Primerica Pre-Test

A client.

An insurance producer is acting as a broker when he or she negotiates for an insurance contract on behalf of

Mostly on a state level.

Insurance is regulated

Commissioner

It is the job of what authority to appoint and remove officers and other personnel employed within the Department?

Variable Life

Solicitation rules would apply to which of the following types of coverage?

Acting in a fiduciary capacity.

The Commissioner may revoke a producer's license for all of the following reasons EXCEPT

$25

What is the maximum allowed value of a gift that an agent can give to an insured without violating the regulation on rebating?

$2,500

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

Retirement

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

They determine how death proceeds will be paid.

What is the purpose of settlement options?

It is level term insurance.

Which of the following best describes annually renewable term insurance?

Application

Which of the following would be the basic source of information used by the company in the risk selection process?

A level annual premium for the life of the insured

A Straight Life policy has what type of premium?

His renewal forms were lost in the mail.

A licensed insurance producer may request a waiver of license renewal procedures under any of the following circumstances EXCEPT

30 days, by mail or electronically

A licensed insurance producer must notify the Department of a change in mailing address within how many days and by what method?

The full death benefit

A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy?

Nonresident producers may not conduct business under any name besides legal names.

A nonresident licensed producer decides to conduct business under an assumed name. Which of the following is true?

If the lender has credit insurance, this amount will be paid to the lender.

A person takes out a loan in order to pay off his house. He dies several years later, having paid off only a small portion of the debt. Which of the following is true?

Level term

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?

$10,000

A producer was found guilty of a 3rd violation of the Insurance Code. What would be the monetary penalty he will have to pay?

A copy of the original application for insurance.

According to the Entire Contract provision, a policy must contain

Copy of the original application

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

Explaining to client the advantages of permanent insurance over term and suggesting changing policies

All of the following actions can be described as twisting EXCEPT

Policy loans can be made on policies that do not accumulate cash value.

All of the following are true regarding insurance policy loans EXCEPT

Fair Credit Reporting Act

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

$8,000, no tax consequence

An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?

The date of medical exam

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?

A fine up to $5,000

An insurance producer refused to comply with a subpoena. What would be the producer's penalty for this violation?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

Pay a reduced death benefit

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?

Authorized insurer.

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Increases annually.

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

Guaranteed insurability.

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

30 days

By how many days does the discontinuance of a group insurance policy reduce the time limit for providing notice of claim or proof of loss?

100% participation of members is required in noncontributory plans.

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?

5 days

If a consumer requests additional information concerning an Investigative Consumer Report, how long does the insurer or reporting agency have to comply?

Return the application to the applicant for a signature.

If an agent fails to obtain an applicant's signature on the application, the agent must

A misrepresentation.

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

30

Licensees must file with the Department a branch office registration form within how many days before business is first conducted there?

Settlement options.

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

Grounds for license revocation.

Presenting any written or oral statement in support of or in opposition to a claim payment, while knowing that the statement contains false or misleading information material to the claim, would be best considered

180 days.

Rick is killed in an accident. His business partner, who is not a licensed producer, finds another producer that would be willing to continue Rick's insurance transactions. This agreement can last no longer than

Certification of license status report

The Department can run a report on a specific producer that lists his or her license information, current license status, and the types of insurance that he or she can transact. What is the name of this report?

Tax deductible contributions.

The advantage of qualified plans to employers is

Joint and survivor.

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

Partner A buys a policy on partner B in the amount of $75,000 naming Partner A as beneficiar

Two equal partners in a business worth $150,000 are using a Cross Purchase plan to protect against the death of each other. Which of the following statements would be correct?

An insured is diagnosed with cancer and needs help paying for her medical treatment.

Under which of the following circumstances would an insurer pay accelerated benefits?

Insurance

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

The original age is used for premium determination

What is the advantage of reinstating a policy instead of applying for a new one?

It is intended to provide coverage on a date earlier than the date of the issuance of the policy.

What is the special significance of a conditional receipt?

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

What is true about nonforfeiture values?

It was decided that insurance was not interstate commerce and could not be regulated by the federal government.

What significance did Paul vs. Virginia have on the insurance industry?

John's age at death.

When Mary's husband John died, she was the beneficiary of his $100,000 life insurance policy. She decided to assure that she would have income for life, so she chose the life income settlement option. The amount of her payments will be determined by using all of the following, EXCEPT

180 days.

When an insurance producer sustains a spinal cord injury in a car wreck, he is rendered permanently disabled. In order to continue his business, his wife establishes an agreement with another producer to continue his business. This authorization will last for a maximum of

When death occurs within a specified period of time after the policy was issued

When may an insurance company use suicide as a defense against paying a death claim?

The beneficiary must have insurable interest in the insured.

Which is NOT true about beneficiary designations?

The policyholder can receive distributions at any time without being penalized.

Which of the below statements is FALSE concerning a Modified Endowment Contract (MEC)?

Making derogatory oral statements about another insurer's financial condition

Which of the following best describes an unfair trade practice of defamation?

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

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

Recipient's life expectancy and amount of principal

Which of the following factors determines the amount of each installment paid in a Life Income Option arrangement?

Producer contact information

Which of the following is NOT required information a producer must provide before soliciting insurance?

It would not occur in a deferred annuity.

Which of the following is NOT true regarding the accumulation period of an annuity?

Payor Benefit Rider

Which of the following riders would NOT cause the Death Benefit to increase?

Decreasing term

Which of the following types of insurance policies is most commonly used in credit life insurance?

Premium amounts and surrender values

Which of the following will be included in a policy summary?

Backdating policies to secure a lower premium for the insured

Which of the following would NOT be considered a misrepresentation on the part of the insurer?

Calls based from outside of the United States

Which of the following would NOT be considered an exception to the National Do Not Call List?

At the end of 20 years, the policy's cash value will equal $100,000.

Which of the following would NOT be true regarding a $100,000 20-year level term policy?

Producer's license

Which of the following would indicate a contractual relationship between a producer and an insurance company?

Replacement rule

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

Inspection Report

An insurer receives a report regarding a potential insured. The information includes hobbies, financial status, and habits. Which best describes this report?

The employees receive individual policies.

Which of the following is INCORRECT concerning a noncontributory group plan?

Whether an insurable interest exists between the individuals.

If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about

Increasing Term

What type of insurance would be used for a Return of Premium rider?

0%

If an insured receives accelerated death benefits, what is the least amount of the original death benefit that the beneficiary would receive after the insured's death?

The type of investment.

In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT

Creditor can only insure the debtor for the amount owed.

Which of the following is true regarding the insurance amount in a credit life policy?

A policyowner who is not the insured

Who is a third-party owner?

Illegal

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

Medical background

Which of the following information about the applicant is NOT included on Part 1 of the application for insurance?

The decision in U.S. vs. the South-Eastern Underwriters Association reversed the decision made in Paul vs. Virginia.

Which of the following is true regarding a Supreme Court decision?

Single payment or periodic payments

Which two terms are associated directly with the way an annuity is funded?

Universal life

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?

The claims will be paid by the state Life and Health Guaranty Association.

An insurer goes bankrupt and is unable to pay on any of its insureds' claims. Which of the following will happen?