practice questions to go over!
The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount?
100
the Superintendent will not renew an agent or broker's license upon finding that the license has been used to write controlled business. Which of the following would be a violation of controlled business practices?
15% of the agent's annual commission is from business sold to the agent's family.
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
The Superintendent can examine an authorized fraternal benefit society and property/casualty insurance company once every
3 years
in order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?
5
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by
A paramedic or examining physician at the insurer's expense.
Which of the following individuals must pass a written examination to be licensed as a life insurance agent?
A resident of New York wishing to transact business in New York
Which of the following is NOT true of Section 1035 Policy Exchanges?
Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days.
When must agents submit license renewal applications to the Superintendent?
At least 60 days before the license expires
Which of the following is a feature of a variable annuity
Benefit payment amounts are not guaranteed.
hich is TRUE about the cash surrender nonforfeiture option?
Funds exceeding the premium paid are taxable as ordinary income.
A Universal Life insurance policy has two types of interest rates that are called
Guaranteed and Current.
Events or conditions that increase the chances of an insured loss occurring are referred to as
Hazards
The Medical Information Bureau (MIB) was created to protect
Insurance companies from adverse selection by high risk persons.
Which of the following best describes the MIB?
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
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.
In which of the following situations is it legal to limit coverage based on marital status?
It is never legal to limit coverage based on marital status.
Which of the following is true regarding a single life settlement option?
It provides income the beneficiary cannot outlive.
An applicant wants to buy a policy that has a cash value element. Which type should she buy?
Permanent
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association.
A 60-year-old participant in a 401(k) plan takes a distribution and rolls it 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.
In order to qualify for a certificate of authority, every person, firm, association, corporation or joint-stock company must meet all of the following requirements EXCEPT
The entity must be part of the New York Labor Union.
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?
The insured may choose to convert to term or permanent individual coverage.
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies 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.
If an insured continually uses the automatic premium loan option to pay the policy premium,
The policy will terminate when the cash value is reduced to nothing.
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal life
All of the following statements about equity index annuities are correct EXCEPT
When an insurer's underwriter approves coverage
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
The main difference between immediate and deferred annuities is
When the income payments begin.
Which concept is associated with "exclusion ratio"?
annuity payments
Partners in a 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 insurance
Which of the following types of agent authority is also called "perceived authority"?
apparent
When an insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting information?
application
which of the following is the basic source of information used by the company in the risk selection process?
application
Which of the following is INCORRECT regarding a $100,000 20-year level term policy?
at the end of 20 years the policys cv will = 100,000
What is the time period called during which the surviving spouse of the insured does not receive Social Security income benefits?
blackout period
All of the following are personal uses of life insurance EXCEPT
buy sell agreement
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
What does "level" refer to in level term insurance?
face amt
Annually renewable term policies provide a level death benefit for a premium that
increases anually
What are the two components of a universal policy?
insurance and cash account
All advertisements are the responsibility of the
insurer
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT
it is a life contingency option
An employee is joining a group insurance plan. In order to avoid having to prove insurability, what must the employee do?
join during the open enrollment period
Which of the following is NOT a type of whole life insurance?
level term
The form used to establish the terms for both parties when a person sells his life insurance policy to a 3rd unrelated person is called a
life settlement contract
In a single employer group plan, what is the name of the policy issued to the employer?
master contract
Attempting to determine how much insurance a family would require based upon their financial objectives is known as
needs approach
Which of the following documents must be provided to the policyowner or applicant during policy replacement?
notice regarding replacement
In term policies, what happens to the premium throughout the term of the policy?
premium always remains level
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
Which nonforfeiture option provides coverage for the longest period of time?
reduced paid up
The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?
reduction of premium
Statements made by an applicant for a life insurance policy which are true to the best of one's knowledge are referred to as
representations
Which of the following, when attached to a permanent life insurance policy, allows the policyowner 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
A spouse was granted a temporary license for her deceased husband's agency on March 1. On May 1 she processed an application for life insurance on a new applicant. Which of the following is true?
the app was processed without a valid license
Who bears all of the investment risk in a fixed annuity?
the insurance company
In a life settlement contract, who does the life settlement broker represent?
the owner
All of the following are true of an annuity owner EXCEPT
the owner must be the party to receive benefits
Whose responsibility is it to make certain that an application for insurance is filled out completely and correctly?
the producer
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
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
universal life