Life Insurance Exam

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Notice of a hearing for a cease and desist order must be given at least how many days in advance

10 days

What percentage of a company's employees must take part in a noncontributory group life plan

100%

What percentage of a company's employees must take part in a noncontributory group life plan?

100%

A policy holder has requested access to personal information collected and recorded by the insurance agent. The agent must respond to the request within

30 business days

Apparent

Agent authority also called "perceived authority"

A Universal Life Insurance Policy is best described as a/an

Annually Renewable Term policy with a cash value account

A universal life insurance policy is best described as

Annually renewable Term policy with a cash value account

Admitted

Another term for authorized insurer

Application

Contains the most information used for underwriting purposes.

What are considered exceptions to the early distribution rule:

Death, Disability, divorce decree, and a series of equal payments over the participant's life expectancy, a loan from the plan, as part of a qualified rollover

Life insurance as an Executive Bonus is owned by the company

FALSE

The amount of insurance on a life of any debtor may exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor

FALSE

Life insurance Death proceeds are

Generally not taxed as income

A ROP term life policy is written as what type of term coverage

Increasing term insurance policy It pays an additional death benefit to the beneficiary equal to the amount of the premiums paid

This provision restores an insured person to the same financial state as before the loss

Indemnity Provision

Fixed amount option

Installments have no life contingencies and a specific amount of benefits will be paid until funds are exhausted with annuitant living or not.

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent

NLT time the policy is delivered

Insurance agents must provide notice of their information practices to applicants and policyholders

Who makes up the medical information Bureau

Insurers

Interest option

Interest credited under this option is TAXABLE

Waiver of Cost of Insurance Rider is found in what type of insurance

Is found in Universal Life policies, the rider allows the cost of insurance to be waived except premium costs for cash value.

5 days

Is how many days the insurer or reporting agency has to comply when a consumer requires additional information concerning investigative consumer reports.

A policy which increases significantly in face amount reaches a specific age (usually 21)

Jumping Juvenile

Self employed retirement program is a ...

Keogh Plan

What organization must all admitted insurers belong

Life, Accident and Sickness Insurance Guaranty Assoc. (LASIGA)

The installments for a FIXED PERIOD ANNUITY SETTLEMENT OPTION is NOT

NOT a life CONTINGENCY Option

reduction of premium dividend is applied to ...

Next year's premium

When Calculating the amount a policy owner may borrow from a variable life policy, what must be subtracted from the policy's cash value

Outstanding Loans and interest

The Use of Life insurance as an executive bonus is a policy owned by

Owned by the employee

What is NOT considered exceptions to the early distribution rule?

Participant's Debt

30 days

Policy holder requested to access to personal information collected and recorded by the insurance agent.

Included in a policy summary

Premium amounts and surrender Values

What must be included in a policy summary?

Premium amounts and surrender values

A decreasing term policy

Premiums remain level with a decreasing term policy; only the face amount decreases

KEOGH retirement plan

President and employee of a family corporation would be eligible to establish a Keogh retirement

Not tax deductable

Roth IRA contributions are NOT tax-deductable. because the contributions are made with after-tax dollars, qualified distributions are not income taxable. Contributions can continue beyond age 72ys and distributions are made with after -tax dollars

When a life insurance policy stipulated that the beneficiary will receive payments in specified installments for a specified number of years, what provision prevents the beneficiary from changing o borrowing from planned installments

Spendthrift provision

The amount of insurance of the life of any debtor may NOT exceed the greater of the scheduled or actual amount of unpaid indebtedness to the creditor

TRUE

When an insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting information?

The Application

The annuitant dies while the annuity is still in the accumulation stage what statement is TRUE

The beneficiary receives benefits from the annuity: Either the amount paid into the plan OR the cash value (WHICHEVER IS GREATER)

Creating an Estate

The best reason to purchase life insurance rather than annuities

Consideration

The binding force in any contract. It is the part of the insurer to promise to pay in the event of loss

J Transferred his life insurance policy to his son two years before his death. What happens to J's policy?

The entire face value of the policy will be included in J's taxable estate.

The amount of payments for a life income settlement option is determined by NOT taking into account

The insured's age at death

False

The owner must be the in the party to receive benefits

Policy contains sufficient cash to cover the cost of insurance

The policy owner of a Universal Live policy may skip paying the premium and the policy will not lapse

Fiduciary Duty

The trust that a client places in the producer in regard to handling premiums

Annuity contracts grow tax deferred

There is no current income taxation upon the growth in the annuity

The type of policy allows the owner to skip premium payments, provided there is enough cash value in the policy to cover the premium amount

Universal Life

Option A

Universal Life option has a gradually increasing cash value and a level death benefit

Disability Income Benefit Rider

When an insured is disabled for longer than 6 mos, they get a monthly premium waiver and monthly income

Guaranteed Insurability Rider

When policy owner is allowed to make periodic additions to the face amount at standards rates without proving insurability

The Beneficiary

Who receives the annuity benefits if the annuitant dies

Licensing of Viatical settlement brokers

a business entity may receive a viatical settlement broker license

Licensing of viatical settlement brokers

a business entity may receive a viatical settlement broker license

Buy-Sell agreement

a legal document which would dictate who can buy a deceased partner's share of a business

Limited Pay Life

a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. Wha kind of policy is it?

Current assumption life

another name for interest-sensitive whole life insurance

At what time may the Insurance Commissioner inspect records pertaining to insurance transactions?

at any business time in the 3 years immediately following the relevant transaction

Class Designation

beneficiaries are not identified by name

The death benefit under universal life option B, gradually increase each year

by the amount the cash value inceases

Insurable risk is not

catastrophic

Another name for interest - sensitive whole life insurance is

curent assumption life

Owners Rights

explains the policy owner's right to change beneficiaries, choose options, and receive proceeds of a policy

Paid-up addition dividend is used to increase the...

face amount

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

hazards

A life insurance policy Legal purpose of what two elements

insurable interest and consent

A universal policy has two components

insurance and cash account

Taxation on accumulation

is deferred in both qualified and non-qualified retirement plans.

An offer made

is when an applicant submits and application to the insurer

Why is an equity indexed annuity considered to be a fixed annuity?

it has a guaranteed minimum interest rate

A universal Life policy has two types of interest rates that are called

minimum and target

A universal life policy has two types of interest rates

minimum and target

During replacement of life insurance, a replacing insurer MUST

obtain a LIST of ALL life insurance policies that will be replaced

With dividends the ownership belongs to the

policy holders

A life insurance policy has a legal purpose if both of which of the following exist

policy owners and named beneficiaries

Which nonforfeiture option provides coverage for the longest period of time?

reduced PAID UP which provides protection until the insured reaches 100 y.o.

The client

responsible for the suitability of an agent's recommendations in the event a client refuses to provide information related to their tax status, investment objectives, or overall financial situation and enters an annuity contract

The premium on a children's rider

stays the same no matter how many children are added to the policy

Any distributions from MECs are...

taxable including withdrawals and policy

In credit life insurance who is the policy owner

the Creditor

5 years under a group plan

the amount of time to qualify for a conversion to an individual policy of the same coverage

Installments for fixed period option

the annuitant selects the time period for the benefits, and the insurer determines how much each payment will be. This option pays for a specific time only and not life contingencies

Reduced Paid-up

the nonforfeiture options providing coverage for the longest period of time

Indexed Whole Life

the type of insurance policy may automatically increase the face amount of the policy as the consumer price index increases

Survivor protection

used when a married couple determine the financial needs of their children in the event one of both should die prematurely

Limited pay whole life

when a client wants both protection and savings from the insurance and is willing to pay premiums until age 65


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