Primerica!!!

What do individuals use to transfer their risk of loss to a larger group?

Insurance

Which provision of a life insurance policy states the insurers duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring clause

All of the following are nonforfeiture options EXCEPT

Interest only

What percentage of a company's employees must take part in a noncontributory group life plan?

100%

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

Foreign

Which of the following is TRUE of a qualified plan?

It has a tax benefit for both employer and employee

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 of the following best describes the MIB?

It's a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

Joint and survivor

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

Which of the following has the right to convert the existing term coverage to permanent insurance?

Policyowner

In which of the following instances would the premium be tax deductible?

Premiums paid by an employer on a $30,000 group term life insurance plan for employees

Which of the following statements about a suicide clause in a life insurance policy is true?

Suicide is excluded for a specific period of years and covered thereafter

Which of the following information will be stated in the consideration clause of a life insurance policy?

The amount of premium payment

Which of the following is NOT true regarding the annuitant?

The annuitant cannot be the same person as the annuity owner

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract

The policy owner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as

The policy contains sufficient cash value to cover the cost of insurance

Which is true about a spouse term rider?

The rider is usually level term insurance

Which of the following is true about nonforfeiture values?

They are required by state law to be included in the policy

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?

Unilateral

A policy owner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision ?

Automatic premium loan

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

Conditional

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

For 20 years or until death, whichever occurs first

Two attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose

HR-10 (Keogh Plan)

An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?

If the primary beneficiary predeceases the insured

Which of the following policy components contains the company's promise to pay?

Insuring clause

If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?

It is only taxable if the cash value exceeds the amount paid for premiums

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation

An insured has a continious premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she used?

Paid-up option

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

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

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

You know that your client is currently insured under a life policy, but you are making a sale presentation to that client for a new life policy. You must provide the client with the important notice regarding the replacement of life insurance and a copy of the sale proposal under all of the following situations EXCEPT

The client is converting from an existing term policy to whole life

A 40-year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarries and dies at age 61, leaving 2 grown-up children. Assuming he never changed the beneficiary, the policy proceeds will go to

The insureds estate.

All of the following are true regarding a decreasing term policy except

The payable premium amount steadily declines throughout the duration of the contract

Once a complaint has been filed with the Commissioner regarding an unfair claims practice, the Commissioner

Within 10 business days will send a copy of the complaint to the company involved

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

If the commissioner issues a cease and desist order, but the producer continues the same activities, the producer can face a fine up to which of the following amounts per violation?

$50,000

The insured is also the policy owner of whole life policy. What age must the insured attain in order to receive the policy's face amount?

100

The Commissioner must be notified in all of the following circumstances EXCEPT

A change of the producers business phone number

A temporary license may be obtained for all of the following situations EXCEPT

A producers retirement

In order to get a non-resident license in this state, producers must

Apply and pay a fee to a non-resident state that reciprocates

Which of the following are life or health insurance companies allowed to do under Rule 39, which regulates the use of AIDS and HIV queries and information?

Ask questions that relate to whether the applicant has been diagnosed with AIDS or HIV

If a complaint has been filed against a producer who has been implicated in an unfair trade practice, the commissioner will hold a hearing. When must the producer be notified of the charges?

At least 5 days prior to hearing

All admitted insurance companies in Indiana are subject to fiscal examinations by the Commissioner

At least every five years

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

Common Disaster clause

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

In a direct rollover, how is the money transferred from one plan to the new one?

From trustee to trustee

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider

Annually renewable term policies provide a level death benefit for a premium that

Increases annually

Which of the following types of licenses is most suitable for an individual or corporation who, for a fee, offers advice concerning insurance contracts?

Insurance consultant

Which of the following types of license is most suitable for an individual or corporation that, for compensation, acts or aids in any manner in soliciting applications for a policy of insurance on behalf of an insurance company admitted to do business in Indiana?

Insurance producer

Which of the following is TRUE regarding the accumulation period of an annuity?

It is a period during which the payments into the annuity grow tax deferred

If a retirement plan or annuity is "qualified", this means

It is approved by the IRS

Which of the following settlement options in life insurance is known as straight life?

Life income

A women has a life policy in force for $300,000. She is terminally ill. She wants to get some people who said they could advance her $100,000 is she would sign ownership over them. Which of the following is true?

She probably met with a Viatical Settlement Company

What authority is responsible for examining the operations of insurance companies in this state?

The Commissioner

Who is responsible for issuing a certificate of authority?

The Commissioner

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 purpose of a disclosure statement in life insurance policies?

To explain features and benefits of a proposed policy to the consumer

Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

Universal life

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority

What required provision protects against unintentional policy lapse?

Grace period

How much time does the insurer have to pay the death benefit to the beneficiary of a life insurance policy after the receipt of proof of death?

2 months

How long is a free-look period for replacement of policies?

20 day

An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)

403(b) Plan (TSA)

An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of

A STOLI policy

All of the following may be exempt from the whole or part of the Indiana licensing examination EXCEPT

A candidate applying for a surplus lines producer license

Which of the following is NOT specified under Rule 39, AIDS & HIV underwriting?

Benefits triggers

Which of the following reports will provide the underwriter with the information about an insurance applicants credit?

Consumer report

According to the entire contract provision, what document must be made part of the insurance policy?

Copy of the original application

An individual has just borrowed $10,000 from hi bank on 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

When a producer was reviewing a potential customer's insurance coverage that is written by another company, the producer made several oral statements that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation

Life Insurance replacement rule 16.1 is considered which of the following?

Disclosure rule

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)

Equity Indexed Annuity

What does "level" refer to in level term insurance?

Face amount

Who makes up the Medical Information Bureau?

Insurers

Which two terms are associated directly with the premium?

Level or flexible

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

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must

Respond to the consumers complaint

Which of the following would help prevent a universal life policy from lapsing?

Target premium

The premiums paid by the employer in a business life insurance policy are

Tax deductible by the employer

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?

The insurer

John Sims and Steve Becker have formed a partnership known as the Sims & Becker Insurance Agency. After a serious car accident, one of the partners was deceased and other became totally disabled. To finished servicing the company's existing accounts, the commissioner could grant a temporary license to all of the following EXCEPT

The partnership itself

Which of the following best describes what the annuity period is?

The period of time during which accumulated money is converted into income payments

For what reason may a life insurance producer backdate a life insurance policy?

To avoid an increase in premium rate for the insured

An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with the upcoming medical expenses. What option could the insured utilize?

Viatical settlement

What is the name of the insured who enters into a viatical settlement?

Viator

Which of the following features of the Indexed Whole Life policy is NOT fixed?

Cash value growth

The ownership provision entitles the policy owner to do all of the following EXCEPT

Set premium rates

Methods used to pay the death benefits to a beneficiary upon the insured's death are called

Settlement options

Which of the following would provide an underwriter with information concerning an applicants health history?

The Medical Information Bureau

In Indiana all of the following may act as insurance consultants EXCEPT

An individual who holds both the producers and consultants license

All of the following are examples of third-party ownership of a life insurance policy EXCEPT

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan

Which is the following is NOT an essential element of an insurance contract?

Counteroffer

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination

The Medical Information Bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons

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

The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What should the insurer do with the application?

Return to the applicant for completion

All of the following would be different between qualified and non-qualified retirement plans EXCEPT

Taxation on accumulation

When a life insurance policy was issued, the policy owner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?

The insureds contingent beneficiary

Which of the following products provides income for a specified period of years or for life, and protects a person against outliving his or her money?

An annuity

Which type of life insurance policy allows the policy owner to pay more or less than the planned premium?

Universal life

Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?

Standard risk is presentative of the majority of people

Which of the following policies would be classified as a traditional level premium contract?

Straight Life

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?

The death benefit will be smaller

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

What is the primary purpose of a 401(k) plan?

retirement

Under which circumstance can a producer receive a commission and a consultants fee for the same transaction?

A producer makes a disclosure about the compensation arrangements prior to the transaction

Which of the following limited lines producers licenses would require life producers prelicensing education and examination?

Funeral director insurance

In order for a Canadian insurance company to do business in this state, it must apply for and obtain

A certificate of authority

If a company transacts any business of insurance without a certificate of authority, what is the maximum penalty that can be charged to the director of that company?

Civil penalty of $25,000

If an agent wishes to sell variable life policies, what license must the agent obtain?

Securities

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit

Under the Replacement Regulation, Rule 16.1, which of the following statements would best describe the producer's duties?

The producer must conduct a reasonable investigation to determine if a replacement will take place

In insurance, an offer is usually made when

an applicant submits an application to the insurer