life producer
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a 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
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
$3,000
producers who have allowed their license to lapse may reinstate the license without retaking the examination within what maximum time period
12 months
The 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 years?
2 years
an insurance company forwards fixed annuity premiums to their general account, where the money is invested. the guaranteed minimum interest is set at 2.5%. during an economic down string, the investments only drew 2%. what interest rate will the insurer pay to its policyholders
2.5%
how long are the free-look periods provided during policy replacement
20 days
If a producer is found guilty of a violation which has caused a claimant to suffer actual economic damages, a court may award punitive damages in addition to the amount of the claim ultimo cannot exceed what percent
25%
following the initial licensing period, how many hours of continuing education are required of licenses
45
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
if the insurer does not pay the benefit to the beneficiary within the required time period, what interest rate will be assessed on the proceeds
6%
if a company has a Simplified Employee pension plan what type of plan is it
A qualified plan for a small business
At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?
Adjustable Life
An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?
Aleatory
which of the following applicants could the insurer charge a higher rate premium and not violate regulations regarding unfair discrimination
An applicant who is a smoker
the current interest rate on an equity indexed annuity is often based on
An index like Standard & Poor's 500
Under which of the following circumstances would an insurer pay accelerated benefits
An insured is diagnosed with cancer and needs help paying for her medical treatment
Which of the following can surrender a deferred annuity contract
Annuity owner
employee contributions made to a qualified plan
Are subject to vesting requirements
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees.
which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium
Automatic premium loan
all of the following employees may use a 403(b) plan for their retirement except
CEO of a private corporation
which of the following would not be considered an unfair and deceptive practice
Controlled business
According to the entire contract provision, what document must be made part of the insurance policy?
Copy of the original application
what happens when a policy is surrendered for its cash value
Coverage ends and the policy cannot be reinstated
which of the following will not be an appropriate use of a deferred annuity
Creating an estate
which of following is not a term for the period of time during which the annuitant or the beneficiary receives income
Depreciation period
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.
An agent selling variable annuities must be registered with
FINRA
when an employee terminates coverage under a group insurance policy, coverage continues in force
For 31 days.
life insurance death proceeds are
Generally not taxed as income
which of the following policies is characterized by a provision where the premiums are lower in the early years of the policy and increase over time to a point where they become level for the remainder of the policy
Graded premium whole life
In annually renewable term policies provide a level death benefit for a premium that
Increases annually
an underwriter may obtain information on an applicants hobbies, financial status, and habits by ordering a(n)
Inspection report
what is the purpose of a free look period in insurance policies
It allows the insured to reject the policy with a full refund.
which of the following is correct regarding credit life insurance
It insures the life of a debtor
all of the following statements are true regarding installments for a fixed period annuity settlement option except
It is a life contingency option.
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?
It is a percentage of the cash value and decreases over time
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.
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
which of the following is not true regarding a non qualified retirement plan
It needs IRS approval
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
Joint Life
Concerning Juvenile Life insurance, which of the following statements is INCORRECT?
Juvenile Life is classified as any life insurance purchased by a minor.
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-insured rider
which of the following is NOT true about a joint and survivor annuity benefit option
Payments stop after the first death among the annuitants.
which of the following is usually true of a participating life insurance policy
Pays dividends to the policy owners.
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Required a premium increase each renewal.
when an insured under a life insurance policy died the designated beneficiary received the face amount of the policy as well as a refund of all the premiums paid. which rider is attached to the policy?
Return of premium
If an agent fails to obtain the applicant's signature on the insurance application, what must the insurer do?
Return the application to the applicant for a signature
During the accumulation period in a nonqualified annuity, what are the tax consequences of a withdrawal?
Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 ½. When money is withdrawn from the annuity during the accumulation phase, the amounts are taxed on a last in first out basis (LIFO). Therefore, all withdrawals will be taxable until the owner's cost basis is reached.
If an insurer becomes insolvent, which of the following would pay benefits to policyholders?
The Guaranty Association
all of the following entities regulate variable life policies except
The Guaranty Association
Which of the following is true regarding variable annuities
The annuitant assumes the risks on investment
which of the following is not true regarding the annuitant
The annuitant cannot be the same person as the annuity owner.
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
The employer is the owner and beneficiary
An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur?
The interest will continue to accumulate tax deferred.
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
which of the following best describes what the annuity period is?
The period of time during which accumulated money is converted into income payments
all of the following are true of key person insurance EXCEPT
The plan is funded by permanent insurance only.
which of the following best describes the owner as it pertains to life settlement contracts
The policyowner of the life insurance policy
in a survivorship life policy, when does the insurer pay the death benefit?
Upon the last death
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called
Waiver of Premium
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
When would life insurance policy proceeds be included in the insured's taxable estate?
When there is an incident of ownership at the time of death
If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
Whether an insurable interest exists between the individuals
Are insurance company underwriters allowed to discriminate?
Yes, but not unfairly
which of the following types of agent authority is also called "perceived authority"
apparent
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
beneficiary
all of the following are personal uses of life insurance except
buy-sell agreement
if an insured changes the premium payment mode from monthly to annually what happens to the total premium
decreases
an insurance company sells an insurance policy over the phone in the response to a TV ad. what best describes this act
direct-response marketing
which if the following methods of calculating the amount of life insurance needed takes into the account the insurers wages, years until retirement and inflation
human life value approach
Life income joint and survivor settlement option guarantees
income for 2 or more recipients until they die
What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account by the beneficiary?
income tax on distributions and no penalty
All advertisements are the responsibility of the
insurer
which of the following is true about the premium on the children's ride in a life insurance policy
it remains the same no matter how many children are added to the policy
i'm the underwriting process it was determined that the applicant for life insurance is in poor health and has some dangerous habits. which of the following is true concerning the policy premium
it will be likely higher because the applicant is a substandard risk
when an applicant purchased a life insurance policy, the agent dated the application four months prior wanna ask by the applicant the agent said Who was allowed to pack their policies up to six months if it would
lower the insured's premium
which of the following premium modes would result in the highest annual cost for an insurance policy
monthly
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
an insured has a continuous premium whole life policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use
paid up option
which type of life insurance policy generates immediate cash values
single premium
a temporary license may be issued for which of the following reasons
the agent is disabled and the disability keeps him from transacting insurance
life settlement brokers or providers are required to give the owner a separate disclosure's document no later than what date
the date of application
when a life insurance policy was issued the policy owner designated a primary and contingent beneficiary. several years later both die in same car accident. don't know who died first. who receives death benefit
the insured contingents beneficiary
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
the insured's premiums will be waived until she is 21.
all of the following are true regarding a decreasing term policy except
the payable premium amount steadily declines throughout the duration of the contract
all of the following are true regarding installments for a fixed amount EXCEPT
the payment will stop when the annuitants die
Which of the following is an example of a producer's fiduciary duty
the trust that a client placed in the producer in regard to handling premiums
which of the following employees insured under a group life plan would be allowed to convert to individual insurance of t the same coverage once the plan is terminated
those who have been insured under the plan for at least 5 years
what is the purpose of establishing the target premium for a universal life purpose
to keep policy in force
when must an insurer send a copy of the Notice to the Commissioner of the producers termination to the producer
within 15 days of the notice
How are contributions to a tax-sheltered annuity treated with regards to taxation?
They are not included as income for the employee, but are taxable upon distribution.
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contract
which of the following is not a goal of risk retention
To minimize the insured's level of liability in the event of loss
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
fixed period
which of the following allows the insurer to relieve a minor insured from the premium payments if the minor's parents have died or become disabled
payor benefit
Notice of information practices must be given to the applicants for an insurance policy at all of the following events except
policy applicants
The insured pays $1,200 annually for her life insurance premium. the unsure applies this years $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. what option does this describe
reduction of premium
Which of the following policies would be classified as a traditional level premium contact
straight life
Children's riders attached to whole life policies are usually issued as what type of insurance?
term