XCEL FINAL EXAM
a condition that may increase the likelihood of a loss occurring
A hazard can be best described as
the face amount of the policy is the limit of liability in a life insurance policy
A life insurance policy's limit of liability would be
Pure risk
A situation in which there is ONLY a chance of loss or no loss is a
An insured suffers a financial loss in the state lottery
According to the California Insurance Code, which of the following is NOT an example of insurable event
Denial of a claim based on reckless behavior
According to the California code governing claim settlement practices, which of the following is NOT considered to be an act of unfair discrimination
Reinstatement provision
After a policy has lapsed, which provision allows the insured to continue coverage
Attending Physcian Statement
An applicant has revealed conditions that require more information Which of the following is needed next
Reinsurance
An insurer enters into a contract with a third party to insure itself agisnt losses from insurance policies it issues. what is theis agreement called
solicitor
Anyone employed in California to assist an insurance agent in transacting insurance is called an insurance
60
Cindy buys a 10-year certain annuity with an installment refund. After receiving monthly payments for 5 years. Cindy dies. How many remaining payments will the insurer make to her beneficiary.
100%
Employee participating in a noncontributory group life must be
Tax-deductible by the employer
Employer contribution to qualified plans
50,000
Employer-Provided Group term life insurance is exempt form income taxation up to
Policy Exclusions
How are acts of war and aviation treated under a group life insurance policy
Medical questions must be answered on individual life insurance
How does underwriting differ between group life and individual insurance
5 years
How long must life agents keep their transaction records
Foreign Insurer
In California, an insurer organized under the state laws of Oregon is called an
Policy and attached application
In a Life Insurance policy, the entire contract consits of
10%
In a modified endowment contract, the penalty tax imposed on premature withdrawal is
at all times
Insurance agents and brokers must make their insurance records available to the commissioner
Jim must still disclose the conviction on his insurance license application pursuant to California penal code you are required to report a conviction that was later expunged
Jim is applying to become an insurance agent and has past misdemeanor conviction that was later expunged due to California penal code 1203.4 which of the following statement is correct
Second to die policy cover two lives, but the benefit is paid upon the death of the las surviving insured.
John and Mary have a handicapped child that is dependent upon them. The death of one of the parents would not be financially disastrous, however the death of both likely would be, Which policy would be best suited for them
annually
Life insurance surplus must be distributed to policyowners at what frequency
Renewable term
Lynn owns a life policy that guarntees the right to renew the policy each year, regardless of health but at an increased premium, What kind of policy is this.
Increased chance of a loss because of an insured dishonest tendencies
Moral Hazard is described as the
Marketing
One important function of an insurance company is to identify and sell to potential customors, Which of these BEST describes this function
unnecessary replacement
Pual has an existing annuity and is sold a new one, in which teh new policy holds no greater financial benefit to him than the existing contract
10-30
The California Insurance Code allows an individual how many days to cancel a life policy for a full refund
Life and Health insurance providers
The Medical Information Bureau consists of
30 days
The free-look period for life insurance policyowners age 60 0r older is
Materiality of concealment
The importance of a representation is demonstrated inw hat rule
annuity
The systematic Liquidation of a sum of money is provided by
Medical ailments discovered during the underwriting process
What are members of the medical Information bureau MIB required to report
employer stock ownership plan (ESOP)
What does ESOP stand for
make a premium payment after the due date without any loss of coverage
What does the grace period allow a life insurance policy owner to do
Purchase additional coverage with no evidence of insurability required
What does the guaranteed insurability option allow an insured to do
Presentation of policy feature that includes non guaranteed elements
What does the term Illustration mean when used in the phrase life insurance policy illustration according to the California insurance code
Help an agent or broker sell insurance
What is an insurance solicitor authorized to do
to protect the risk of outliving their financial resources
What is common reason people purchase an annuity
sign a consent form
What must an applicant do in order to authorize the release of an attending physician report
Incontestability Clause insueres are prohibited from denying claims or rescinding a policy based on misstatements in a life, accident or disability policy application after the policy has been in force for two years
What prevents a life insurance policy from being rescinded by the insurer after being in force for two years
Grace period
What time period allows an insured's life insurance policy to remain in force even if the premium was not paid on the due date
mortality
When Calculating life insurance premium rates, which component is affected by an insured's age and gender
Underwriting
When an applicant applies for insurance, the process by which the insurer determines whether to issue a policy is called
Insurer's expenses agents comission is condered part of the insueres expense and is a component of the premium
When calculating life insurance premium rates, which component would an agent comission fall under
Insured becomes totally disabled
When does a life insurance policy waiver of premium take effect
Grace Period
Which Policy Provision protect the policy owner from unintentional lapse of the contract
Dividends
Which of teh following is Not a component of determining policy premiums
Medicare
Which of the followind does the California Department of Insurance CDI have no juridiction over
Part of the premium is paid by the employee
Which of the following describes a contributory insurance plan
Statements that all values and benefits are guaranteed
Which of the following does NOT have to be included on life insurance policy illustrations
Dividend schedule
Which of the following does a policy owner NOT have a right to change
Insurer's financial rating
Which of the following does the California Insurance Code NOT require an insurance policy to specify
Increases the unearened premiums reserve
Which of the following is NOT a characteristic of reinsurance
Offers a maximum interest rate that increases annually
Which of the following is NOT a feature of equity-index annuities
Premiums
Which of the following is NOT an insurer policy expense
Advising a claimant to hire an attorney
Which of the following is NOT considered to be an unfair claims settlement practice.
Reinsurance
Which of the following is a type of insurance where an insurer transfers loss exposure from policies written for its insureds
captive insurer
Which of the following is an insurer established by a parent company for the purpose of the insuring the parent company's loss exposure
Loss Exposure are situations which have the potential for loss
Which of the following is considered to be any situation that has the potential for loss
an individuals civic organization memeberships
Which of the following pieces of information is NOT gathered during personal financial planing process
Speculative Risk
Which type of risk is gambling
May
Which word implies permissiveness according to the California insurance code
Insurer and employer
Who are the parties to the master contract in a group life insurance policy
Individual wanting to sell their life policy to a third party
Who does a life settlement broker represent
Participant
Who is issued a certificate of insurance with a group insurance policy
the Free look period begins on the policy delivery date
Why is a life insurance policy's delivery date important
Intrest Option
a Beneficiary receives only the death benefit earning in which settlement option
only one party (the insurers) makes any kind of legally enforceable promise
a Unilateral contract is one in which
an offer, acceptance of the contract terms
a contract require
Non Forfeiture Options
a life insurance policy can be surrendered for its cash value under which policy provison
Endowment policy
a life insurance policy that pays the face amount if the insured survives to a specified period of time is called
Mutual Insurer
a participating company is also referred to as which type of insurer
Consumer's Report
a report which is based on creditworthiness and personal characteristics that influences an insurance applicant's eligibility for life and health insurance is called
Only before the insurance is in effect
a represention may be altered or withdrawn
Materiality is relevant inoramtion that would probably influence an insurer's assessment of a proposed contract
according to the califronia insuarnce Code what term is used to describe a fact so important it could affect the policy premium
Individual policies
all of the following are considered characteristic of group life insurance EXCEPT
unfair method of competition
an agent has advertised that the insurer to which the agent is appointed with is a member of the insurance Guarantee Association, This agent has committed an
conservation
an agent's attempt to stop the replacement of an existing life insurance policy is known as
Exclusion ration
an annuitant would like to determine the amount of an anuity distribution that is exempt from taxation. What is used to calculate this?
an annuity which is backed by a life insurer's seperate account is called a variable annuity
an annuity which is backed by a life insurer's separate account is called
Unfair Discrimination
an insurer that has been found using higher rates based on race, religion or ethnicity is said to be engaging in
Non-deductible contributions and tax free distributions
how are Roth IRA's treated for Tax Purposes
Exempt from federal income taxes
how are death benefits that are recieved by a beneficiary normally treated for tax purposes
Interest option
pam is the primary beneficiary of a life insurance policy and wants to let the death benefit accumulate and receive only the monthly investment proceeds. Which settlement option should she choose.
self funded
the California Life and Health insurance Guarntee Association cover all of these types of Policies, EXCEPT
Modified premiums, ordinary life, single premiums
what is the proper order of initial life insurance premiums from lowest to highest
Fudiciary
when handling premiums for an insured, an agent is actin gin which capacity
Fudiciary
when handling premiums for an insured, an agent is acting in which capacity
Rescission of contract , whether intentional or unintentional entitles the injured party to rescind insurance
when intentional concealment is involved what course of action is the injured party entitled to
Rescinding a contract
which course of action is the insurer entitled to when deliberate concealment is committed by the insured
Extended Term
which of the following is NOT a life insurance settlement option
The loss must be catastrophic.
which of the following is NOT an element of insurable risk
Insurers
which of the following is NOT protected under the California Life and Health Guarantee Association
extended term
which of the following is not a common life insurance policy rider
Only children born prior to policy's issue date may be included
which of the following statements do NOT apply to child coverage in family policy
a dividend option is selected by the insured at the time of policy purchase
which statement is true regarding policy dividends
