Primerica exam quizzes study
What is the purpose of key person insurance?
To lessen the risk of financial loss because of the death of a key employee
Which of the following would be least likely to be considered a legitimate need that will be paid by insurance proceeds
Vacation, travel expenses
During the free-look period . The premium for a variable annuity may be invested in all of the following, except.
Value funds. During the 30 day cancellation, free look period ,The premium for a variable annuity may only be invested in a fixed income investments, and money market funds, unless the investor specifically request at the Premium be invested in the mutual funds.
All of the following are personal uses of life insurance, except
buy-sell agreement
The term "fixed" in a fixed annuity refers to all of the following EXCEPT
death benefit. I fixed annuities fix in the sense that it provides a guaranteed minimum rate of interest in income payments. They do not very from one to the next the company also guarantees specify, dollar amount for each payment, and the length of the payout. Annuities do not provide a death benefit.
What kind of policy does not typically require proof of insurability?
group insurance
Which of the following is the most common way to transfer risk?
purchase insurance
Which of the following is not an example of a business use of life insurance?
workers compensation
Employer contributions made to a qualified plan
Are subject to vesting requirements
What is the purpose of settlement options?
They determine how death proceeds will be paid
Any person who engages in any unfair method of competition or deceptive act, is liable to the state for a civil penalty and find a $5000 for each act in addition, if it is determined that the act is willful define will not exceed
$10,000 as dictated by CIC 790. 035. The penalty for engaging is unfair. Trade practices is $5000 for each act. In addition if it is determined that the violation was willful the penalty she'll be $10,000 for each act.
An individual purchased a $100,000 joint life policy on himself and his wife. Eight years later he died in an automobile accident. How much will his wife receive from the policy?
$100,000
An insured purchase a 15 year level term life insurance policy with the face amount of $100,000 the policy contained an accidental death rider offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization died from the injuries. How much will the beneficiary receive from the policy?
$200,000 the beneficiary will most likely receive twice the face value of the policy since the insured's fatal injuries were caused by an accident, and he died within the 90 day benefit limit stipulated in most policies
An insured owns a life insurance policy to be able to pay some of her medical bills. She withdraws a portion of the policies cash value. There is a limit for withdrawal, and the insurer charges a fee. What type of policy does the insured most likely have?
(Universal life) policies allow for policyholder to withdraw a limited portion of the policies. Cash value. Each withdrawal, however, is usually charged, and the amount and frequency of withdrawals are usually limited.
Every individual life insurance policy must provide for a free look provision that lost her at least
10 days. Insurance must allow individual life insurance customer the ability to return the new policy within 10 to 30 days this time. It's up to the insurer for a full refund.
The policy owner canceled his life policy, but instructor insurance company to transfer the cash value of his policy to an annuity. This nontaxable transaction is called.
1035 exchange
The validity of a 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
What is a limiting age for dependent children of the insured employee in a group life plan other than disabled children
26
What is the timeframe that an agent or broker has provide information on file for lines other than Worker's Compensation?
30 days
What is the penalty for IRA distributions that are below the required minimum for a year
50%
Is part of the continuing education requirement what is the minimum number of hours of continuing education specific to long-term care insurance to be completed prior to each license renewal?
8. For licensees issued a license after January 1, 1990 to eight hours of continuing education specific to long-term care insurance are required for each license period
De-mutualization happens when
A mutual insurer becomes a stock company
What is a material misrepresentation?
A statement by the applicant that upon discovery, what affect the underwriting decision of the insurance company.
Insurance policies are not drawn up through negotiations and an insured has little to see about it's provisions. What contract characteristic does this describe?
Adhesion
When an annuity is written, who's life expectancy is taken into account
Annuitant
An applicant buys a nonqualified annuity, but dies before the starting date. for which of the following beneficiaries what is the interest accumulated in the annuity not be taxable?
B. Spouse. If an annuities contract holder dies before the effective starting date, the contracts interest continues to be taxable. Unless the beneficiary is a spouse. In that case this tax can be deferred.
Which of the following is not true regarding an annuity certain
Benefits stop at the annuitant's death.
What license or licenses are required to sell variable annuities
Both a life insurance license, and a securities license
And insured receives an annual life insurance dividend check what term best describes this arrangement
Cash option
Which of the following elements in an indexed universal life policy is tied to an index
Cash values
The insure neglects to pay a legitimate claim that is covered under the terms of the policy, which of the following insurance principles has the insurer violated
Consideration
Which of the following reports will provide the underwriter with the information about an insurance applicant credit
Consumer report
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated
Which of the following is not typically excluded from life policies
Death due to plane crash for a fare-paying passenger
Which of the following is not an example of a valid insurable interest?
Debtor in the life of the creditor
Twin brothers applied for life insurance from company a the company found that while neither of them smoked and both are very similar lifestyle one of the twins wasn't much stronger financial position in the other because of this, the company charge him a higher rate for his insurance, this practice is considered
Discrimination
Which of the following would not fall into the category of cost associated with death?
Expensive a vacation for surviving family members
The legal definition of a "person "would not include which of the following
Family
An insured has the right to return the new insurance policy for a full refund during the
Free-look period
In the state of California who selects the insurance commissioner and for how long?
General election, for no more than two four-year terms
If a life policy allows the policy owner to make a periodic addition to the face amount at standard rates without providing insurability the policy includes a
Guaranteed insurability rider. Allows the policy owner to purchase specific amounts of additional insurance at specific dates or events without proving continued insurability rates for the additions are based upon attained age.
Insured becomes disabled at age 22 and can no longer work. She reads the definition of total disability under Social Security. What are the requirements must a insured has meant to receive Social Security disability benefits.
Have accumulated six work credits in the past three years
In California a person applying for an insurance license is considered to have been convicted of a misdemeanor or felony. The person entered all of the following pleas except
Innocent
What are the two components of a universal policy
Insurance and cash account
Martha claims to have injured her back at work. She told the doctor that she cannot bend Lyft, or even sit comfortably without great pain. FaceTime Martha statements, Dr. certifies her disability, and she begins to receive disability benefits from the insurer if it can be shown that Martha did not suffer the injury she has claimed her that she's not suffering the effects she's claiming she will be charged with.
Insurance fraud
Under California law and insurance solicitor is a natural person employed to aid a(n)
Insurance, agent or broker
Which of the following insured have a right to cancel an individual life policy for a full refund within 30 days of policy delivery
Insureds who are 60 years of age or older
The policy owner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age which settlement option should the policy owner choose
Interest only option, the insurance company, retains the policy proceeds and pays interest on the proceeds to the recipient beneficiary at regular intervals
Which of the following is not true regarding the life with a guaranteed minimum annuity settlement option
It does not guarantee that the entire principal amount will be paid out.
Concerning juvenile life insurance, which of the following statements is incorrect
Juvenile Life is classified as any life insurance purchased by a minor. It does not need to be purchased by a minor.
I said of legal and regulatory conditions that affect insures ability to collect premiums commensurate with the level of risk encourage would be considered
Legal hazard
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Limited Pay Life. The premiums for coverage will be completely paid up while before age 100 usually after specify number of years.
Which of the following writers added to a life insurance policy can pay part of the death benefit to the insured to cover expenses incurred in a nursing or convalescent home
Long-term care
An applicant who receives a preferred risk classification qualifies for
Lower premiums than a person who receives a standard risk.
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Paid-up additions
A participating insurance policy may do which of the following
Pay dividends to the policyowner
Which of the following allows the insurer to relieve a minor insured from premium payments if the minors parents have diet or become disabled?
Pay or benefit
Which of the following is not true about a joint and survivor annuity benefit option
Payments stop after the first death among the annuitants.
The causes of loss insured against in an insurance policy or known as
Perils
When may a representation be withdrawn?
Prior to the issuance of the policy
Profitable distribution of exposure serves a purpose of
Protecting the insurer against adverse selection
A situation in which a person can only loser have no change represents
Pure risk
In the event of a loss business overhead insurance will pay for
Rent Business overhead insurance is designed to pay the ongoing business expenses of a small business owner while the are disabled and unable to work. It does not pay the salary of the business owner or their loss of profits. However, it will provide the funds needed to pay the salary of employees other than the owners and their ongoing business expenses, such as rent.
Upon policy delivery, the producer may be required to obtain any of the following, except
Signed waiver of premium
Hazard is best defined as
Something that increases the risk of loss
The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the
Spendthrift Clause
Peril is most easily defined as
The cause of loss insured against
Excluding life insurance under what condition me a policy owner transfer their personal insurance policy to another person
The insured will need the written consent of the insurer
A father owns a life insurance policy on his 15-year-old daughter the policy contains optional, pay or benefit rider. If the father becomes disabled, what will happen to the life insurance premiums
The insured's premiums will be waived until she's 21
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 is true regarding a market value adjusted annuity
The owner is guaranteed a fixed interest rate for a specific period of time.
And insured stops making payments on a loan, taken from his cash value policy what will most likely happen ?
The policy will terminate when the loan amount with interest equals, or exceeds the cash value
Which of the following is true regarding an indeterminate premium whole life policy
The premium can be raised up to a guaranteed maximum rate.