State board test review part 5

All of the following allow practices regarding producers commissions except

Offering a financial reward to an unlicensed individual for providing a sales lead

Guaranteeing future dividend is considered to be an unfair or deceptive act known as

Misrepresentation

All of the following are true of group life insurance except

The insureds each own their own contract

Policy loan requests except for loan requests for payment of due premium may be deferred for a period of up to

6 momths

The policy owner has an option to pledge the life insurance policy as collateral for a bank loan. This is called

A collateral assignment

All of the following are ways to handle risk except

Elimination

An important fact about the financial status of an insurer was deliberately withheld. Which of the following terms best describes this action

False financial statement

Because of the imposed blackout period the surviving spouse will not receive social security benefits until

He or she qualifies for retirement benefits

An annuitant pays the annuity premium on the 14th of each month. Which of the following best describes this arrangement

Level

A stock insurer is defined as an insurer

Owned by its stockholders

What is the purpose of the surrender charge in a deferred annuity

To compensate the company for loss of investment value

A lender who conditions approval of a loan on the condition that the borrower purchase insurance from that lended may be guilty of

coercion

Life insurance can provide which of the following?

Survivor protection

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 riders pay a beneficiary a death benefit that is double or triple the face amount of the insured's death was caused by an accident as defined in the policy

An accidental death rider

Underwriters use all of these methods to protect the insurer against adverse selection except

Only accepting a small percentage of applicants

A whole life policy is surrendered for a reduced paid up policy. The cash value in the new policy will

continue to increase

A loss resulting from which of the following would qualify for the accidental death rider coverage

An automobile accideng

How many days is the free look period in most life insurance policies

10 days

With Adjustable Life, the owner can change all of the following EXCEPT

insured

If an insured dies and it is discovered that the insured misstated his/her age or gender the insurance company will

Adjust the death benefit to what the premium would have purchased at the actual age

An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount

Children's term rider

A whole life policy that will generate immediate cash value is a

Single premium policy

In life insurance which of the following is not required for you to have an insurance interest in the insured

The beneficiary

Who is responsible for content and form of insurance advertisements

The insurer whose policies are being advertised

While completing a life insurance application. The applicant realizes that she should have answered an earlier question differently. what should the agent do to make the necessary change

Cross out the incorrect information, write in the correct answer, and have the applicant initial the change

How will life insurance proceeds that are paid as a lump sum received by the beneficiary

Free of federal income taxation

An agent tells an insured that if he replaces his current insurance policy for a newer one his dividend will be higher and his premium will be slightly lower. The policy however would not offer neither one of these things. What type of misrepresentation is being committed

Twisting

Considering the principles of liquidity how would the policy owner use today's cash value in a life insurance policy

Use it for emergency expenses

How is a licensee's date of continuating education credit review determined

By the licensee month and date of birth

An annuity has accumulated the cash value of $70000 of which $30000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive

$70,000

According to the life insurance replacement regulations which of the following would be an example of policy replacement

A policy is reissued with a reduction in cash value

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Extended term

Which of the following could reduce the amount of death benefit

Failure to repay a policy loan

To purchase insurance the policy owner must face the possibility of losing money or something of value in the even if a loss. What is this concept called

Insurance interest

All of the following statements are true regarding an ordinary (straight) life policy except

It does not have a gaurenteed death benefit

An equity indexed annuity will grow based upon

Performance of a recognized index

What does the application of contract of adhesion mean

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured

Which of the following is required in order for a plan to be qualified

The plan must be formally written and communicated to the employees

Which of the following elements of an insurance contract requires paying premium and providing a statement of good Health

Consideration

Key person insurance can provide protection for all of the following economic losses to a business except

pay the death benefit to the estate of the insured

Which of the following is not one of the independent rating services that publishes guides to insurance companies financial integrity

NAIC

Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application

The application contains material misrepresentation

Partners in a business want to make sure that if one of them was to pass away their surviving family will receive a fair value Of their portion in the business. What life insurance arrangement would be most suited for transitioning business?

Buy sell agreement