State board test part 4
Who is the annuity owner
The person who purchases the annuity
Under what circumstances will the contingent beneficiary receive the death benefit
If the primary beneficiary dies before the insured
Restoring an insured financially after a claim is know as
Indemnity
A graded premium policy is a moderated form of
Whole life
All of the following are true of a nonqualified deferred compensation plan except
Contributions are tax deductible
What does the guaranty association guard against
Insurer insolvency
Which of the following is not one of the requirements for obtaining a nonresident license in Michigan
The applicant must complete prelicenseing education and examination in the nonresident state
How soon must an insurer send a notice of cancellation to an insured prior to terminating a universal life policy
30 days
There is an 10% penalty of the taxable portion prior to what age
59 1/2
Which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity
Accumulation period
During the accumulation phase of a fixed annuity, the annuitant's interest rate is based on a minimum rate as specified in the contract or the current interest rate whichever is
Higher
What guarentees that the information explained in the insurance contract is true
A warrenty
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?
Extended term
A married couple wants to include their entire family in their whole life policy under one rider. Which of the following riders would help them achieve that
Family term
All of the following information needs to be included on a an application for life insurance except
Health insurance policies in force
Under which of the following conditions would life insurance proceeds be taxable by the federal government
If there is a transfer of value
If a loan request is for payment of due premiums on the policy how soon must the insurer issue a loan
Immediately
The reduction of premium option uses the dividend to reduce
Next year's premium
Which statement best describes agreement as it relates to insurance contracts
One party accepts the exact terms of the other party's offer
When an agent delivered an insurance policy to the insured, he collected the initial premium as well as a document verifying that the insured had not had any injuries or illness since the application date. What is this document called
Statement of good health
What is the exclusion ratio used to determine
The annuity benefit to be excluded from taxes
All of the following are true regarding the waiver of insurance rider except
The rider expires when the insured reaches age 60
When an insured terminates membership in the insurance group the insured can convert to
Whole life without proof of insurability
A licensee fails to earn the required CE credits by the expiration of the 90 day grace period and the licensee has been terminated for education. How much time does the licensee have to meet the CE requirements to be considered for license reinstatement
1 year
Which of the following is true of level term insurance
It is temporary protection
Guaranteeing future dividends is considered to be considered as unfair or deception know as
Misrepresentation
Variable life insurance is regulated by allow the following entities except
The us department of treasury
Which of the following would not trigger the payment of accelerated death benefits
Being permanently disabled
The frequency and the amount of premium payment are known as
Premium mode
If an insured purchases an insurance policy with a large deductible what risk management technique is the insured using
Retention
A life insurance policy can be back dated to affect a lower premium for a maximum of how many months
6
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
An agent knowingly misrepresents material information for the purpose of including an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice know as
Twisting
An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividend will be higher and his premiums will be slightly lower. The policy however will not offer either one of these things. What type of misrepresentation is being commited
Twisting
In order to reinstate a life insurance policy's he insured must do all of the following except
Pay next years premium in advance
A married couple purchases 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
Payor benefit
An adjustable life policy can assume the form of
Either term insurance or permanent insurance
How many hours of continuing education are required to maintain a counselor's license
None
Which term describes an individual who is domiciled and licensed as a resident producer in a state other than Michigan
Nonresident producer
All of the following are true of annually renewable term insurance except
Proof of insurability must be provided at each renewal
Which of the following is not true regarding the agents implied authority
It is specifically stated in the contract
During policy solicitation an insurer exaggerates the financial condition and makes it sound worst that it is. This is an example of a unfair trade practice of
Defamation
Cash value gaurentees in a whole life policy are called
Nonforfeiture values
Insurance contracts are unilateral in nature. What does that mean?
only one party makes a promise
Which of the following statements concerning the medical information Bureau is correct
The medical information bureau assist underwriters in evaluating and classifying risks
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 would not be eligible for coverage under a key person
The owner of the shop
The human life value approach to determining insurance needs is based upon which of the following ideas
Loss of bread winner income
If the insured does not receive the statement of policy information atleast 5 days prior to the policy delivery. The free look period is extended to
15 days
Which of the following statements describes one of the reasons individuals purchase life insurance
It creates an immediate eatate
In insured recently had a new home built and insisted on having smoke detectors installed in multiple places in the house. What method of handling risk is the insured using
Reduction