Study

#61. How are state Insurance Guaranty Associations funded? a) By their members - authorized insurers b) By the Department of Insurance c) By NAIC d) By the Government

A) by their members - authorized insurers

#60. Which of the following best describes annually renewable term insurance? a) It is level term insurance. b) It requires proof of insurability at each renewal. c) Neither the premium nor the death benefit is affected by the insured's age. d) It provides an annually increasing death benefit.

A) it is level term insurance

#82. Which of the following premium modes would result in the highest annual cost for an insurance policy? a) Monthly b) Quarterly c) Semi-annual d) Annual

A) monthly

#14. All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a) An offer to share in commissions generated by the sale. b) Dividends from a mutual insurer. c) An offer of employment. d) Stocks, securities, or bonds.

B) dividends from a mutual insurer

#10. The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the a) Complete contract. b) Entire contract. c) Total contract. d) Aleatory contract.

B) entire contract

#41. In this state, a temporary license may be issued for any of the following reasons EXCEPT a) A producer's disability. b) A producer's time in the military service. c) A producer's retirement. d) The death of a producer.

C) a producers retirement

#38. A rider attached to a life insurance policy that provides coverage on the insured's family members is called the a) Juvenile rider. b) Payor rider. c) Other-insured rider. d) Change of insured rider.

C) other-insured rider

#29. Which of the following policies would be classified as a traditional level premium contract? a) Universal Life b) Variable Universal Life c) Straight Life d) Adjustable Life

C) straight life

#4. Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? a) Term insurance only b) Permanent insurance only c) Universal life insurance only d) Any form of life insurance

D) any form of life insurance

#13. Employer contributions made to a qualified plan a) May discriminate in favor of highly paid employees. b) Are after-tax contributions. c) Are taxed annually as salary. d) Are subject to vesting requirements.

D) are subject to vesting requirements

#55. Life income joint and survivor settlement option guarantees a) Payment of interest on death proceeds. b) Payout of the entire death benefit. c) Equal payments to all recipients. d) Income for 2 or more recipients until they die.

D) income for 2 or more recipients until they die

#6. On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are a) Not taxable since the IRS treats them as a return of a portion of the premium paid. b) Paid at a fixed rate every year. c) Taxable as ordinary income. d) Guaranteed.

A) not taxable since the irs treats them as a return of a portion of the premium paid

#33. A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy a) Required a premium increase each renewal. b) Built cash values. c) Required proof of insurability every year. d) Decreased death benefit at each renewal.

A) required a premium increase each renewal

#3. Which of the following best describes what the annuity period is? a) The period of time during which accumulated money is converted into income payments b) The period of time from the accumulation period to the annuitization period c) The period of time during which money is accumulated in an annuity d) The period of time from the effective date of the contract to the date of its termination

A) the period of time during which accumulated money is converted into income payments

#72. Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase? a) Withdrawn amounts are taxed on a last in, first out basis. b) Withdrawn amounts are taxed on a first in, last out basis. c) Taxes are deferred on withdrawn amounts, but a flat penalty is charged. d) Taxes are deferred on withdrawn amounts.

A) withdrawn amounts are taxed on a last in, first out basis

#48. Which of the following is NOT true about a joint and survivor annuity benefit option? a) The surviving annuitant may receive reduced payments. b) Payments stop after the first death among the annuitants. c) A period certain option may be included. d) This option guarantees income for two or more recipients.

B) payments stop after the first death among the annuitants

#78. The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this? a) Cash option b) Reduction of premium c) Paid-up addition d) Accumulation at interest

B) reduction of premium

#98. All of the following are characteristics of a group life insurance plan EXCEPT a) The cost of the plan is determined by the average age of the group. b) There is a requirement to prove insurability on the part of the participants. c) The participants receive a Certificate of Insurance as their proof of insurance. d) A minimum number of participants is required in order to underwrite the plan.

B) there is a requirement to prove insurability on the part of the participants

#42. In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? a) Conditional b) Unilateral c) Unidirectional d) Aleatory

B) unilateral

#35. An insurance company receives an application with some information missing and issues the policy anyway. What is this called? a) Estoppel b) Subrogation c) Aleatory d) Waiver

D) waiver

#50. When would a 20-pay whole life policy endow? a) At the insured's age 65 b) After 20 payments c) In 20 years d) When the insured reaches age 100

D) when the insured reaches age 100

#7. Which of the following best describes fixed-period settlement option? a) Only the principal amount will be paid out within a specified period of time. b) The death benefit must be paid out in a lump sum within a certain time period. c) Income is guaranteed for the life of the beneficiary. d) Both the principal and interest will be liquidated over a selected period of time.

D) both the principal and interest will be liquidated over a select period of time

#23. Which of the following statements regarding HIV testing for life insurance purposes is NOT true? a) Positive test results will be forwarded to the state's Department of Health if a physician is not selected by the applicant. b) The testing practices must meet the criteria of the U.S. Department of Health and Human Services. c) HIV testing is regulated at the state level. d) Insurers are barred from requesting HIV testing.

D) insurers are barred from requesting hiv testing

#27. Which of the following best describes a misrepresentation? a) Making a deceptive or untrue statement about a person engaged in the insurance business b) Making a maliciously critical statement that is intended to injure another person c) Discriminating among individuals of the same insuring class d) Issuing sales material with exaggerated statements about policy benefits

D) issuing sales material with exaggerated statements about policy benefits

#51. Traditional IRA contributions are tax deductible based on which of the following? a) How long the plan has been in force b) Owner's age c) IRA limit d) Owner's income

D) owners income

#64. Which of the following may NOT be included in an insurance company's advertisement? a) The policies' limitations or exclusions b) The name of a specific agent c) An identification of a limited policy as a limited policy d) That its policies are covered by a state Guaranty Association

D) that it's policies are covered by a state guaranty association