Life insurance exam

Who pays insurance consultants?

Applicants

An IRA contribution can be made from which of the following ?

Cash

Which of the following is not true of the agents implied authority?

It is specifically stated in the contract

Concerning Juvenile Life insurance which of the following statements is INCORRECT

Juvenile Life is classified as any life insurance purchased by a minor.

Which of the following would be a violation of life policy illustration regulation in this state?

Providing a customer with an incomplete illustration

All of the following are true regarding the waiver of cost insurance rider EXCEPT

The rider expires when the insured reaches age 60

If someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should it be?

permanent

Which of the following is true regarding joint life annuity?

The payment stops at the first death

All the following information needs to be included on the application for life insurance EXCEPT

Health insurance with other insurers

Which of the following best describes the difference between joint life and joint and survivor annuity?

In joint life option, the benefits stop after the first death

An insurance company receives an application with some information missing and issues the policy anyway. What is this called?

Waiver

In which of the following situations would the facility of payment provision become available?

The named beneficiary is deceased

What happens if a deferred annuity is surrendered before the annuitization period?

The owner will receive the surrender value of the annuity.

Under an extended term nonforfeiture option, the policy cash value is converted to

The sane face amount as in the whole life policy

A distribution from an employee sponsored retirement plan or from an IRA is eligible for a tax free rollover. If it's reinvested in an IRA within

60 days

An insured purchases a non participating whole life policy. This policy includes all of the following except

Dividends

Which of the following is a correct statement about annuities?

Fixed annuities do not provide protection against inflation

What type of annuity activity will cause immediate taxation of the interest earned?

Surrendering the annuity for cash

All of the following are general requirements of a qualified plan except

The plan must be temporary

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium

All of the following are true regarding the federal Fair credit reporting act EXCEPT

Reports may be sent to anyone who requests one

If the annuitant dies before the annuity start date, which of the following is true?

The interest is taxable

Within how many days after the receipt of the proceeds may the owner rescind the life settlement contract?

15 days

Guaranteeing future dividends is considered to be unfair or deceptive act known as

Misrepresentation

Which of the following types of agent authority is also called perceived authority

Apparent

To purchase insurance the policy owner must face the possibility of loosing money or something of value in the event of loss. What is the concept called

Insurable interest

During the accumulation phase of a fixed annuity the annuitants interest rate is based on a minimum rate specified in the contract or the current interest rate whichever is

Lower

If a life insurance company uses HIV testing as a part of its underwriting when must an applicant be notified of the procedure?

Prior to performance of test

An insured decides to surrender his whole life policy. The cash value at surrender what part of the surrender value would be income taxable?

The difference between the premiums paid and the cash value.

In a life insurance application, all the following signatures will be required EXCEPT

The home office underwriter

All of the following are true of annually renewable term insurance EXCEPT

proof of insurability must be provided at each renewal

The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral -insured is not legally bound to anything

During partial withdrawal from a universal life policy which portion will be taxed?

Interest

Which of the following insurance principles states the ambiguities in a policy will always be in favor of the insured?

Adhesion

All of the following statements are correct regarding credit life insurance EXCEPT

Benefits are paid to the borrower's beneficiary

When the insured selects the extended term nonforfeiture option the cash value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase

Which of the following best describes annually renewable term insurance?

It is level term insurance

When an insured terminates membership in the insured group, the insured can convert to

Whole life without proof of insurability

What type of interest rate is guaranteed in universal life policies ?

Contract interest rate

Which of the following term refers to the non-taxable portion of each annuity benefit payment?

Cost base

Which of the following methods of calculating the amount of life insurance needed takes into account the insureds wages, years until retirement and inflation?

Human life value approach

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

Implied

With Adjustable life, the owner can change all the following EXCEPT

The insured

Which of the following are generally not considered when underwriting group insurance?

The insureds médica history

An insured intentionally did not disclose a material fact on an application for insurance, what is this called?

Concealment

A whole life policy is surrendered for reduced paid up policy. The cash value in the new policy will

Continue to increase

Which of the following is true regarding a market value adjusted annuity?

The owner is guaranteed a fixed interest rate for a specific period of time

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

Reduced Paid-Up

What method do insurers use to protect themselves against catastrophic losses?

Reinsurance

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

Universal life

Which of the following would be true of both fixed period and fixed amount settlement options?

Both guarantee the principal and interest will be fully paid out

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

If an annuity has a guaranteed minimum interest rate this means

The interest rate will never drop below the guaranteed minimum

Not all losses are insurable and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following except

The loss may be intentional

An insurance agent who represents multiple companies on a nonexclusive basis earns commission on personal sales and overrides of the their business is considered?

Independent Agency System

All of the following are true statements regarding the accumulation at interest option except

The interest is not taxable since it remains inside the insurance policy

Which of the following is NOT an allowable 1035 exchange?

A whole life insurance policy is exchanged for a term insurance policy

All of the following statements are true regarding Ordinary Straight life policy EXCEPT

It does not have a guaranteed death benefit

Which of the following would not be considered an unfair claims settlement practice

Refusing to pay claims following an investigation

Applicants for a license must furnish satisfactory evidence of all the following to the commissioner except

State residency

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Extended term

Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT

Other insurance coverages

According to the common disaster clause, of the insured and primary beneficiary are killed in the same accident. The following will be assumed

The primary beneficiary does before the insured