Review Missed Questions Life Insurance Exam
Premiums
All of the following are examples of risk retention EXCEPT
Buy-sell agreement
All of the following are personal uses of life insurance EXCEPT
It is a life contingency option
All of the following statements are true regarding installments for fixed period annuity settlement option EXCEPT
Pay the policy proceeds only if it would have issued the policy
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
Predicted needs of the family after the insured's death
Based on the Human Life Value Approach, which of the following is not used to calculate an individuals life value?
Seek higher returns
Equity Indexed Annuities
Agents contract with the principal
What documentation grants express authority to an agent?
Coverage ends and the policy cannot be reinstated
What happens when a policy is surrendered for its cash value?
Universal Life
What kind of policy allows withdrawals or partial surrenders?
To minimize the insured's level of liability in the event of loss
What of the following is not a goal of risk retention?
Purchase a single premium policy for a reduced face amount
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
Producer
Which of the following licensees is classified as a representatives of the insurance company and now allowed to represent an insured or claimant?
Calls based from outside of the US
Which of the following would not be considered an exception to the National Do Not Call List
Other-insured rider
A rider attached to a life insurance policy that provides coverage on the insureds family members is called the
The insurer will pay the full death benefit from the group policy to the beneficiary
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 car accident on June 1. What will happen?
Rebating
Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as
By state and federal agencies
How are variable annuities regulated
Until the beneficiary's death
How long will the beneficiary receive payments under the single life settlement option?
$3,000(income taxable as interest)
If a $100,000 of life insurance proceeds were used in a settlement option paying $13,000 per year for 10 years, which of the following would be taxable annually?
The annuitant will receive the higher of either the guaranteed minimum rate or current rate
In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?
90 days
Nonresident producers may become resident producers if they submit a completed application within how many days of establishing residence in PA
20 days
Once a viatical settlement contract has been completed, how long does the viatical settlement provider have to notify the insurance company that the life policy has been viaticated?
To create an estate
The best reason to purchase life insurance rather than annuities?
Annually Renewable Term
The death protection component of Universal Life Insurance is always
Annually Renewable Term
The death protection component of Universal Life insurance is always
$100,000
The insured under a $100,000 life insurance policy with triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?
To purchase a smaller amount of the same type of insurance as the original policy
The paid up addition option uses the dividend
Interest only option
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?
Fixed Amount
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay the benefits
Signed waiver of premium
Upon policy delivery, the producer may be required to obtain any of the following except
Refund the premium paid
An insured committed suicide one year after his life insurance policy was issued. The insurer will
The beneficiary will only receive payments of the interest earned on the death benefit
Upon the death of the insured, the primary beneficiary discovers that the insured chose the INTEREST ONLY settlement option. What does this mean?
The application being given to a prospective insured
Which of the following is NOT the consideration in a policy?
Variable annuities are regulated solely by the state Department of Insurance
Which of the following is NOT true regarding the regulation of variable annuities?
It is a period during which the payments into the annuity grow tax deferred
Which of the following is TRUE regarding the accumulation period of an annuity
A claims adjuster advises that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
Which of the following would be considered an unfair claims settlement practice?
Option B
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Insurers
Who makes up the Medical Information Bureau
Costs of training a replacement
A key person insurance policy can pay for which of the following?
The date of medical exam
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. 5 Days later the applicant had to submit a medical exam. If the policy is issued what would be the policy's effective date?
The policy will not be affected.
An individual applies for a life policy. Two years ago he suffered a head injury from an accident. so he cannot remember parts from his past, but otherwise is competent.The insurer issues the policy and learns of his history one year later. What will probably happen?
A portion of the benefit up to a limit is tax free, the rest is taxable income
An individual has been diagnosed with Alzheimers. He is insured under life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?
Executive is the owner, Executive pays the premium
In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?
Death benefit
Which component increases in the increasing term insurance?
Insurance Guaranty Association
Which entity protects policy owners, insureds, and beneficiaries under life insurance policies, health insurance policies, annuity contracts, and supplemental contracts when insurers fail to perform contractual obligations due to financial impairment
Reduced paid-up
Which nonforfeiture option provides coverage for the longest period of time?
Viatical settlement providers
Which of the following are the people/entities who effectuate a viatical settlement contract?
It allows the owner to surrender the annuity without a charge
Which of the following best describes a bail-out provision?
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance
Which of the following best describes the MIB?
They earn lower interest rates than fixed annuities
Which of the following is not true regarding Equity Indexed Annuities?
Pay a reduced death benefit
An insured has had a life insurance policy that he purchased 3 years ago when he was 40. He is killed in a car accident and it is discovered that he is actually 45 and not 43 as stated on the application. What will the company do?
It is used to lower premiums
An insurer invest the money it receives from premiums paid by its insureds. Which of the following is TRUe regarding the interest earned on the investments?
It is used to lower premiums
An insurer invests the money it receives from premiums paid by its insureds. &
Decreasing Term (Mortgage)
An individual has just borrowed $10,000 from his bank on a 5-yr installment loan requiring monthly payments. What type of life insurance policy would be best?
The insured may renew the policy for another 10 years but at a higher premium rate
An insured purchased a 10 year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10 year term?
False Advertising
Circulating deceptive sales material to the public is what type of Unfair Trade practice?
A certificate of authority
In order for a foreign insurer to do business in this state, it must apply for and obtain
The Insurance Department
In order to become a viatical settlement provide, an application must be made with
Reduced paid-up
Which nonforfeiture options provides coverage for the longest period of time?