VA Life Version 1
A teacher recently retired at age 63 and has a tax sheltered annuity (TSA). Periodic deposits total $120,000 and the value of the contract is now worth $200,000. How much is taxed if the current value is surrendered today?
$200,000
What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?
100
If an agent holds 1 license type, the biennial continuing education requirement is _____hours.
16
After passing the State exam, an applicant is required to obtain the appropriate license within ____ calendar days.
183
Virginia requires that an insurance agent must complete____ hour(s) of continuing education on the subject of ethics every reporting period.
3
Administrative actions taken against an agent must be reported to the State Corporation Commission within ___ days of the final disposition.
30
An insurance company or agent must respond within ____ days to an insured's request to access personal information collected on him/her by the insurer.
30
If an insurance agent changes his/her address, the Bureau of Insurance must be notified within____ calendar days.
30
Greg had recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy?
31 days
An agent who wilfully violates the insurance cod may, after a hearing, pay up to ____ per violation as a penalty.
5,000
Which of these is an accurate statement regarding the fixed period settlement option on a life insurance policy?
A portion of the payments paid to the beneficiary comes from interest calculated on the proceeds of the policy
Which benefit is normally payable to a life insurance policyowner when the insured's life expectance has been severely limited?
Accelerated (living) benefit
Insurance companies are required to hold an appointment on a(n) ____ who represents them.
Agent
Which of the following will happen if a licensed resident insurance agent moves to another state?
Agent's license shall terminate immediately
Which of the following BEST describes an insurance agent conducting business in Virginia?
An individual who sells, solicits, or negotiates contracts of insurance
Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)?
Annual investment gains are included in participant's gross income
An applicant submits a life insurance application where an investigative consumer report is used in the underwriting process. Which of these statements is true?
Applicant has a right to receive a copy of the report
_____ is the attempt made by an agent to intimidate or use force.
Coersion
Kevin has an existing life insurance policy and assigns it to another insurer for a new contract. How would this transaction be treated for tax purposes?
As a Section 1035 exchange
A domestic insurance company in Virginia MUST
Be formed under Virginia insurance laws
A policyowner pays the first annual premium for a $50,000 life insurance policy and dies one month after the policy effective date. Which of these statements is normally true?
Beneficiary receives $50,000 income tax-free
Which statement regarding the waiver of premium rider is accurate?
Cash payment is not directly provided to the policyowner
Which statement regarding universal life insurance is correct?
Cash value accumulations have a guaranteed minimum interest rate
Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?
Cause of death must be from a job-related injury
An agent does NOT need to notify the Bureau of Insurance of a
Change of financial status
The principal source of information concerning an applicant's identity, age, and martial status is found in the
Completed application
The insurer's obligation to pay a claim depends on whether the insured or beneficiary has complied with all policy conditions. This makes the policy a (n)
Conditional contract
What must be given to a life insurance applicant when the agent receives an application and the initial premium?
Conditional receipt
Which report contains information regarding an individual's general reputation and credit standing?
Consumer report
If dividend option choices are offered on a whole life insurance policy, the policy MUST
Contain a statement that dividends are NOT guaranteed
Viatical settlement proceeds may be subject to the claims of
Creditors
Which life insurance policy option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?
Extended term nonforfeiture option
Mike applied for life insurance and was issued a conditional receipt. He is later found to be insurable and is issued a policy. When does his coverage become effective?
Date of issuance of the conditional receipt
What action may the Bureau of Insurance take when it finds that a license applicant is not competent or untrustworthy?
Decline to issue the license
What kind of life policy typically offers mortgage protection?
Decreasing term
Which of the following is generally a form of group credit life insurance?
Decreasing term insurance
Which of these life insurance policies does NOT contain a cash value provision?
Decreasing term life
An agent who makes derogatory remarks about another insurance company during the sale of insurance has engaged in
Defamation
An employer has a group life coverage for his employees. How would an employee in poor health be treated in this situation?
Eligible for the same type of coverage a s the other employees
Christopher is issued an insurance policy that contains an attached agreement which alters the terms of the policy. This attached agreement is called a(n)
Endorsement
Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends
Equal the net single premium for the same face amount at the insured's attained age
Which statement concerning an adjustable life insurance policy is FALSE?
Evidence of insurability is required when there is a change in premium
When an applicant applies for a large amount of life insurance coverage, which of the following would likely NOT be an underwriting requirement?
Eye examination
Which of the following is considered an unfair claims settlement practice?
Failure to investigate or pay legitimate claims
What are premiums for group credit life insurance based on?
Flat rate unrelated to the borrower's age
The Rules Governing Advertisement of Life Insurance and Annuities were created to provide
Full disclosure to the public of all material and relevant information
A large corporation pension plan purchased an accumulation annuity contract where all of the participating employees received certificates of participation. What is this contract called?
Group deferred annuity
The unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called
Implied authority
Which of these statements is NOT true regarding a cash value loan against a life insurance policy?
Interest payments made by policyowner are deductible
In Virginia, an insurance agent's appointment
Is in effect until termination
How much is normally paid to a policyowner in a life (viatical) settlement?
Less than the death benefit
During the early of a whole life insurance policy, the cash value will normally be
Less than the total premiums paid
What type of premiums are associated with individual mortgage protection life insurance policies?
Level premiums
Laura added a children's rider to her life insurance policy. What type of coverage was added?
Level term
The ____ is required to notify the Bureau of Insurance of a licensee's change of name or address.
Licensee
Which of these is NOT relevant when determining the amount of personal life insurance needed?
Local unemployment rates
Tim is confined to a nursing home but doesn't have a terminal illness. Which life insurance rider is designed to help pay for this type of expense?
Long-term care benefit rider
Defamation can be best defined as
Making a statement that is false or maliciously critical of the financial condition of an insurer
An insurable interest in each other's lives may exist in absence of an economic interest when the individuals are
Marriage partners
According to the Rules Governing Advertisement of Life Insurance and Annuities, an agent may NOT take which of the following actions during a sales presentation?
Mentioning guaranteed policy dividends
An agent who informs an applicant that there ae no exclusions in an insurance policy has engaged in
Misrepresentation
Sarah, age 88, is a life annuitant who has lived beyond her life expectancy. The funds for additional benefit payments will be derived primarily from funds that were
Not distributed to life annuitants who died before life expectancy
A licensed business entity acting as an insurance agent MUST
Notify the Bureau of Insurance of any fictitious name used
Which of these would likely be considered an Unfair Claims Settlement Practice?
Offering settlements that are less than the fair value to offset insurer expenses
Which action will trigger a penalty tax on premature distributions from a modified endowment contract (MEC)?
Policy loans
These are all accurate statements regarding universal life insurance EXCEPT
Policy loans are not permitted
What happens to a life insurance policy when the policy loan balance exceeds the cash value?
Policy will no longer be in force
How is the insured protected if a payor benefit rider is attached to the life insurance policy?
Premium payments are waived in the event the premium payor dies or becomes disabled
In Virginia, which of the following records are not required to be maintained by an agent?
Premium quotes for policies not accepted
What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?
Primary Insurance Amount (PIA)
When a producer submits an application that discloses personal information rearding the applicant, who supplies the privacy notice?
Producer
B the agent recently had her license terminated because she did not meet continuing education requirements. She may successfully appeal this decision IF
Proof of compliance is provided
Which benefit can be found in an equity indexed annuity, but not in a fixed annuity?
Protection against long-term inflation
Which of the following is NOT a dividend option for a life insurance policy?
Receiving the entire policy cash value
What happens to the death benefit of a life insurance policy if the insured elects a partial payment from the accelerated (living) benefit provision?
Reduced
What could be the potential result of taking out a cash value loan under a life insurance policy?
Reduces the amount receivable upon surrender of the contract
A life insurance policy's waiver of premium rider has the ability to
Relieve the insured of premium payments following an initial waiting period after the insured becomes totally disabled
Which of the following would prevent a person from obtaining a Virginia resident agent license?
Residing in a state outside of Virginia
Which of the following would NOT have a restricted ability to enter into a contract?
Small employer
Which life insurance policy provision prohibits a beneficiary from "commuting, encumbering, withdrawing, or assigning" any portion of the proceeds prior to actual receipt from the company?
Spendthrift clause
XYZ Corp gives money to an employee to purchase a life insurance policy and allows the employee to select the beneficiary. What kind of plan is this?
Split-dollar
Which of the following entities does NOT establish regulations for variable insurance products?
State attorney general
All of these statements concerning group credit life insurance are false EXCEPT
The face amount is based on the outstanding loan balance
A life insurance policy advertisement may contain
The insurer's name
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The transfer of Rick's IRA account balance to his surviving spouse qualifies for
The marital deduction
What happens when a policyowner borrows against the cash value of his life insurance policy?
The policy proceeds would be reduced by the outstanding loan balance
An insurer MUST charge the same individual life insurance premium for two individuals who share
The same risk class and have equal life expectancy
Who is the beneficiary in a life insurance policy?
The stated person or entity who is designated to receive the death proceeds
Which type of coverage is exempt to the rules pertaining to senior-specific certifications and professional designations?
Title insurance
Which of these is NOT a reason to buy a term life policy?
To accumulate savings
A policyowner is permitted to take out a policy loan on a whole life policy at what point?
When the policy has a cash value
Persuading an insured, to the insured's detriment, to switch policies is called
Twisting
Every ___ year(s), an agent's license in Virginia must be renewed.
Two
Which situation does NOT require an agent to provide a suitability statement to the annuity company?
When an agent discusses annuities in general with a client, but no specific recommendation is made
When must an agent report a felony conviction to the Bureau of Insurance?
Within 30 calendar days
How long can an insurer legally defer paying the cash value of a surrendered life insurance policy?
6 months
Which of these is NOT an advantage of term life insurance?
A cash benefit will be provided if the insured is alive at the end of the policy period
After an applicant reads and signs an insurance application, he/she should be conscious of the fact that
A false statement could lead to loss of coverage
Which of the following combinations best describe a universal life insurance policy?
A flexible premium deposit fund and a monthly renewable term insurance policy
A prospective client was intimidated by an agent to purchase an insurance contract. The agent could be found guilty of
Coersion