Life insurance

All advertisments, regardless of their source, are the responsibility of the

Insurer

An insured has a continuous premuim whole life policy. She would like to use the policy dividends to pay off her policy sooner. What dividend option could she use?

Paid - up - option

Peril is most easily defined as

The cause of loss insured against

Which of the following is NOT a characteristic of an insurable risk?

The loss must be catastrophic

Which of the following is not a characteristic of an insurable risk?

The loss must be chatastrophic

Fixed annuities may provide all of the following EXCept

...

At what age can a participant receive distributions from a qualified plan without incurring a 10% penalty?

59 .5

If taken as a lump sum, life insurance procedds to benficiaries are passed

A free of federal income taxation

Which of the following would be likely to establish a SEP?

A small empoyer

When must insurable interest exist in a life insurance policy?

At the time of application.

Thje accelerated benegits provision will provide for an early payment of the death benefit when the insured

Becomes termanilly ill

If the annutant dies during the accumulation period, who will receive the annuity benefits?

Beneficiary

Which of the following premium modes would result in the highest annual cost for a life insurance policy?

Monthly

Which of the following reasons for an early distribution of funds from a qualified retirement plan would incur a 10% penalty?

Participants debt

All of the following actions by a producer may be grounds for license revocation or nonrenewal EXCEPT

Participating in controlled buisness

Wheat is the primary purpose of an 401(k) plan?

Retirement.

The advantage to qualified plans to employers is

Tax-deductible contributions.

A 403(B) tax sheltered annuity is available for

Teachers and non profit organizations.

A 403(b) tax-sheltered annuity is available for

Teachers and nonprofit organizations

When an annuity is written, whose life expectancy is taken into account?

The annuitant

What is the main purpose of requireing licenses for persons involved in transacting insurance?

To protect the general public

The waiver of cost rider is found in what type of insurnace?

Universal Life

Which of the following life inusrance policies has two death benefits options?

Universal life

What type of policy provides permanent protection?

Whole life

What type of policy provides permanent protection?

Whole life.

If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is

a modified endowment contact

The life insurance policy clause that prevents an insurance company from denying payment of a death claim agter a specified period of time is known as the

Incontestability clause

Who would be allowed catch-up contributions in an individual quallified plan?

Individuals age 50 or older

An agent offers his client free tickets to a sporting event in exchange for the purchase of aninsurance policy. The agent is guilty of

Rebating

An agent offers his client free tickets to a sporting event inexchange for the purchase of an insurance policy. The agent is guilty of

Rebating

Upon policy delivery the agent must confirm that all of the following are received EXCEPT:

Signed waiver of premium.

The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insureds death, the policy preceeds will go to

The insured's estate

The sole beneficiary of a life insurance policy dies before the insured. If the policy owner fails to change the beneficiary gefore the insured's death, the policy proceeds will got to

The insureds estate

in an insurance transaction, which of the following does a licensed agent represent?

The insurere

When must insurable interest exist in a life insurance policy?

at the time of application

Events or conditions that increase the chances of an insured loss occurring are referred to as

Hazards

The life insurance policy clause that prevents an insurance compnay from denying payment of a death claim after a specified period of time is known as the

incontestability clause

A week after an insured receives a new life policy, he decides to return it and requests a refund of premium. What provision fives the insured the right to return the policy?

Free look

When a benficiary recieves payments consisiteing of both principal and interest portions, which parts are tasble as income?

interest

Employer contribution made to a qualified plan are...

subject to vesting requirements

When doing business in this state an insurance company that is formed under the laws of another state is known as which type of insurer?

Foreign

Which of the following transaction in an annuity will cause immediate taxation of the intrest earned?

Srrendering the annuity for cash

What type of policy shorten the premium paying period but allows the coverage to continue to age 100?

Limited Pay

Which of the following is the basis for a claim against an insurance policy?

Loss

Which of the following may contribute to an HR-10 plan?

Self-employed plumber

Which of the following is not the consideration in an insurance policy?

The promise to pay covered losses

Which of the following is true regarding taxation of accelerated benefits paid under a life insurance policy?

They are received tax free.

When agents are acting within the scope of their contract, their actions will be assumed to be the acts of the

insurer

Which of the following determines the cash value of a variable life policy?

...

What does "renewable" mean in a term insurance policy?

Continue coverage for another term without evidence of insurability

If the beneficiary wants a guarantee that police proceeds will be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

Fixed period

In a single employer group plan, what is the name of the policy issued to the group sponsor?

Master contract

What type of life inusrance is most commonly used for group plans?

Annually renewable term

Which of the following is not true regarding an annuity certain

Benefits stop at the annuitant's death

Representations are statements made ny the applicatnt for insurace that are

Considered true to the best of the applicant's knowlege

An annuitant has been making periodic premium payments into an annuity. The income payments are shceduled to begin 2 years after the annuity purchase. What type of annuity is it?

Deffered

All else being equal, which of the following will NOT be considered unfair discrimination by insurers

Discriminating in policy benefits base onf the insureds habits and lifestyle.

What annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases a the annuitant's death?

Pure life

If an agent fails to obtain an applicant' signature on the application, the agent must...

Return the application to the applicant for a signature

Which of the following is NOT the consideration in an insurance policy

The application given to a prospective insured.

In insurance, an offer is usually made when

The application is submitted

Which of the following is a generic consumer publication that explains life inusrance policies in general terms to help the applicants make educated decisions?

The buyer's guide

An annyity would normally be purchased by an individual who wants to

Secure income for reitirement

Which of the following best describes taxation during the accumulation period of annuity?

Taxes are deferred.

An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information>

The application

An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information?

Application

All else being equal, which of the following will NOT be considered unfair deistimination by insureers?

Discriminating in policy benegits based on the insured's habits and lifestyle

If an insurer makes a statment that its poliicies are guaranteed by the existence of the INsurance Guarnty Association, that would be considered

An unfair trade pracitce

An individual buys a flexable premium deferred life annuity with 20 year period certain. What would the beneficiary recieve if the annuitant died 5 years after beginning the annuity phase?

Payments for 15 years

If an insured died during the grace period, what is the insurance company obligated to pay?

The face amount minus any owed premium

If an insurer makes a statement that is policies are guarantee by the existence of the Insurance guaranty association, that would be considered...

An unfair trade practice

What type of life insurance is most commonly used for group plans?

Annually renewable term

An insurer who deliberately makes a maliciously critical statement about another insurance company is a guilty of an illegal trade practice is called

Defamation.

Which of the followed is considered the nontaxable return of unused premiums

Dividend

If a retirement plan or annuity is "qualified," this means

It has favorable tax treatment

The form of life annuity which pays benefits throughout the liffetime of the annuitant and also guarantees payment for a minimum number of years is called

Life income with period certain

An insured had paid only part of her total number of IRA premiums before she died. What effect will this have on the insured's estate?

Only the premiums paid will be included in the estate

Which type of life insurance policy generates immediate cash value?

Single premium

Which type of life insurnce policy generates immediate cash value?

Single premium

For the purpose of insurance, risk is defined as

The chance of loss

Which of the following determines the cash value of a variable life policy?

The performance of a seperate account

SIMPLE plans require all of the following except:

At least 1,000 employees

When agents are acting within the scope of their contract, their actions will be assumed to be the acts of the

Insurer.

Employer contributions made to a qualified plan

Are subject to vesting reuirements

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

Making accurate comparisons of policies is not illegal

What annuity settlement option provides payments to an annuitant for the rest of the annuitant's life and ceases at he annuitant's death

Pure life