PA Life Insurance License Exam
greg has recently been terminated from his job that covered group life insurance. how long will he has to get an individual policy
31 days
Erica is 35 years old and owns an IRA. At what age can she begin to receive distributions without a tax penalty?
59 1/2
Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application?
A good health statement
A Modified Endowment Contract (MEC) is best described as
A life insurance contract which accumulates cash values higher than the IRS will allow
How does life insurance create an immediate estate?
After first premium is paid, the face amount may be available to the beneficiary
which of the following is not part of an insurance contract
Certificate Authority
The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? Certificate of Authority Consumer report Coverage document Certificate of coverage and benefits
Certificate of coverage and benefits
Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this?
Child term rider
Rob has a benefit at work which enables him to defer his current receipt of income and have it paid at a later date, when he will probably be in a lower tax bracket. Which benefit fits this description? Key person IRA Period certain annuity Deferred compensation option Income deferral option
Deferred compensation option
Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this? Modified Endowment Contract Current assumptive whole life Credit life insurance Equity index whole life
Equity index whole life
Which of these annuities require premium payments that vary from year to year?
Flexible premium deferred annuity
which of the following protects a policy owner from a misrepresentation caused by an innocent mistake
Incontestable Clause
A resident produces license requires each of the following EXCEPT
Insurers appointment
During the accumulation period, who can surrender an annuity?
Policyowner
Under a Modified Endowment Contract, what are the likely tax consequences?
Pre-death distributions will become taxable
Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement?
Premiums paid plus interest earned is returned to the beneficiary
which of the following is a reinstatement condition
Proof of insurabiilty
A policy owner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due
Reduction of Premium Dividend Option
An annuitant dies during the distribution period. What kind of annuity will return to a beneficiary the difference between the annuity value and the income payments already made?
Refund annuity
Any of the following may be an unfair claims practice EXCEPT
Refusing to pay persons bringing false or fraudulent claims
which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence
Section 1035 exchange
which of the following are the premium payments for a universal life policy not used for
Separate account investments
A little insurance producer licensed in the commonwealth of PA is authorized to
Solicit, Receive and forward applications to insurers
An insurer's claim settlement practices are regulated by the
State insurance departments
The type of multiple protection coverage that pays on the death of the last person is called a(n) joint life policy survivorship life policy annuity joint policy dual life policy
Survivorship life policy
which of the following employers is required to follow ERISA regulation
a local electrical supply company with 12 employees
which if the following is not considered advertising
a rating from a rating service company like A.M Best
All of these are common exclusions to a life insurance policy EXCEPT
accidental death
kathy's annuity is currently experiencing tax deferred growth until she retires. which phase is this annuity in
accumulation period
The deeds and actions of a producer indicate what kind of authority?
apparent
all of these typically sources of underwriting information for life or health insurance EXCEPT
disclosure authorization response
when solidity insurance producer cannot
emphasis guaranty association benefits
one role of the commissioner is to
enforce state insured laws
Which contract element is insurable interest a component of?
legal purpose
a limited payment whole life policy provides
lifetime protection
An insurer's ability to make unpredictable payouts to policyowners is called
liquidity
the premium for a modified whole life policy is
lower than the typical whole life policy during the first few years and then higher than typical for the remainder
all of these considered key factors underwriting life insurance EXCEPT
marital status
which situation accurately describes a reduced paid-up. non forfeiture options
policy has a decreased face amount
what is required before an insurance producer can act as a representative for an insurer
producer needs to be appointed by that insurer
In PA an insurance producer license can be denied for failure to pay each of the following EXCEPT
property tax
all of the following are considered to be appropriate uses of life insurance for business purposes EXCEPT
protecting the business by covering entry level employees with life insurance
an insurance producer is often responsible for field underwriting during the application process. all of these are possible field underwriting roles EXCEPT
providing commission information to the applicant
The free-look provision gives the policyowner
the right to return the policy for a full refund within a specified number of days
under a contract of adhesion,
the terms must be accepted or replaced in full
Insurance represents the process of risk
transference
an insurance company only pay commissions to
unlicensed producer
agreements made by terminally if persons to self life insurance policies at a discount in order to pay medical expenses are called
vatical settlements
PA law requires that an insurer must notify the commissioner of a producer application termination
within 30 days of termination
An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? Incontestable period Probation period Reinstatement period Grace period
Grace period The grace period is the amount of time an insurer continues coverage in full force and will accept the premium from the insured as though it was NOT late.
Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?
Guaranteed lifetime withdrawal benefit
which settlement option involves having the proceeds remain with the insurer and earning paid on a monthly basis to the beneficiary
Interest Only
An applicant's character and personal habits can be obtained for underwriting purposes from which source?
Investigative consumer report
a life insurance policy written on one contract for 2 people in which its is payable upon the first death is
joint
A guaranteed issue insurance policy has no initial premium requirement incontestable period waiting period medical underwriting
medical underwriting
first two years of life insurance policy is the force, insurer can contest a policy for all EXCEPT
misstatement of age in the application
a life insurance claim which involves a per capita distribution of policy proceeds would be payable to the
named living primary
Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies?
Payor benefit
Shirley has a $500,000 10-year non-renewable level term life policy. If she dies 15 years after the policy's inception date, how much will her beneficiary receive?
nothing
which of the following is an example of a producers fiduciary duty
recording receipt and remittance of premiums due to the insurance company
which is a primary feature of a vatical settlement
reduced death benefit prepayment
What is the automatic continuance of insurance coverage referred to act
renewal
all of the following are exempt from the 10% tax penalty for early qualified plan withdrawal except
stock purchase
which of these will have the highest monthly payout upon annuitilization
straight life
maria the producer would like to advertise an annuity product on a highway billboard. what should be included in the advertisement
the annuity's guaranteed interest rate
a life insurance illustration showing future premiums being paid out if non guaranteed values must disclose that
the policy owner may need to resume premium payment is depending on actual results
If the annuitant dies before the annuity start date,
the premiums paid plus interest earned will be given to the beneficiary
A producer's license CANNOT be revoked without
a hearing given to the producer
PA requires that a license complete ———- hours of continuing education on the ethics every reporting period
3
Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? $400 $800 $2,000 $4,000
$4,000
an immediate annuity has been purchased with a single premium. when does the annuitant typically begin receiving benefit payments?
1 month
an accelerated death benefit in PA must be at least what percent of the total death benefit
25%
when calculating the amount of life insurance needed for an income earner, what has to be determined when using the needs approach
The family's financial objectives if the income earner were to die or become disabled
what is a corridor in relation to a universal life insurance policy
The gap between the total death benefit and the policy's cash value
when an insurance company consistently fails to provide reasonable explanations for the denial of a claim, this is called
Unfair Settlement
A partial surrender is allowed in which of the following life policies?
Universal Life
according to life insurance contract law, insurable interest exists
at the time of application
which of these factors is not taken into account when determining an applicants life insurance needs
automobile
which of the filling factors help determine an insured life insurance policy
avocation(hobby)
in order to solicit insurance in PA, all of the following is required EXCEPT
be atleast 21 years of age
in PA what is not something a license must do to renew their insurance license
confirm previous exam scores
In order for a contract to be valid, it must
contain an offer and acceptance
——- is not an element of valid contract
countersignature
all of the following are examples of business continuation plan EXCEPT
deferred compensation
all of these are standard exclusions found in a life insurance policy EXCEPT
disability
a life insurance policy owner was injured in an automobile accident which resulted in a total and permanent disability. which rider would pay a monthly amount because of his disability
disability income rider
Under a non-qualified annuity, interest is taxed after the
exclusion ratio has been calculated
a producer is meeting with a client to determine whether an annuity would be suitable for purchase. what topics should be discussed with client
financial objective
when collecting insurance premiums from a client, a producer must
forward premiums to the insurer on a timely basis
An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of rebating coercion fraud twisting
fraud
Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period?
Decreasing term insurance
a policy owner can change two policy features on what life insurance
adjustable life
An error was made on Mary's life insurance application. Which of the following areas are errors commonly made on applications for which the incontestable clause does NOT apply? Marital status Age Address Income
age
an insurer formed according to the legal requirements of another country is considered
alien insurer
Which annuity payout option allows the policyowner to choose a pre-determined number of benefit payments?
amount certain
