My study stuff
Employer contributions made to a qualified plan
Are subject to vesting requirements
The full premium was submitted to the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
SEC registration
An employee has group life insurance through her employer. After five years, she decides to leave the company and work independently. How can she obtain an individual policy??
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.
Upon policy delivery, the producer may be required to obtain any of the following, except
Signed waiver of premium
Which of the following is a risk classification used by underwriters for life insurance?
Standard
The advantage of qualified plans to employers is
Tax-deductible contributions
Children's riders attached to whole life policies are usually issued as what type of insurance?
Term
A 60 year old participate in a 401(k) plan takes a distribution and rolls over to an IRA within 60 days. Which of the following is true
The amount of the distribution is reduced by the amount of a 20% withholding tax.
All of the following statements about equity, indexed annuities are correct, except
The annuitant receives a fixed amount of return
If a life insurance policy has an irrevocable beneficiary designation,
The beneficiary can only be changed with written permission of the beneficiary
Which is not true about beneficiary designations?
The beneficiary must have insurable interest in the insured.
An applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day, which of the following is true?
The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy.
All of the following statements concerning an employer, sponsored, nonqualified retirement, plan are true, except
The employer can receive a current tax deduction for any contributions made to the plan
An employer quit his job on may 15 and doesn't convert his group life policy to an individual policy for 2 weeks. He does in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer will pay the full death benefit from the group policy to the beneficiary
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 best describes what the annuity period is?
The period of time during which accumulated money is converted into income payments
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be true?
The policy will be interpreted as if the insurer waived its right to have an answer on the application
All of the following are true about variable products, except
The premiums are invested in the insurer's general account.
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated
Those who have been insured under the plan for at least 5 years
Which of the following is the best reason to purchase life insurance rather than an annuity
To create an estate
Why should the producer personally deliver the policy when the first premium has already been paid out?
To help the insured understand all aspects of the contract
Social Security was created to provide all of the following benefits, except
Unemployment income
What kind of policy allows withdrawals or partial surrenders?
Universal Life
Which of the following life insurance policies would be considered interest sensitive
Universal Life
Which type of life insurance policy allows a policy owner to pay more or less than the planned premium?
Universal Life
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent, the initial premium, and no conditional receipt is issued. When will coverage begin?
When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health
A partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called a
Cross purchase plan
What is another name for interest-sensitive whole life insurance?
Current assumption life
All of the following statements concerning dividends are true, except
Dividend amounts are guaranteed in the policy
Which of the following is true regarding taxation of dividends in participating policies
Dividends are not taxable.
Which nonforfeiture option has the highest amount of insurance protection?
Extended term
Which life insurance settlement option guarantees payment for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
Which option for universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
A rider attached to a life insurance policy that provides coverage on the insureds family member is called the
Other-insured rider
Which of the following has a right to convert the existing term coverage to permanent insurance
Policyowner
Which of the following will be included in a policy summary?
Premium amounts and surrender values
A couple owns a life insurance policy with a children's term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
Proof of insurability is not required
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
Purchase a single premium policy for a reduced face amount
What form of the annuity settlement option provides payment to an annuitant for the rest of the annuitants life and Ceases at the annuitant death
Pure life
The Federal Fair Credit Reporting Act
Regulates consumer reports
Which of the following, when attached to a permanent life insurance policy, allows the policy owner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?
Term rider
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?
The Fair Credit Reporting Act The purpose of the Fair Credit Reporting Act is to protect consumers against the circulation of inaccurate or obsolete information and to ensure that consumer reporting agencies are fair and equitable in their treatment of consumers.
All of the following are true regarding the guaranteed insurability rider EXCEPT
This rider is available to all insureds with no additional premium.
Which of the following products require a securities license?
Variable annuity
What limits the amount that a policy owner may borrow from a whole life insurance policy?
cash value
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
convertible term policy
If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is
fully insured
Stranger originated life insurance policies are in direct opposition to the principle of?
insurable interest-because the purchaser of a stranger-oriented life insurance policy doesn't know the insured, ore have any interest in the insured's longevity, STOLI policies violate the principle of insurable interest
If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination?
insurer
The premium of a survivorship life policy compared with that of a joint life policy would be
lower
What is the term for how frequently a policy owner is required to pay the policy premium?
mode is the manner or frequency that the policy owner pays the policy premium
Which of the following is not one of the three types of term coverage based on what happens to the face amount during the policy term
renewable
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
If only one party to an insurance contract has made a legally enforceable promise what kind of contract is it?
unilateral
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 purchased a 15 year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured with severely injured in an auto accident, and after 10 weeks of hospitalization, died from injuries. How much will the beneficiary receive from the policy?
$200,000
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000
The death benefit under the universal life option B
Gradually increases each year by the amount that the cash value increases
All of the following are dividend options, except
Fixed period installments
The Insured is also the policy owner of a whole life policy. What age must be insured attain in order to receive the policy's face amount?
100
Which of the following statements is NOT true concerning insurable interest as it applies to life insurance ?
A debtor has an insurable interest in the life of a lender.
An individual is purchasing a permanent life insurance policy with a face value of 25,000. While this 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 the policy
Guaranteed insurability option
When would a misrepresentation on the insurance application be considered fraud?
If it is intentional and material
When a beneficiary receives payments consisting of both principal and interest portions, which part are taxable as income
Interest only
An insured purchased a life insurance policy. The agent told him that depending upon the companies investments and expense factors, the cash value could change from those shown in the policy at issue time. The policy is a
Interest-sensitive whole life
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 statement is not true regarding a straight life policy?
Its premium steadily decreases over time, in response to its growing cash value.
Which of the following is not a type of whole life insurance?
Level term
If an applicant for a life, insurance policy is found to be a substandard risk, the insurance company is most likely to
Charge a higher premium
Which type of life insurance policy generates immediate cash value?
Single Premium
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
consideration
Level term insurance provides a level death benefit in a level premium during the policy term if the policy renews at the end of a specified period of time, the policy premium will be
Adjusted to the insured's age at the time of renewal
What is the clause that best describes a method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?
Common disaster clause
Representations are written, or oral statements, made by the applicant that are
Considered true to the best of the applicant's knowledge
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?
Monthly premium waiver and monthly income
An insured purchased an insurance policy five years ago. Last year, the insured received a dividend check from the insurance company that was not taxable. This year, the insurer did not send a check. From what type of insurer did the insured purchased a policy?
Mutual
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policies sooner than would have been possible otherwise. What dividend option would she use?
Paid-up option
An insured purchased a life policy in 2010 and died in 2020. The insurance company discovers that at the time that the insured has misstated information about her insurance history on the application. What will the insurer do?
Pay the death benefit
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability. which policy provision allow this?
Reinstatement provision
Under the fair credit reporting act if a consumer challenges the accuracy of information contained in a consumer or investigative report reporting agency must?
Respond to the consumer's complaint.