Life insurance test
a policy will pay the death benefit if the insured dies during the 20 year premium paying period and nothing if death occurs after the 20-year periods
level term
life insurance death proceeds are
Generally not taxed as income
credit life insurance
insures the lies of a debtor
which of the following policy components contain the company's promise to pay
insuring clause
a participating insurance policy may do which of the following
pay dividends to the policyowner
which of the following licenses is required for a surplus lines producer
property and casualty
all of the following are requirements for life insurance illustration except
they must be part of the contract
what is the purpose of the buyer's guide?
to allow the consumer to compare the cost of different policies
the waiver of cost of insurance rider is found in what type of insurance
universal life
insurance companies may be classified according to the legal form of their ownership. this type of company organized to return any surplus money to their policyholder is
mutual insurer
to sell variable life insurance policies, an agent must receive all of the following except
SEC registration
all of the following would be different between qualified and non qualified retirement plans except
taxation on accumulation
when an employee terminated coverage under a group insurance policy, coverage continues in for for
31 days
all of the following are true of key person insurance except
the pan is funded by permanent insurance only
if an applicant license has lapsed within the past year, the applicant may apply for late renewal of the license within the max of how many months of expiratuon
12 months
an employee quits her job where she has a balance of 10,000 in her qualified plan. the balance was paid out directly to the employee in order for her to move the funds to a new account. if she decides to rollover her plan to a traditional ira, how much will she receive from the plan administrator and how long does she have to complete the tax-free rollover?
8000, 60 days
all of the following statements concerning dividends are true except
dividends amounts are guaranteed in the policy
all of the following statements are true regarding tax-qualified annuities except
employers contributions are not tax deductible
universal life insurance policy has 2 types of interest rates that are called
guaranteed and current
under the fair credit reporting act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must
respond to the consumer's complaint
which of the following riders is often used in business life insurance policies when the policy owner needs to change the insured under the policy
substitute insured rider
which is true regarding insured who have been classified as preferred risks
their premiums are lower
what is purpose of settlement options
they determine how death process will be paid
which of the following would not be considered an exception to the national do not call list
calls based from outside of the US
what happens when a policy is surrendered for its cash value
coverage ends and policy cannot be reinstate
which of the following types of insurance would be written by a limited lines agent
credit incurance
another name for a substandard risk classification is
rated
which nonforfeiture option provides coverage for the longest period of time
reduced paid up
an insurance producer is acting as a broker when he or she negotiates for an insurance contract on behalf of
a client
all of the following could own group life insurance except
a group needing low-cost life insurance
all of the following candidates for a resident producer license may be exempted from the examination requirement except
a resident producer licensed for property and casualty insurance applying for a life insurance license
which of the following determines the cash value of a variable life policy
the performance of the policy portfolio
the insured under $100000 life insurance policy with a triple indemnity rider for accidental death was killed in car accident. it was determined that the accident was his fault. the triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. in this case, what will the policy beneficiary receive?
100,000
within how many days of requesting an investigate consumer report must an insurer notify the consumer in writing that that report will be obtained
3 days
during policy replacement, the replacing insurer must notify existing insurers within what time period
5 business days
how many days does a producer have to remit the collected premiums to the insurer
5 business days
in cases where a producer's license has been revoked, the producer must wait for how long before applying for reinstatement
5 years
if a person violates a cease and desist order, the commissioner can turn the matter over to the nj superior court for further legal action and can assess a fine for each violation of up to
5000
what is the fine for violating the commissioner's cease and desist order
5000
the max the insurance guaranty association will pay to an individual for life insurance death benefits is
500000
which of the following would be considered an unfair claims settlement practice
admission the insured that if the claim goes to arbitration, the insured would probably receive less that what is currently being offered
which of the following is the closest term to an authorized insurer
admitted
the full premium was submitted with the application for life insurance, and the policy was issued 2 weeks later as requested. when does the policy coverage become effective
as of the application date
which of the following would not be considered a misrepresentation on the part of the insurer
backdating policies to secure a lower premium for the insured
social security was created to protect against all of the following except
bad investment choises
if the annuitant dies during the accumulation period, who will receive the annuity benefits
beneficiary
when an insurance producer negotiates for an insurance contract on behalf of a client, the producer is acting as
broker
an insured pays an annual premium to his insurer. in return, the insurer promises to pay benefits in accordance with the terms of the contract
consideration
according to the entire contract provision, what document must be made part of the insurance policy
copy of original application
which of the following are not fundable by annuities
death benefits
misrepresenting an insurance policy as a share of stock is an example of which of the following
false advertising
a lucky individual who 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
the MIB was created to protect
insurance companies from adverse selection by high risk persons
which provisions of life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid
insuring clause
which for the following statements about the reinstatement provisions is true
it requires the policy owner to pay all overdue premiums with interest before the policy is reinstated
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
mutual
which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit
option a
an insured purchases a life policy in 2010 and died in 2017. the insurance company discovers at the that time that the insured had concealed information during the application process. what can they do?
pay the death benefit
which of the following allows the insurer to relive a minor insured from premium payments if the minor's parents have died or become disabled
payor benefit
which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance
replacement rule
which of the following is true regarding variable annuities
the annuitant assumes the risks on investment
all of the following are examples of third-party ownership of life insurance except
an insured borrows money from the bank and make a collateral assignment of part of the death benefit to secure the loan
if an insurance company makes a statement that its policies are guaranteed by the existence of the insurance guaranty association, that would be considered
an unfair trade practice
all other factors being equal, the least expensive first year premium payment is found in
annually renewable term
partners in business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. what type of insurance policy may be used to fund this agreement?
any form of life insurnace
which of the following is the basic source of information used by the company in the risk selection process
application
a group of 4 entrepreneurs decides to open an insurance company. which of the following is true?
at least 1 member must be licensed insurance producer
circulating deception sales material to the public is what type of unfair trade practice
false advertising
what is the advantage of having a qualified annuity
favorable tax treatment
which of the following entities established the do not call registry
federal trade commission
the requirement that agent must account for all. insurance funds collected, and are not permitted to commingle those funds with their own is known as
fiduciary responsibility
a universal life insurance policy has 2 types of interest rates that are called
guaranteed and current
an individual is purchasing a permanent life insurance policy with face value of 25000. while the 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 this policy
guaranteed insurability option
an insurer devises an intimidation strategy in order to corner a large portion of the insurance market. which of the following best describes this practice?
illegal
which of the following is not true regarding a certificate of authority
it is issued to group insurance participants
if an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy
it is only taxable if the cash value exceeds the amount paid for premiums
which of the following is not considered a misrepresentations it pertains to unfair trade practices
making comparisons between different policies
which of the following is not true regarding policy loans
money borrowed from the cash value is taxable
z falls from the roof of his house while fixing it and damages his spinal column enough to render him disabled for a year. his insurance policy carries a disability income benefit rider. which of the following benefits will z receive
monthly premium waiver and monthly income
under the fair credit reporting act, individuals rejects for insurance due to information contained in a consumer report
must be informed of the source of the report
which of the following individuals must have insurable interest in the insured
policyowner
the life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specific period of time is known as the
incontestability clause
an insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies, and habits. what type of report is that
inspection report
producers and insurers actions related to insurance transactions, from selling insurance to processing claims are referred to as
insurance-related conduct
who makes up the medical information bureau
insurers
what is the benefit of choosing extended term as nonforfeiture option
it has the highest amount of insurance protection
what is the purpose of a conditional receipt
it is intended to provide coverage on a date earlier than the date of issuance of the policy
a universal life insurance policy is best described as
annually renewable term policy with cash value account
if an insurer cancels any agency contract, it must notify the commissioner in writing within how many days
15 days
validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many year?
2 years
if an insured requires an application in order to reinstate a policy, and if the insured requests reinstatement in writing, an application must be delivered to the insured within
30 days
in NJ, the public is protest by a notice of discontinuance when a policy is discontinued for nonpayment of premium. when a policy is discontinued, all of the following are required except
refund of premiums
all of the following professional designations are recognized by the department as acceptable substitutes for education and examination requirements excpet
ChFC
when an insurance producer negotiates for an insurance contract on behalf of a client, the producer is acting as an
broker
forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
coercion
which policy component decreases in decreasing term insurance
face amount
what describes the specific information about a policy
policy summary
insurance is regulated
mostly on state level
which of the following is not required information a producer must provide before soliciting insurance
producer contact information
which of the following describes the tax advantages of a qualified retired plan?
the earnings in the plan accumulate tax deferred
all of the following entities regulate variable life policies except
the guaranty association
who bears all of the investment risk in a fixed annuity
the insurance company
under an extended term nonforfeiture option, the policy cash value is converted to
the same face amount as in the whole life policy
which is generally true regarding insureds who have been classified as preferred risks?
their premiums are lower
if an insured requires an application in order to reinstate a policy, and if the insured requests statements in writing, an application must be delivered to the insured within
30 days
a certification of license status report can be run on any currently licensed NJ producer, but can only contain information on formal disciplinary actions taken within the past
4 years
in an adjustable life policy all of the following can be changed by the policy owner except
type of investment
an insurer wants to begin underwriting procedures for an applicant. what source will it consult for the majority of its underwriting information
application
if an insurer meets the state's financial requirements and is approved to transact business in the state, it is
authorized
a policy owner fair to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. this is due to what provision?
automatic premium loan
an insured receives an annual life insurance dividend check. what term best describes the arrangement
cash option
the life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specific period of time is known as
incontestability clause
which provision of life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid
insuring clause
a nonresident licensed producer decides to conduct business under an assumed name. Which of the following is true
nonresident producer may not conduct business under any name besides legal names
a life insurance policy insures again 5 different perils. if the policy owner wants to cancel the coverage of one of those perils, can he do that?
only if the policy specifics that a separate premium for that peril coverage is separately canceable
which of the following riders would not cause the death benefit to increase?
payor benefit rider
which of the following is correct concerning the taxation of premiums in a key-person life insurance policy
premiums are not tax deductible
which fo 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
term illustration in life insurance policy refers to
presentation of non guaranteed elements of policy
an insured committed suicide 6 moths after his life insurance policy was issued. the insurer will
refund the premiums paid
what method do insurers use to protect themselves again catastrophic losses
reinsurance
the ownership provision entities the policy owner to do all of the following except
set premium rates
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
what is the purpose of a disclosure statement in life insurance policies
to explain features and benefits of a proposed policy to the consumer
what is the purpose of key person insurance
to lessen the risk of financial loss because of the death of a key employee
the paid-up addition option uses the dividend
to purchase a smaller amount of the same type of insurance as the original policy
