AZ Insurance Exam #1333 (Latest 2024/ 2025 Update) Questions and Verified Answers| 100% Correct| Grade A
AZ Insurance Exam #1333 (Latest 2024/ 2025
Update) Questions and Verified Answers|
100% Correct| Grade A
Q: a terminally ill policy owner decides to sell his life insurance policy at a discount to help
support his family. this sale is called a(n)
Answer:
viatical settlement
Q: the administrator for a corporate pension plan bought an accumulation annuity contract for
its 2,000 employees. all 2,000 employees received certifi- cates of participation. what kind of
contract is this?
Answer:
group deferred annuity
Q: a producer is proposing that a policy owner replace an existing individual health insurance
policy with a new one. under the new contract, a pre existing conditions exclusion
Answer:
may reduce the insureds benefits
Q: all of these are considered features of whole life insurance EXCEPT
Answer:
initial premium is lower than for an equivalent amount of term insurance
Q: what happens when a policy owner borrows against the cash value of his life insurance
policy?
Answer:
the policy proceeds would be reduced by the outstanding loan balance
Q: the automatic premium loan provision can be accurately described as
a
Answer:
provision that provides a policy loan to pay any premiums by the end of the grace period
Q: which of the following would permit an insurer to delay a covered disability policy claim?
Answer:
elimination period
Q: the disability income policy most likely to have been issued on a substan- dard basis is
Answer:
non-cancelable with a health condition exclusion rider
Q: medicaid will pay for nursing home expenses under what condition?
Answer:
must have financial need
Q: when premiums are determined, one factor would be the expenses of the
Answer:
insurer
Q: which of the following involves sharing an uncertain risk with another similar group?
Answer:
transfer
Q: which of these may encourage adverse selection in an indemnity dental plan?
Answer:
having multiple or periodic open enrollment periods
Q: what type of life insurance policy covers two or more persons and pays the face amount
upon the death of the first insured?
Answer:
joint life
Q: the owners cost basis for a non-qualified deferred annuity is typically the same as the
Answer:
total premiums paid
Q: the absolute assignment of a life insurance policy results in
Answer:
all incidents of ownership transferred to the assignee
Q: a Health Reimbursement Arrangement MUST be established
Answer:
by the employ- er
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A life insurance policy owner would like a dividend option that resulted in a limited current outlay of funds which dividend option would be chosen reduction of premium payment
Which of the following disability Byselle agreement is best suited for business with a limited number of partners cross purchase agreement
she had a recently been terminated from his job that covered in prayer group, life insurance. How long does he have to convert his coverage to an individual policy? 31 days
Which of these is not considered a federal punishment, unfair, and deceptive insurance practices Community service
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
when a lapsed policy is premium has been paid current it has the potential of being reinstated
What effect to get in long-term care benefit rider having a life insurance policy? reduced death benefit
The age discrimination in employment act provides protection for employment discrimination, beginning at what age 40
Someone who is license to negotiate a life settlement contract is called what Life, settlement broker
In what situation could an insurance policy coverage be modified applicant is a substandard risk
He life policy, spendthrift clause would have no effect of the beneficiaries paid the proceeds as a lump sum payment
Which of these is not an underwriting responsibility of a life insurance agent? Determining the final reclassification
Which statement concerning a decreasing term life policy is accurate Face amount decreases over the policy.
I New Hampshire, The human Immunodeficiency virus consent form Must disclose who will be receiving a copy of the test results
Which of the following accurately describes in participating insurance policy Policy owners may be entitled to receive dividends
He qualified profit, sharing plan is designed to distribute a portion of company earnings to its employees
Producer has indicated to a potential client of the proposed life insurance policy is covered by the New Hampshire life and health insurance guaranty association. This action taken by the producer is. prohibited by law
Turn the application process a statement made by an applicant that becomes part of the contract is considered to be a Warranty
What is payable to the policy owner of a whole life policy is surrendered prior to its maturity date The cash value
Failure to meet the continuing education credit requirements in New Hampshire may result in Non-renewal of the license
How is the insured protected if a pair of benefit rider is attached to the life insurance policy premium payments are waived in the event, the premium payor dies, or becomes disabled
An applicant Samantha, life insurance application for 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
The applicant is part of the annuity contract according to the Entire contract clause
And insurance application requires an application to make a full accurate disclosure to the risk factor involved using this criteria an insurance policy is considered what type of contract Contract of utmost good faith
Who is required to notify the commissioner of a licensees change of address Licensee
The conversion option for group term insurance may be exercised by an employee Within 30 days of termination employment
Which statement is incorrect concerning a tax shelter annuity annual investment gains are included in participants, gross income
What type of life insurance policy covers two or more persons, and pays the face amount upon the death of the first insured Joint life
Which of these is not an unfair claims settlement practice offering to settle a claim by arbitration
I New Hampshire false advertising is an example of Misrepresentation
How are qualified Roth IRA distributions normally treated for tax purposes Received income tax free
Which statement regarding whole life insurance is accurate Insurance coverage continue for life
How long does protection normally extent under a limited pay whole life policy? Until age 100
What happens to the purchasing power of benefit payments from fixed life annuity when the cost of living goes up? Decreases
which of the following is not an intended use of annuity create new funds upon the death of a wage earner
for insurance purposes, similar objects which are exposed to the same group of pearls are referred to as homogeneous exposure units
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate The premium to purchase the coverage comes from the policy’s cash value
Interest is credited to a fixed annuity no lower than the contract guaranteed rate
Which of the following is not information needed to determine the suitability of an annuity recommendation level of education
Which of these statements accurately portrays an adjustable life insurance policy Policy can alternate between forms of term and whole life insurance
Which of the following would you most likely purchase an immediate annuity? Retiree having a lump sum to invest
The contractual rights which allow the owner of a deferred annuity to surrender the cash value several years before the annuity they are called Nonforfeiture options
An agent gives a dish and a receipt to client for an insurance policy after collecting the initial premium. When will the policy become effective. When the conditions of the receipt or met
All of these are considered features of whole life insurance, except Initial premium is lower than for an equivalent amount of term insurance
Which of the following describes the active insuring a risk against possible loss Risk transfer
The principal source of information concerning an applicants identity age in martial status is found in the completed application
Traditional individual retirement annuity, distributions must start by April 1st of the year following the year the participant attains age 70 1/2
A single life annuity only has one Annuitant
what is another term for pure life annuity Life Income
A(n) insurer writes business in a state other than the one in which it is domiciled foreign
How long can an insurer legally defer paying the cash value of a surrendered life insurance policy? 6 months
upon meeting company requirements, a lobster life insurance policy may be reinstated for up to years 3 years Which of these pays an income to two or more annuitants until the death of the last annuitant Joint and survivor annuity A life insurance policy provision that has the ability to reduce. The death benefit is called the. Accelerated (living) benefit Which of the following to be a future use of the cash value that feilds and I recently purchased whole life insurance policy Provide supplemental income in 35 years How long do most states allow an insurance company to delay the payment of a cash surrender under the Delayed Payment provision? 6 months What is the guaranteed cash value of a whole life insurance policy when the insured turns 65 years old? Less than the policy’s face amount Under the law of agency, the principal is considered to be insurer In New Hampshire the age discrimination in employment act rules apply to employer groups with at least 15 or more employees a terminally ill policy owner decides to sell his life insurance policy at a discount to help support his family. The sale is called. viatical settlement Which of these is not considered a type of limited payment whole life insurance? Endowment at age 70 John bought a deferred annuity on Mary. John amends the contract years later to name Tom as the recipient of the proceeds if Mary dies. Who is the annuitant for this contract? Mary How may an insurance company classify an accidental death benefit on a life policy? As an optional policy rider A statement MUST be signed by the for any illustrations used in the sale of a life insurance policy. producer
Wyatt is shopping for life insurance and is mainly concerned with the policies death benefit which index should he be looking at when making comparisons net payment cost index
The life and health insurance guaranty association, fund protects, and insured in the event of The ensures insolvency
Mike applied for life insurance and was issued a conditional receipt. He’s later found to be insurable anna’s issue the policy. When does his coverage become effective Date of issuance of the conditional receipt
Which of these is a true statement regarding survivor benefits under qualified retirement plan Survivor benefits can only be waived with the written consent of a married employee’s spouse
Which statement concerning a deferred annuity contract is correct The owner can be the beneficiary, annuitant, or neither
A producer sold a life insurance policy but did NOT provide the applicant with a basic illustration. In this situation, the insurer is REQUIRED to provide the applicant with a policy summary no later than the policy delivery date
In what way is a life insurance policy affected by an accelerated benefit payment? Decreases the death benefit
A life insurance policy may be legally backdated in New Hampshire for up to months 6 months which life insurance policy provision allows a policyowner to cancel the policy and receive a full refund within a limited time Period after policy delivery Free-look period taking a sum of money and decreasing it in size is called capital liquidation Joe is a life insurance policyowner who has failed to pay interest on his policy loan. What will result from this nonpayment? Loan amount is increased to reflect the amount of interest due in New Hampshire false advertising is an example of misrepresentation “The time limit an individual has to “”rollover”” funds from an IRA or qualified plan is” 60 days The death proceeds of a credit life insurance policy are typically paid to the lender How are monthly life annuity benefit payments treated under a tax sheltered annuity (TSA)? Taxed as ordinary income in the year received When a sum of money undergoes capital liquidation, that sum will decrease in size How are level term policies able to provide level premiums? Premiums are averaged over the term of the policy If an employer pays for accidental death and dismemberment insurance for its employees, the amount paid by the employer is generally tax deductible to the business a life insurance policy’s contingent beneficiary is the person who receives the death benefits if the primary beneficiary dies before the insured Which tax is normally associated with an individual’s death? Federal estate tax what is a juvenile life insurance policy A life policy that covers the life of a minor charging different premiums to policyholders in the same risk classification is referred to as Unfair discrimination First-time homebuyers are able to withdraw up to how much from their qualified IRAs without incurring the 10% early withdrawal penalty?$2,500 $5,000 $7,500 $10,000 $10,000 which of these is not considered the responsibility of a producer during the underwriting process Selecting the final approval date Peter age 50 surrenders, his modified endowment contract. How is the gain treated in terms of federal income taxes The GAIN is treated as a taxable income and a penalty tax is imposed on the GAIN When does the owners contractual rights begin under an individual annuity contract at the time of purchase What is the face amount for a $50,000 graded death benefit life insurance policy when the policy is issued under $50,000 initially, but increases overtime Life settlement proceeds may be subject to the claims creditors 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 Insurable interest in one’s own life is legally considered as generally unlimited After an insurance application has been originated the producer normally is the major personal contact to the insured When a business entity is licensed in New Hampshire, a licensed _ must be designated as responsible for compliance with state, insurance, laws and regulations producer
what is the best way to define life insurance replacement a transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered
Security laws passed by Congress are enforced by which Federal agency? Security and Exchange Commission
the main purpose of an annuity is to create a stream of income
A licensee whose name or address changes must notify the Commissioner within 30 days
A(n) company is licensed by the commissioner to conduct insurance business in NH. authorized
A retired couple would like to maximize the income derived from their life savings and have it payable until they both die. Which annuity would be their best choice?Fixed annuity Survivorship annuity Joint life annuity Joint and survivor annuity Joint and survivor annuity
which statement best describes a single premium whole life policy Paid-up policy that offers lifetime protection
A(n) __ insurer may sell insurance contracts in NH. authorized the exclusion ratio determines the amount of an annuity payment subject to income tax How can an insurance company minimize exposure to loss? Reinsuring risks Dividends from a stock insurance company are normally sent to shareholders which life insurance settlement option pays lifetime benefits to two or more people Joint and survivor in NH a temporary license may be issued for a period not to exceed _ days 180
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the marital deduction
Any employee insured under a group life insurance plan is normally covered with term life insurance
XYZ Corp has implemented a qualified retirement plan. This plan may NOT discriminate in favor of highly compensated employees
Assets that back the non-guaranteed values of variable life insurance products are held in which account? Separate account set up by the insurer
A life insurance policy that includes a return of premium rider will pay the beneficiary how much upon the insureds death Total premiums paid plus the policy face amount
With life insurance, the needs approach is used primarily in determining how much life insurance a client should apply for
In NH if an individual engages in transacting insurance business and acts without the proper state license this is considered Class A misdemeanor
An order issued by the commissioner that prohibits a specific practice listed in the order is called a(n) Cease and desist order
whose interest are being protected under replacement rules policyowner
what is the maximum number of employees that an employer can have in order to start a simple retirement plan 100
under which circumstances may an insurable interest exist between two individuals in absence of an economic interest marriage partners
The reason for backdating a policy is to obtain a premium rate based on an earlier age
An employer that offers a qualified retirement plan to its employees is eligible to make tax-deductible contributions to the plan
which of the following is true regarding a person receiving a waiver of premium benefit The insured must be disabled for a period of time