State board test part 3
Which of the following statements is true regarding an agent's report during the policy application process
It provides the agents personal observations concerning the proposed insured
Once a temporary producer's license has expired it's initial period, the person granted the temporary license must
Obtain a permanent license
Which type of authority is found in the agents contract
Express
Which of the following is not a personal use of life insurance
An individual buys insurance to fund a buy-sell agreement
Which of the following premium modes would result in the lowest overall premium
Annually
When agents, brokers and solicitors handle premium for an insurer, they are acting in which capacity
As a fiduciary
How long do temporary producer's license last without requiring an examination
180 days
Which of the following losses would likely be covered under the accidental death rider
Death caused by head on collision
According to agency law, the producer always represents
The insurance company
Wagering on a sporting event is known as what type of risk?
speculative
What is the tax penalty for withdrawing money from any annuity prior to the age of 59 1/2?
10%
Which statement is an accurate description of life insurance policy dividends
They are not taxable or guaranteed
Which risk classification is representative of the majority of people in a certain age groups and with similar lifestyles
Standard
In contrasting stock insurers and mutual insurers which statement is true
Stock insurers are owned by shareholders and issue nonparticipating policies
In a life insurance application all of the following signatures will be required except
The home office underwriter
How are policy loans calculated
The policy's cash value minus unpaid loans a accrued interest
Which of the following is NOT a standard exclusion in life insurance policies
disability
Which of the following best depicts the law of large numbers
The larger the pool of risk under study, the more accurate the prediction
In life insurance underwriting, all of the following are true regarding HIV testing except
The person may be denied coverage based solely on the presence of HIV
The commissioner has determined that that a producer is ineligible for appointment by the insurer. The commissioner must notify the insurer within
5 days
An insured purchases a non-participating whole life policy. The policy includes all of the following except
Dividend
In insurance the agents have authority to represent the company and may exercise this relationship through
Express authority, implied authority and apparent authority
Which of the following is a primary source of information that's insurer uses to evaluate insured's risk for life insurance
Insurance application
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
What type of insurer uses a formal sharing agreement
Reciprocal Insurers
An individual purchases life insurance and lists his parents as the beneficiaries. He is able to change his beneficiaries at any time. What type of beneficiary designation does the policy have
Revocable
In a deferred annuity the difference between the accumulation value and surrender value is
Surrender charge
What is the cost of coverage based on for group life insurance
The average age and ratio of men to women
Insurance provides a means to
Transfer a loss
What is the difference between a straight life policy and a 20-pay whole life policy
Premium payment period
If a life insurance company uses HIV testing as part of its underwriting when must the applicant be notified of the procedure
Prior to performace of the test
If an annuity has a guarenteed minimum interest rate this means
The interest rate will never drop below the garenteed minimum
Applicants for a resident producer licensemust meet the following requirements except
Be at least 21 years old
Which of the following would be true of both fixed-period and fixed-amount settlement options
Both guarantee the principal and interest will be paid out
Which of the following would be required to become licensed as an insurance provider
A customer service representative who solicits no more than one policy a year
Which of the following best describes a rebate
A producer returning part of her commission to her client, as an inducement to but
Which of the following statements is true regarding premium in a 10-year levelpremium policy
The premium will remain level for 10 years
An insured bought a insurance policy that requires him to pay $150 in premiums on the 15th of each month. He then takes an extended vacation and forgets to pay the premium. Ten days later his policy is still in effect and has not lapsed which policy provision allowed for this
Grace period
For a contract to be enforced by law the contract must be
Legal and not against public policy
In a group life policy with death benefit more than $50,000
Premium cost above $50,000 is taxable as income to the employee
An insured decides to surrender his Whole Life insurance policy. The cash value at surrender was higher than the premium paid into the policy, due to interest. What part of the surrender value would become taxable
The difference between the premiums paid and cash value
Two individuals of the same age, health status, and life expectancy apply for individual life insurance coverage. When policies are issued by the same insurer the premium rates are different based or the insured's race. What practice does this describe
Unfair discrimination
Because of an injury, an insured has been unable to work for 7 months. He wasn't able to pay his life insurance policy premium, yet the policy remained in force. The policy includes
Waiver of premium rider
Among people in the same class and life expectancy, which of the following factors can be used to influence premium rates?
occupation
Which of the following will not be included in the buyers guide
Specific information about the policy
A college student will graduate next year. His studies have eleminated his ability to work so he has borrowed funds to pay for his education. He would like to start a permanent life insurance program that would cover his debt and will be affordable during the period he is establishing earning potential. An appropriate policy would be
Modified whole life
Insurers cannot transact insurance in this state without a
Certificate of authority
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 income for the rest of their lives. Which settlement option should this policy owner select
Joint and survivor
Which dividend option will increase the death benefit
Paid-up additions
