly submits a false statement in support a claim may be found guilty of?

Fraud

A producer who knowingly submits a false statement in support of a claim may be found guilty of

Fraud

An individual who knowingly submits a false statement in support of claim may be found guilty of

Fraud

A fixed annuity has a rate

Guarantee

Which of the following retirement plans will allow for a nonworking spouse to set up a separate account and make contributions based on the working spouse's income?

IRA

Bettie has a $200,000 whole life policy with a $50,000 cash value. She wishes to borrow $30,000 for the purchase of a new...

If the loan is not repaid, the net death benefit will be reduced

Once a life policy has been in effect for 2 year, what clause protects a policyowner from misrepresentation caused by an unintentional mistake.

Incontestable Clause

Which is the simplest type of life insurance plan that provides protection for a specified time period?

Level term life insurance

All of the following are considered a risk except the insured's

Local competition

A life insurance rider which reimburses incurred in a convalescent or nursing home facility is?

Long term care rider

Term life insurance is more appropriate than whole life insurance when the

Maximum protection is needed at lowest cost

To receive proceeds from a death benefits, a minor

Must have an appointed guardian

An insurer owned by its policyholders and pays dividends is considered a

Mutual Company

Which of the following elements of Insurable risks allow the Insurance Company to exclude nuc..?

Not catastrophic

What best describes pure risk?

Only chance of loss

Generally, if an application is NOT prepaid, the effective date of coverage begins on the date the

Producer delivers the policy and collects a premium

Which of the following is not true about converting a group policy to an individual policy?

Proof of insurability will be required.

Which of the following is true regarding the annuitant?

The annuitant is the person who is paying the premiums

Who is allowed to make changes to a life insurance contract?

The commissioner of the insurance

At the time of an insured's death, a per capita distribution of a policy proceeds are paid to

The named living primary beneficiaries

Roger's life insurance representative advised he buy a whole life policy for all of the following except

The policy premiums will diminish overtime

If a policyowner surrenders a policy for the cash value, when is a tax liability incurred?

The surrender value exceeds all premiums paid

What effect will benefit payments from a long-term care rider on a life insurance policy have on the face amount of the death benefit?

They will be reduced

For what purpose is a life insurance application backdated?

To Reduce The Premium

The Medical Information Bureau (MIB) is an organization which

is sponsored by physicians that maintain a database available to insurance companies

An insurance producer shall not act as an agent of an insurer until that producer has become?

An appointed agent of that insurer.

All of the following are subject to false advertising regulations except

Circulars

Which of the following is NOT an example of a producer's duties?

Collecting premiums

Which type of annuity guarantees a level benefit payment?

Fixed

A beneficiary has chosen to receive income from a life insurance policy for the next 10 years. After 10 years, the entire proceeds will have been paid out. The beneficiary has selected which type of

Fixed Period

An unlicensed individual, who is employed by an agency, may perform all the following activities EXCEPT:

Give advice regarding a specified product offered by an insurer

The interest accumulated on life insurance proceeds are paid out to the

Insurance company

Which of the following statements BEST describes a single premium cash value policy?

It requires only one payment to make the policy paid up

What must exist in order for an insurance policy to be binding contract?

Legal Purpose

An employer may purchase life insurance on a key employee because of

Reinsurance

The settlement option that pays the beneficiary the deal benefit proceeds in single installment in--

A lump sum payment

Which of the following individuals is required to be licensed as an insurance counselor in the state of Michigan?

A person providing insurance advice to a person or business for a fee

Upon the death of an insured individual, what does life insurance guarantee to deliver to be beneficiary?

A specified sum of money

If the beneficiary has the insurer retain to the benefits to gain interest, how is the interest calculated --?

Annual paid in premiums

What is a producer's apparent authority?

Authority required to execute express authority

Which term describes naming a contingent beneficiary as "all my children"?

Class designation

Which of the following elements would be absent for an applicant under the influence of drugs and alcohol?

Competent parties

What is protected by the Graham Leach Billy act chapter 5 of the Michigan insurance code?

Customer's financial information

Which of the following constitutes unfair discrimination in life insurance?

Discrimination between individuals of the same class and equal life expectancy

When recommending a life insurance policy, one would concede all of the following EXCEPT

Existing Insurance Program

Which of the following is NOT a settlement option for life policies?

Extended term

Which rider includes coverage for the insured's spouse and children?

Family

When using the needs approach to determine the amount of life and health insurance needed, it is

Family's financial objective in the event of death or disability of the income earner

Term life insurance offers pure protection

For a specified period of time

A deliberate lie by an insured to the insured to the insurer to obtain a lower premium is an example of

Fraud

A producer that presents a claim for payment which contains false information is guilty of

Fraud

Which type of authority is given by an insurer to a producer but NOT formally communicated?

Implied

The unfair trade practice of using threat or force to restrict fair trade in the transaction of insurance is called

Intimidation

Which of the following elements of a contract would be absent for an applicant under the influence of alcohol at the time of application

Legal purpose

Which type of life insurance policy is characterized by premiums that are fully paid up within a stated period, after which no further premiums are REQUIRED:

Limited payment insurance

Which action must be taken by a producer when premiums are calculated?

Maintain premium funds in interest-bearing accounts

At the time of an insured's death, a per capita distribution of policy proceeds is/are paid to

Named living primary beneficiaries.

Under the Michigan Insurance Code, what must a licensee do prior to operating under an assumed -

Notify the Commissioner prior to use

What is an action the director may take when a consumer complains they suffered financial harm as a result of an insurance licensee's action?

Order the licensee to make restitution within 30 days or be subject to an administrative hearing.

What is an action the Director may take when a consumer complains they suffered financial harm a—

Order the licensee to make restitution within 30 days or be subjected to an administrative -

Liquidity in a cash value life insurance policy is demonstrated by

Permitting the policy owner to request a loan against the cash value of the policy

Which nonforfeiture option allows the policyowner to purchase less coverage for life?

Reduced Paid-Up Insurance

Term life insurance differs from permanent life insurance in that most often, term life insurance.

Remains in force for a specific period of time.

A producer has a responsibility to do which of the following?

Represent the insured

Purchasing insurance is an example of which of the following methods of handling risk?

Retention

Which of the following is the form of risk if an entity chooses to set aside funds to be self-insuring?

Retention

The principal use of an annuity is to provide income for.

Retirement

If the insured dies within a specific field time of a policy issuance which of the following refunds the purchase payments?

Return of premium rider

Which of the following methods could eliminate the risk of having a sky diving accident?

Risk avoidance

Which of the following is a solicitation by a producer?

Sales presentation

Which of the following characteristics applies to a modified life policy?

The face amount of the policy will automatically increase after the policy is in force for 5 years

Premiums from a fixed annuity are invested in

The general account

If an annuitant dies during the accumulation period, his or her beneficiary will receive

The greater of the accumulated cash value or the total premiums paid.

Each life insurance policy offers a 30-day grace period. This prevents the policy being can of the following is TRUE, if an insured dies during the 30-day grace period, assuming the policy is in place

The late premium will be subtracted from the benefit amount

Each life insurance policy offers a 30-day grace period. This prevents the policy from being cancelled if payment is received, but within 30- days of the premium due date. Which of the following is true, if an insured dies during the 30-day grace period, assuming the policy is otherwise in good standing?

The late premium will be subtracted from the benefit amount

If an annuitant died during the accumulation period, his or her beneficiary will receive

The lesser of the accumulated cash value of the total premiums paid

Which of the following represents a reduced paid-up nonforfeiture option?

The new policy will have a decreasing face amount

What is prohibited by the Graham Leach Billy act and chapter 5 of the Michigan insurance code?

Third-party claimants right

Purchasing insurance is an example of which of the following methods of handling risk?

Transference

For advertising to be legal in the insurance business it must be

Truthful and accurate

Which activity does NOT require an insurance producer's licenses?

Underwriting

When individuals purchase life insurance to enable heirs to pay estate taxes, this is called

Estate Conservation

When individuals purchase life insurance to enable heirs to pay estate taxes this is called

Estate conservation

The standard provision of group life insurance policies includes all of the following except

Evidence of insurability is never required for enrollment

The taxable portion of a monthly income benefit paid during the annuity phase from a nonqualified annuity is calculated using the

Exclusion ratio

What is the term used to describe the taxable portion of non-qualified annuitization payments?

Exclusion ratio

The premium mode defines the

Frequency of the premium payment

Which rider would allow additional insurance to be purchased at specific dates or events, without additional underwriting?

Guaranteed insurability

What is it called when an officer of a company gives an agent authority either orally or in writing?

Implied

Which approach considers the future needs of the survivors in determining amounts of life insurance

Needs approach

Which of the following is considered an unfair practice for a life insurance application?

Refusing to insure a person based solely on national origin

Indemnify is often referred to as

Reimbursement

Which rider allows the husband or wife of the insured to be added to the primary insured's policy?

Spouse term rider.

Insurance applicants with an average life expectancy who represents the same risk classification as -

Standard

Which form of Insurer has shareholders?

Stock company

In addition to the actual policy, an entire contract includes which of the following?

The application

Specific statements made on an application that the insured guarantees to be TRUE are

Warranties

A policy may contain provisions excluding or restricting coverage as specified in the event of death under all of the following except.

Suicide

What type of insurance is an additional rider?

Term life

Which type of insurer is sometimes referred to as a non-participating company?

Stock Insurer

In which of the following policies is the insured covered to age 100 and the owner pays a level premium throughout the duration of the policy:

Straight whole life policy

Which kind of retirement plan can a 1500 employee for a corporation establish?

401k

In the Michigan Insurance Code, Chapter 45, Insurance Fraud defines financial loss as all these EXCEPT?

Additional premiums

Interest earned on a Traditional IRA is taxed

At distribution

Which of the following is a whole life policy option that allows for a delinquent premium to be paid automatically by a new policy loan?

Automatic premium loan option

Two business partners own life insurance on each other. If one partner dies, which of the following contracts allows the surviving partner to use the death benefit to purchase the deceased

Buy-sell Agreement

Two business partners own life insurance on each other. If one partner dies, which of the following...deceases owner's interest?

Buy-sell agreement

All of the following are subject to false advertising regulations EXCEPT

Circulars

Which type of insurer is sometimes referred to as a participating company?

Mutual Insurer

When an insurer appointment with a producer is terminated, the party that MUST notify the producer of the termination to the:

National Association of Insurance Commissioners (NAIC)

Which universal life policy has investment choices?

Variable

A deliberate lie by insured to the insurer to obtain a lower premium is an example of.

Aleatory

Prior to annuitization, what is the nonforfeiture value of annuity?

All premiums paid minus any withdrawals and surrender changes

All of the following riders can increase the death benefit amount EXCEPT?

Waiver of premium

Specific statements made on an application that the insured guarantees to be true are.

Warranties

Human life value approach measure which of the following?

Total lifetime earnings.