test #3
The mode of premium payment
Is defined as the frequency and the amount of the premium payment
An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds
$30,000
All of the following are features and requirements of the Living Needs Rider EXCEPT
Diagnosis must indicate that death is expected within 3 years
Which of the following statements best describes the effect the Accelerated Benefit provision would have on the benefits paid to the beneficiary?
It will decrease the benefits paid to the beneficiary
All of the following must be specified in an insurance policy EXCEPT
The financial rating of the insurer
What term best describes the act of withholding material information that would be crucial to an underwriting decision?
Concealment
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
The policy is owned by the company.
All of the following are true about variable products EXCEPT
The premiums are invested in the insurer's general account
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000
What is the penalty for excessive contributions to an IRA?
6%
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Paid-up additions.
Which of the following policy components contains the company's promise to pay?
Insuring clause
Which of the following best describes a pure life annuity settlement option?
Pure life provides payments for as long as the annuitant is alive
he 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?
Reduction of premium
Which of the following entities may NOT be an insurer?
The Commissioner
if a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?
The balance of the loan will be taken out of the death benefit.
The title page of the policy provides a summary of the benefits and coverages provided by the policy. All of the following information is included in the title page EXCEPT
The insured's beneficiaries.
All of the following statements are true regarding installments for a fixed amount EXCEPT
The payments will stop when the annuitant dies.
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?
Unilateral
Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?
Withdrawals are not taxable.
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT
it is a life contingency option.
Another name for a substandard risk classification is
rated
signing and dating a delivery receipt for a life insurance policy helps to establish all of the following timeframes EXCEPT
the Grace Period.
All of the following are dividend options EXCEPT
. Fixed-period installments
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
40 credits
If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?
Jumping juvenile policy
Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT
The loss may be intentional
The Commissioner of Insurance supervises and regulates the insurance affairs in the State of California, and is chosen by
The people.
Under an extended term nonforfeiture option, the policy cash value is converted to
the same face amount as in the whole life policy.
Which of the following best describes fixed-period settlement option?
Both the principal and interest will be liquidated over a selected period of time.
In order to become an admitted, authorized insurer, what is the primary body of law about which an applicant company must be concerned?
California Insurance Code