terms

All of the following are types of insurers, except:

Proprietary insurers

The Attending Physician's Statement (APS) is completed by:

An applicant's physician to provide information about the applicant's medical history

Under California life insurance replacement legislation, conservation is defined as:

An attempt by the existing insurer or agent to keep a policy in force where replacement is contemplated

Which of the following best describes the return of premium rider?

An increasing term benefit that matches the cumulative premiums paid

Regarding insurable interest which one of the following is false?

An insurable interest exists in cases where a financial or economic loss by the insured results in the event that the policy owner dies

All of the following statements concerning contract law are correct, except:

An insurance policy is a legal contract between 4 parties

A married couple wants to have funds available so that the heirs to their estate have the funds necessary to pay the estate taxes. Which of the following would be the most economical and effective way to accomplish this?

Buy a Joint Survivorship Life policy

The method of premium can vary depending on the:

Type of policy issued

Which of the following is NOT a type of Term Life Insurance Policy?

variable

The Return of Premium Rider, the Return of Cash Value Rider, and the Cost of Living Rider all use which type of term insurance to accomplish their objective?

increasing term

Interest earned on premiums paid to an insurer helps to ________ the premiums charged.

lower

When credit life insurance is used to protect against the unpaid balance of a mortgage, it is commonly referred to as:

Mortgage redemption insurance

If Alvin purchases a Variable Universal Life Policy with a face amount of $250,000, and chooses death benefit Option B, upon his death the amount of the benefit payable to the beneficiary would be _________ if the policy had $25,000 in cash values.

$275,000

If Jon dies with an outstanding policy loan of $10,000 on his $100,000 policy that has $15,000 of cash value, what will his beneficiary receive at the time of claim?

$90,000

The applicant/insured wants a term life insurance policy that will last for 20 years and is willing to risk that the insurer is managing its financial affairs properly and is not concerned about the premium of the policy down the road so long as there is a cap on how much it can ultimately become, so the producer should show him/her a(n):

20 year indeterminate premium term life insurance policy

Joe has a whole life policy with a guaranteed insurability rider. He was 21 at the time the policy was issued. If he exercises all of the options at the ages specified under the typical rider, how many policies will he end up with?

7

The Double Indemnity Rider requires that the insured die within _____ days of the accident.

90

Typical exclusions or restrictions found in an accelerated death benefit include all of the following, except:

Accidental injury while at work

In California, every person has an insurable interest in the life and health of all of the following, except:

Any person who agrees to be insured

If a basic life insurance illustration is used by an insurance producer in the sale of life insurance and the policy is applied for as illustrated, a signed copy of that illustration must be submitted to the insurer and provided to the applicant:

At the time of policy application

Which of the following is the correct term to describe a contract prepared by one party and submitted to the other party on a take it or leave it basis, without negotiations?

Contract of Adhesion

Which of the following personal uses of life insurance is specifically designed to provide benefits to the policyowner while the insured is still alive?

Cash accumulation

When the initial premium is not paid with the application, what must the producer do before coverage can begin?

Collect the premium and obtain a signed Statement of Good Health from the applicant/insured at time of policy delivery

California law requires that the purchaser of life insurance be provided with a copy of a Buyer's Guide to Life Insurance produced by:

The NAIC

A current and prior HIV positive test result (two positive blood tests) may be the basis for a life insurer to:

Decline the application for life insurance

Which of the following is a type of life insurance that provides an amount of coverage that diminishes while the policy is in effect and is most often used to pay an outstanding loan or mortgage balance upon the death of the insured?

Decreasing Term

Frieda wants coverage until she has paid back her business loan in 10 years. The ideal life insurance policy with the least expense would be:

Decreasing Term Life

If the premium can fluctuate at the policyowner's discretion, meaning it can be increased, decreased, or even skipped at any premium due date, what premium paying method was used?

Flexible

In California, which of the following statements is false regarding a 'basic illustration' used in the sale of life insurance?

For a policy in which illustrations will be used, the insurer shall provide each policyowner with a report on the status of the policy every third anniversary date

Ultimately it is up to the _______ to determine if the proposed insured is an acceptable risk.

Home office underwriter

All of the following are characteristics of Ordinary Whole Life Insurance, except:

If insured lives to age 100, the total amount of premium paid over the lifetime of the insured is returned to the policyowner

A Return of Premium Term policy provides for a full refund of premiums under what situations and circumstances?

If the insured is still living at the end of the term

What type of term life insurance policy has a policy premium that can fluctuate between the current charge and a maximum rate stated in the policy based on the insurer's mortality, expenses, and investment returns?

Indeterminate

A STOLI transaction is best defined as which of the following?

Inducing insureds who do not need and cannot afford life insurance to buy a policy and sell it for cash

Life insurance applications cannot contain questions about prior HIV testing unless the question is limited to prior testing for the purpose of obtaining:

Insurance

The Medical Information Bureau (MIB) is formed by:

Insurance companies

Which of the following best describes a Statement of Good Health?

It verifies that the insured has not suffered a serious illness or injury requiring surgery or hospitalization since the application date

The Commissioner, Director, or Superintendent of insurance is responsible for all of the following, except:

Make insurance laws when appropriate

Which one of the following will pay the highest premium for a life insurance policy all other factors being equal?

Male age 70

All of the following are recognized classes of insurance in California, except:

Medicare Supplement

A Life Settlement Contract is a financial transaction in which the owner of a life insurance policy sells an unneeded policy to a third party for how much?

More than the cash surrender value and less than the face value

If premiums were submitted at the time of application, when is a life insurance policy considered constructively or legally delivered by the insurer?

Once the insurer mails the issued as applied for policy to the producer

Policies that may pay dividends to the policyowner are known as:

Participating

While a Guaranteed No-lapse Rider relieves the policyowner of the responsibility of monitoring the policy's cash value what is required of him/her to make sure that the policy's no-lapse rider remains in effect?

Pay the premium in full and on time

The face amount of an Ordinary Whole Life Policy _________ over the life of the policy.

Remains the same

Which of the following term life insurance policies would be the most expensive, everything else being equal at the time of issuance?

Renewable and Convertible

Which of the following best describes producer field underwriting?

Taking the time to probe beyond the stated questions on the application based upon the applicant's responses

If an insured has a Life Paid-Up at 75 Policy (a limited-pay life paid-up at age 75), what would the beneficiary receive if the insured died at age 68?

The face amount

The Buyer's Guide to Life Insurance provides basic information concerning all of the following, except:

The interest rates of the different policies which are sold

Who has a right to rescind a life settlement contract?

The owner of the life insurance policy

In determining the proper amount of life insurance, the Needs Analysis Approach takes into consideration all of the following factors, except:

The projected future value of services provided by the insured

In California, in a replacement situation, it is recommended that an existing policy not be terminated until:

The replacing policy is issued and delivered

Before the process of underwriting begins, who will make the final determination as to whether insurable interest exists?

The underwriter

What is the relationship that must exist between the applicant and insured, at the time of application and policy issuance, in order for the contract to be valid?

There must be an insurable interest

Every insurer and life agent offering for sale individual life insurance policies, or individual annuity contracts that are issued for delivery to senior citizens in California with the use of non-preprinted illustrations of non-guaranteed values must disclose on those illustrations, or on an attached cover sheet, which one of the following statements?

This is an illustration only which is not intended to predict actual performance, therefore interest rates, dividends, or values that are contained herein are not guaranteed, except for those items clearly labeled as guaranteed

Life insurance policy illustration requirements apply to which one of the following?

Traditional whole life insurance

Premiums paid in advance are considered what type of premiums until coverage has been provided?

Unearned

A life insurance premium is paid each month. The insurer then subtracts a mortality and expense charge from the policy's cash value. This best describes which of the following life insurance policies?

Universal Life

Which of the following policies requires a producer to have both a life and securities license to sell?

Variable Universal

The value within a permanent life insurance policy that the policyowner can access through a policy loan or policy surrender is known as the ___________.

cash value

If the insured qualifies for long-term care benefits based on being chronically ill as defined in the Long-Term Care rider, how will this impact the ultimate death benefit payable to the beneficiary?

it will be reduced

A _________ policy is one that is written on the life of a minor.

juvenile

What is the maximum amount of credit life insurance that can be written on an insured?

no more than the outstanding debt