Primerica Exams
A stock insurer is defined as an insurer
owned by its stockholders
If an individual willfully violates provisions of the Fair Credit Reporting Act, what is the maximum civil penalty?
$2,500
No foreign insurer is authorized to transact insurance in Wyoming, unless that insurer has been issuingits own policies, in its state of domicile. for at least
2 years
An agency intends to adopt substantive rule changes. In order for a hearing regarding this change to take place, how many individuals must request it?
25
Within how many years is an insured able to reinstate his or her annuity contract after defaulting on payments, provided the cash surrender value has not been paid?
3 years
When a licensed insurance producer places insurance business with an insurer that has not appointed the producer, he/she is deemed to be acting as
A broker
Which of the following is NOT required in every individual policy or group certificate of credit life insurance?
A list of included provisions on the first page
What guarantees that the information explained in the insurance contract is true?
A warranty
To purchase insurance, the policyowner must face the possibility of losing money or something of value in the event of loss. What is this concept called?
Insurable interest
A life insurance policy has a legal purpose if both of which of the following elements exist?
Insurable interest and consent
Who are members of the Wyoming Insurance Guaranty Association?
Insurance companies licensed to do business in Wyoming
The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called the
Insuring clause
Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured and to whom the benefits will be paid?
Insuring clause
The interest earned on policy dividends is
Taxable
Which of the following is required to be included in each individual policy or group certificate of credit life insurance?
The insurer's name and home office address
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
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination
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
All of the following statements about indexed whole life insurance are correct EXCEPT
The policy face amount remains level throughout the life of the policy
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive
Which of the following is true regarding taxation of accelerated benefits under a life insurance policy?
They are tax free to terminally ill insured
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?
Extended term
In contrasting stock insurers with mutual insurers, which statement is true?
Stock insurers are owned by the shareholders and issue nonparticipating policies
The renewable provision allows the policyowner to renew the coverage at the expiration date
Without evidence of insurability
According to the law of agency, insurance producers represent
insurers
Cash value guarantees in a whole life policy are called
nonforfeiture values
Contributions to Roth IRAs are
not tax deductible
How much will a producer be fined for each Violation of a final order from the Commissioner?
$5,000
An annuity has accumulated the cash value of $70,000, of which $30,000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive
$70,000
How long is a reinstatement period for variable life policies?
1 year
The Commissioner would like to revoke a consultant's license. How many days written notice must she provide to the consultant?
10
The Commissioner issued a cease and desist order. The person affected by this order would like to request a hearing. How long does he have to make this request?
10 days
In a noncontributory group policy
100% of eligible employees must participate
In order to transact insurance in Wyoming, foreign insurer must have issued policies in its state of domicile for at least
2 years
How many continuing education credit hours must be completed each reporting period?
24
An insurer must notify the commissioner in writing that an investigative consumer report has been requested, within how many days of the initial request?
3 days
An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?
3 days
How many hours of continuing education must be dedicated to ethics?
3 hours
When replacement is involved, how long must an insurer maintain copies of all sales proposals used in the transaction?
3 years
If an insurer wishes to cancel or not renew an appointment, they must notify the producer and Commissioner within
30 days
If an insurer wishes to cancel or not renew an appointment, they must notify the producer and commissioner within
30 days
During policy replacement, the replacing insurer must notify existing insurers within what time period?
5 business days
*Policy loan requests, except for loan requests for payment of due premiums, may be deferred for a period of up to
6 months
Fow how long is an insurance company allowed to defer policy loan requests
6 months
Policy loans requests, except for loan requests for payment of due premiums, may be deferred for a period of up to
6 months
A distribution from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvested in an IRA within
60 days
A life insurance policy qualifies as a Modified Endowment Contract (MEC) if the amount of premium paid exceeds the amount that would have provided paid-up insurance in how many years?
7 years
Fraternal benefit societies must meet social requirements before they are permitted to transact insurance. Which of the following is NOT among these requirements?
A bond of $100,000
The entire contract includes all of the following EXCEPT
A buyer's guide
Which of the following best describes a rebate?
A producer returning part of her commission to her client, as an inducement to buy
Which of the following is a requirement in variable contracts delivered in this state?
A statement that the dollar amount will vary with investment experience
Sticky, you are stuck with the application
Adhesion
Who acts on behalf of the principal?
Agent
Which of the following would NOT be a violation of state insurance regulations?
Agent C uses her license to write only business other than controlled
An exchange of unequal values, the premium is smaller than the death benefit
Aleatory
Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy?
An accidental death rider
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
The death protection component of Universal Life Insurance is always
Annually Renewable Term
Which of the following indicates the person upon whose life the annuity income amount is determined?
Annuitant
Which provision may be added to a permanent life policy, at no cost, that insures that the policy will not lapse so long as there is cash value?
Automatic premium loan option
Which of the following would NOT trigger the payment of Accelerated Death Benefits?
Being permanently disabled
Which of the following is NOT an indicator of a competent party?
Business profession
An IRA contribution can be made from which of the following?
Cash
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
Certain conditions must be met
Conditional
Which of the following would be considered an illegal inducement to purchase insurance?
Confirming future dividends in a life insurance proposal
An exchange of something of value, the insured pays the premium the insurer pays the death benefit
Consideration
An insurer 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
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
Which of the following elements of an insurance contract requires payment of premium?
Consideration
A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will
Continue to increase
Which of the following statements is true regarding SIMPLE plans?
Contributions and earnings are tax-deferred until funds are withdrawn
An insurance producer just sold an insurance policy to his sister. What kind of business is this?
Controlled
When an individual obtains an insurance license for the primary purpose of writing insurance on him or herself, or for members of his or her immediate family or business, this is called
Controlled business
An employee dies having 6 quarters of coverage during the previous 13-quarter period. What status of coverage does the employee have under Social Security?
Currently insured
An individual has just borrowed $10.000 from his bank on a 5-year investment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing term
During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of
Defamation
All of the following could be considered rebates if offered to an insurance in the sale of insurance EXCEPT
Dividends from a mutual insurer
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
Dividends from a mutual insurer
An adjustable life policy can assume the form of
Either term insurance or permanent insurance
When life insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as
Estate conservation
How often must an insurer issuing individual variable contracts providing benefits in variable amounts mail a statement reporting the investments held in the separate account to the contract holder?
Every year
Which of the following would NOT be eligible for group life insurance?
Family groups
J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?
Fixed amount
Which of the following is a correct statement about annuities?
Fixed annuities do not provide protection against inflation
Which is TRUE about the cash surrender nonforfeiture option?
Funds exceeding the premium paid are taxable as ordinary income
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
Have attained fully insured status
Fixed annuities provide all of the following EXCEPT
Hedge against inflation
Under which of the following conditions would life insurance proceeds be taxable by the federal government?
If there is a transfer for value
If a loan request is for payment of due premiums on the policy, how soon must the insurer issue a loan?
Immediately
All of the following are excluded from the rules of replacement EXCEPT
Individual whole life policies
Who would be allowed catch-up contributions?
Individuals age 50 or older
All of the following are examples of violations of replacement EXCEPT
Insisting that an applicant answer questions honestly
All of the following are examples violations of replacement EXCEPT
Insisting that an applicant answers questions honestly
Death benefits must be paid within 45 days of receipt of proof of loss and must include
Interest accrued from the date of death until date of payment
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
All of the following statements are true regarding an Ordinary (Straight) Life policy EXCEPT
It does not have a guaranteed death benefit
How does insurance distribute the financial consequences of individual losses?
It transfers the risk to all persons insured
Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select?
Joint and Survivor
For a contract to be enforceable by law, the purpose of the contract must be
Legal and not against public policy
An annuitant pays the annuity premium on the 14th of each month. Which of the following best describes this arrangement?
Level
Which of the following is a licensing requirement for producers soliciting variable contracts in this state?
License to transact variable life insurance
Which of the following terms describes individuals authorized by the Commissioner to transact limited lines insurance?
Limited lines producers
Which of the following is guaranteed under a variable whole life insurance policy?
Maximum death benefit
An example of an alien insurer doing business in this state is one formed under the laws of
Mexico
Guaranteeing future dividends is considered to be an unfair or deceptive act known as
Misrepresentation
An insurance company that is owned by the policyholders is called a
Mutual insurer
In the evnt an annuitant dies during the accumulation period, and there is a beneficiary named in the annuity, annuity benefits would be paid to the
Named beneficiary
Replacement rules do not apply in all of the following situations EXCEPT
Non of the above. Replacement rules do not apply in any of the above situations.
cash value guarantees in a whole life policy are called
Nonforfeiture values
All of the following would be considered an insurance transaction EXCEPT
Obtaining an insurance license
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
When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?
Paid-up additions
Which dividend option will increase the death benefit?
Paid-up additions
Key person insurance can provide protection for all of the following economic losses to a business EXCEPT
Pay the death benefit to the estate of the insured
Which of the following is consideration on the part of an insurer?
Paying a claim
A married couple purchase a life insurance policy on their newborn baby. They are concerned about what will happen to the policy if either one of them were unable to continue making the premium payments due to death or disability. Which policy riders should their agent recommend?
Payor benefit
A married couple purchase a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either one of them were unable to continue making the premium payments due to death or disability. Which policy rider should their agent recommend?
Payor benefit
An Equity Indexed Annuity will grow based upon
Performance of a recognized index
All of the following statements about mutual insurance companies are correct EXCEPT
Policy dividends issued by mutual companies are guaranteed and not taxable
What is the difference between a straight life policy and a 20-pay whole life policy?
Premium payment period
Another name for a substandard risk classification is
Rated
What does the application of contract of adhesion mean?
Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured
Which of the following statements regarding HIV testing is NOT true?
Test results must be sent to the Department of Insurance
Variable life insurance is regulated by all of the following entities EXCEPT
The U.S. Department of Treasury
Who is required to pay the fee for an insurance agent's appointment?
The appointing insurer
With Adjustable Life, the owner can change all of the following EXCEPT
The insured
Which of the following bears the investment risk in a variable life policy?
The policyowner
All of the following are true of the Survivorship Life Policy EXCEPT
The premium is based on the age of each insured
All of the following are requirements for life insurance illustrations EXCEPT
They must be part of the contract
An application for life insurance usually requires the agent to ask if the proposed insurance will replace an existing life insurance policy. All of the following are purposes for obtaining this information EXCEPT
To ensure that at least three companies are involved so the policyowner gets competitive prices.
What is the justification for the existence of the State Insurance department?
To protect the public
Which of the following is NOT a responsibility of the replacing insurer in life insurance policy replacement?
To read the notice regarding replacement to the applicant
An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as
Twisting
A one sided promise, the insurance companies promise to pay the death benefit
Unilateral
Considering the principles of liquidity, how would the policyowner use today's cash values in a life insurance policy?
Use it for emergency expenses
Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?
Variable whole life
All of the following benefits are available under Social Security EXCEPT
Welfare benefits
An insured has a life policy in the amount of $250,000 naming his wife as the beneficiary. Upon his death, his beneficiary decides not to receive the death benefit for some time. When she finally receives the death benefit check, it's in the amount of $250,530. Is any portion of the proceeds that the beneficiary receives taxable?
Yes, proceeds in excess of face amount are taxable as interest
An insurance company is declared insolvent on May 1. A policyholder is in an accident on May 15 and files a claim on May 20. Will this accident be covered?
Yes; the claim was made within the 30-day period after the company was declared insolvent
An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?
A portion of the benefit up to a limit is tax free; the rest is taxable income
Within how many days must the Commissioner approve or disapprove policy forms for all policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders?
30
How many days' notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans?
30 days
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
The highest percentage of "controlled business" that a licensed agent is allowed to write is
50% of their annual aggregate premium
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate
Which of the following is TRUE regarding the annuity period?
It may last for the lifetime of the annuitant
Which of the following statements about the reinstatement provision is true?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated
A credit life policy was terminated before the maturity date of the indebtedness. what will most likely happen with the amount paid by the debtor for the insurance?
It will be refunded to an entitled party
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
Level Term
Which two terms are associated directly with the premium?
Level or flexible
Policies written on a third-party ownership basis are usually written to cover which of the following?
Policyowner's minor children or business associates
What is the term for the entity that an agent represents regarding contractual agreements with third parties?
Principal
Which type of insurance is based on mutual agreements among subscribers?
Reciprocal insurance
A producer in another state wants to become a producer in Wyoming. The other state gives the same privileges to Wyoming producers wanting to be licensed in that state as it does its own producers. Wyoming therefore extends the privileges of its producers to the prospective producer of the other state. What is this called?
Reciprocity
A transaction where new life insurance is purchased, and as part of the transaction, existing life insurance is lapsed or surrendered, is known as
Replacement
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
Settlement option
All of the following would be different between qualified and nonqualified retirement plans EXCEPT
Taxation on accumulation
When term insurance is added to the main policy to enhance the policy or provide added benefit or coverage, it is called a
Term rider
Which of the following statements concerning the Medical Information Bureau is correct?
The Medical Information Bureau assists underwriters in evaluating and classifying risks.
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner
The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option in this case?
The beneficiary
All of the following are consideration in an insurance policy EXCEPT
The cash value in the policy
Which of the following is TRUE regarding the insurance amount in a credit life policy
The creditor can only insure the debtor for the amount owed
All of the following are true about Group Life Insurance EXCEPT
The employer is the beneficiary
All of the following are advantages of a qualified retirement plan EXCEPT
The income at retirement is tax free
The insurer of a credit life policy requires evidence of insurability from the debtor. The debtor becomes obligated to the creditor on March 1st, and the evidence of insurability is provided to the insurer on March 30th. When will the term of insurance begin?
Whenever the insurer finds the evidence of insurability satisfactory
An insurance company is declared insolvent on May 1. A policyholder is in an accident on May 15th and files a claim on May 20. Will this accident be covered?
Yes; the claim was made within the 30-day period after the company was declared insolvent
