https:\/\/learnexams.com\/search\/study?query=<\/a><\/p>\n\n\n\nT is covered by an Accidental Death and Dismemberment (AD&D) policy that contains an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?<\/p>\n\n\n\n
Request will be accepted only if in writing by the insured<\/p>\n\n\n\n
Change will be made only if premiums are paid current<\/p>\n\n\n\n
Change will be made immediately<\/p>\n\n\n\n
Request of the change will be refused
Request of the change will be refused<\/p>\n\n\n\n
Which statement about group life insurance is INCORRECT?<\/p>\n\n\n\n
Cost can be shared between employer and employee<\/p>\n\n\n\n
Each participant requires evidence of insurability<\/p>\n\n\n\n
A minimum number of employees participating may be required<\/p>\n\n\n\n
Employer is issued a master policy
Each participant requires evidence of insurability<\/p>\n\n\n\n
Which of the following is NOT guaranteed in a whole life policy?<\/p>\n\n\n\n
Settlement options<\/p>\n\n\n\n
Nonforfeiture options<\/p>\n\n\n\n
Dividend scale<\/p>\n\n\n\n
Policy loan values
Dividend scale<\/p>\n\n\n\n
When an applicant applies for a large amount of life insurance coverage, which of the following would likely NOT be an underwriting requirement?<\/p>\n\n\n\n
Consumer report<\/p>\n\n\n\n
Eye examination<\/p>\n\n\n\n
Urine sample<\/p>\n\n\n\n
Blood sample
Eye examination<\/p>\n\n\n\n
The principal source of information concerning an applicant’s identity, age, and martial status is found in the<\/p>\n\n\n\n
MIB<\/p>\n\n\n\n
credit report<\/p>\n\n\n\n
policy summary<\/p>\n\n\n\n
completed application
completed application<\/p>\n\n\n\n
A life insurance policy’s waiver of premium rider has the ability to<\/p>\n\n\n\n
waive the premium payments in the event the insured becomes financially insolvent<\/p>\n\n\n\n
relieve the insured of premiums payments following an initial waiting period after the insured becomes totally disabled<\/p>\n\n\n\n
provide a policy loan to cover the premium payments in the event the insured becomes totally disabled<\/p>\n\n\n\n
waive the premium on this policy as well as any other insurance policies belonging to the insured in the event of total disability
relieve the insured of premiums payments following an initial waiting period after the insured becomes totally disabled<\/p>\n\n\n\n
Which of these is NOT considered the responsibility of a producer during the underwriting process?<\/p>\n\n\n\n
Collecting additional medical information if needed<\/p>\n\n\n\n
Promptly sending the completed application to the insurance company<\/p>\n\n\n\n
Forwarding any material personal observations to the insurer<\/p>\n\n\n\n
Selecting the final approval date
Selecting the final approval date<\/p>\n\n\n\n
What would be the disadvantage of naming a trust as a beneficiary of a life insurance policy?<\/p>\n\n\n\n
Trusts cannot be formed for life insurance purposes<\/p>\n\n\n\n
Trust administration fees would reduce policy proceeds<\/p>\n\n\n\n
Trust cannot be used if a minor is the beneficiary<\/p>\n\n\n\n
Trustee must be a bank or brokerage
Trust administration fees would reduce policy proceeds<\/p>\n\n\n\n
Which statement regarding a fixed period settlement option is correct?<\/p>\n\n\n\n
The insurance company dictates each installment payment amount<\/p>\n\n\n\n
A fixed period settlement option can pay no longer than 20 years<\/p>\n\n\n\n
The installment payment amount is determined by the total number of installments<\/p>\n\n\n\n
The insurance company dictates the total number of installment payments
The installment payment amount is determined by the total number of installments<\/p>\n\n\n\n
What must be given to a life insurance applicant when the agent receives an application and the initial premium?<\/p>\n\n\n\n
Agent’s report<\/p>\n\n\n\n
Conditional receipt<\/p>\n\n\n\n
Commission disclosure<\/p>\n\n\n\n
Good health statement
Conditional report<\/p>\n\n\n\n
What would be a valid reason for naming a trust as the beneficiary of a life insurance policy as opposed to naming an individual?<\/p>\n\n\n\n
Avoiding probate<\/p>\n\n\n\n
Management of proceeds would be provided<\/p>\n\n\n\n
Trustee can pay off any existing policy loans<\/p>\n\n\n\n
More settlement options available with a trustee
Management of proceeds would be provided<\/p>\n\n\n\n
An individual, age 45, would like to help pay for his daughter’s college expenses in 10 years. Which annuity would be appropriate for this individual?<\/p>\n\n\n\n
Joint and survivor annuity<\/p>\n\n\n\n
Deferred annuity<\/p>\n\n\n\n
403(b) plan<\/p>\n\n\n\n
Immediate annuity
Deferred annuity<\/p>\n\n\n\n
The interest credited to the cash values of personally-owned non-qualified annuities is considered<\/p>\n\n\n\n
a tax credit<\/p>\n\n\n\n
tax-deferred<\/p>\n\n\n\n
tax-deductable<\/p>\n\n\n\n
tax-exempt
tax-deferred<\/p>\n\n\n\n
The reason for backdating a policy is<\/p>\n\n\n\n
to avoid being considered a substandard risk due to a recent cancer diagnosis<\/p>\n\n\n\n
to obtain a premium rate based on an earlier age<\/p>\n\n\n\n
to decrease the face amount<\/p>\n\n\n\n
to decrease the Contestable period
to obtain a premium rate based on an earlier age<\/p>\n\n\n\n
Which statement concerning an adjustable life insurance policy is FALSE<\/p>\n\n\n\n
Cash surrender is possible<\/p>\n\n\n\n
Evidence of insurability is required when there is a change in premium<\/p>\n\n\n\n
Combines term and permanent insurance into a single plan<\/p>\n\n\n\n
An extra premium paid is allowable
Evidence of insurability is required when there is a change in premium<\/p>\n\n\n\n
Which of these statements is NOT true regarding a cash value loan against life insurance policy?<\/p>\n\n\n\n
Interest normally accrues on unpaid balances<\/p>\n\n\n\n
Loan cannot exceed the policy’s cash value<\/p>\n\n\n\n
Policy contract terms dictate the interest rate<\/p>\n\n\n\n
Interest payments made by policyowner are deductible
Interest payments made by policyowner are deductible<\/p>\n\n\n\n
What happens to the death benefit of a life insurance policy if the insured elects a partial payment from the accelerated (living) benefit provision?<\/p>\n\n\n\n
None will be given<\/p>\n\n\n\n
Increased<\/p>\n\n\n\n
Reduced<\/p>\n\n\n\n
No change
Reduced<\/p>\n\n\n\n
Which life insurance policy option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?<\/p>\n\n\n\n
Reduced paid-up nonforfeiture option<\/p>\n\n\n\n
Accelerated benefits option<\/p>\n\n\n\n
Extended term nonforfeiture option<\/p>\n\n\n\n
Cash surrender option
Extended term nonforfeiture option<\/p>\n\n\n\n
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)<\/p>\n\n\n\n
accelerated death benefit<\/p>\n\n\n\n
assignment<\/p>\n\n\n\n
viatical settlement<\/p>\n\n\n\n
nonforfeiture option
vatical settlement<\/p>\n\n\n\n
In what way is life insurance policy affected by an accelerated benefit payment?<\/p>\n\n\n\n
Decreases the premiums<\/p>\n\n\n\n
Extends the grace period<\/p>\n\n\n\n
Increases the policy loan balance<\/p>\n\n\n\n
Decreases the death benefit
Decreases the death benefit<\/p>\n\n\n\n
Which statement regarding whole life insurance is accurate?<\/p>\n\n\n\n
Cash value loans are not permitted<\/p>\n\n\n\n
Insurance coverage can continue for life<\/p>\n\n\n\n
Policy normally matures at retirement<\/p>\n\n\n\n
No cash value accumulations
Insurance coverage can continue for life<\/p>\n\n\n\n
Which of the following could be a future used of the cash value that builds in a recently-purchased whole life insurance policy?<\/p>\n\n\n\n
Convert the cash value to a paid-up term policy<\/p>\n\n\n\n
Gives policyowner ability to borrow against funds within two years<\/p>\n\n\n\n
Increases the policy’s face amount<\/p>\n\n\n\n
Provide supplemental income in 35 years
Provides supplemental income in 35 years<\/p>\n\n\n\n
An advantage of owning a flexible premium life insurance policy would be<\/p>\n\n\n\n
Premiums are fixed for the first 5 years<\/p>\n\n\n\n
The insurer can make policy changes without difficulty<\/p>\n\n\n\n
The policyowner can make policy changes without difficulty<\/p>\n\n\n\n
Evidence of insurability is required with any change in premium
The policyowner can make policy changes without difficulty<\/p>\n\n\n\n
Which of these in NOT relevant when determining the amount of personal life insurance needed?<\/p>\n\n\n\n
Existing life insurance coverage<\/p>\n\n\n\n
Local unemployment rates<\/p>\n\n\n\n
Household income<\/p>\n\n\n\n
Household debt
Local unemployment rates<\/p>\n\n\n\n
Which statement regarding the joint survivor life insurance settlement option is NOT true?<\/p>\n\n\n\n
Age of the beneficiaries plays a factor when determining the payment amounts<\/p>\n\n\n\n
Income continues until the last beneficiaries can be paid<\/p>\n\n\n\n
Two or more beneficiaries can be paid<\/p>\n\n\n\n
The amount of each installment is larger than the single life income option
The amount of each installment is larger than the single life income option<\/p>\n\n\n\n
The beneficiary of a life insurance policy is normally selected by whom?<\/p>\n\n\n\n
Policyowner<\/p>\n\n\n\n
Contigent beneficiary<\/p>\n\n\n\n
Estate<\/p>\n\n\n\n
Insurance Company
Policyowner<\/p>\n\n\n\n
Tori has an annuity that pays her $500 per month income benefit for life or for ten years, whichever is longer. What kind of annuity is this?<\/p>\n\n\n\n
Fixed life annuity with period certain<\/p>\n\n\n\n
Variable life annuity with installment refund<\/p>\n\n\n\n
Fixed life annuity with cash refund<\/p>\n\n\n\n
Variable life annuity with period certain
Fixed life annuity with period certain<\/p>\n\n\n\n
Which life insurance settlement option pays a stated monthly benefit until both principal and interest are exhausted?<\/p>\n\n\n\n
Fixed amount installment option<\/p>\n\n\n\n
Fixed period installment option<\/p>\n\n\n\n
Life income option<\/p>\n\n\n\n
Interest only option
Fixed amount installment option<\/p>\n\n\n\n
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate?<\/p>\n\n\n\n
Evidence of insurability is required<\/p>\n\n\n\n
Coverage remains until death of the insured<\/p>\n\n\n\n
The premium to purchase the coverage comes from the policy’s cash value<\/p>\n\n\n\n
Cash value will continue to grow
The premium to purchase the coverage comes from the policy’s cash value<\/p>\n\n\n\n
How long do most states allow an insurance company to delay the payment of a cash surrender under the Delayed Payment provision?<\/p>\n\n\n\n
1 month<\/p>\n\n\n\n
2 months<\/p>\n\n\n\n
4 months<\/p>\n\n\n\n
6 months
6 months<\/p>\n\n\n\n
What would be considered an advantage of purchasing term life insurance?<\/p>\n\n\n\n
Cash value can be borrowed against<\/p>\n\n\n\n
The coverage is permanent<\/p>\n\n\n\n
Nonforfeiture values are available<\/p>\n\n\n\n
The initial premium is lower compared to an equivalent amount of whole life coverage
The initial premium is lower compared to an equivalent amount of whole life coverage<\/p>\n\n\n\n
What typically changes at the re-entry option date found in some term life policies?<\/p>\n\n\n\n
beneficiary<\/p>\n\n\n\n
amount of coverage<\/p>\n\n\n\n
premium<\/p>\n\n\n\n
contestable period
premium<\/p>\n\n\n\n
How long does one premium payment cover in a single premium whole life policy?<\/p>\n\n\n\n
Until the policy’s first renewal date<\/p>\n\n\n\n
One month<\/p>\n\n\n\n
One year<\/p>\n\n\n\n
Full life of the policy
Full life of the policy<\/p>\n\n\n\n
All these statements correctly describe an aleatory contract EXCEPT<\/p>\n\n\n\n
A legal waiver is considered an aleatory contract<\/p>\n\n\n\n
Potential unequal exchange of value for both parties<\/p>\n\n\n\n
Only one party makes any kind of legally enforceable offer<\/p>\n\n\n\n
Element of chance is involved
Only one party makes any kind of legally enforceable offer<\/p>\n\n\n\n
A retired couple would like to maximize the income derived from their combined life savings and have it payable until they both die. Which annuity would be their best choice?<\/p>\n\n\n\n
Fixed annuity<\/p>\n\n\n\n
Survivor annuity<\/p>\n\n\n\n
Joint life annuity<\/p>\n\n\n\n
Joint and survivor annuity
Joint and survivor annuity<\/p>\n\n\n\n
What type of life insurance policy covers two or more persons and pays the face amount upon the death of the first insured?<\/p>\n\n\n\n
Joint and survivorship<\/p>\n\n\n\n
Survivorship life<\/p>\n\n\n\n
Universal life<\/p>\n\n\n\n
Joint life
Joint life<\/p>\n\n\n\n
If an insured dies during the grace period without having paid the premium, how much will the insurer pay?<\/p>\n\n\n\n
Policy’s face amount<\/p>\n\n\n\n
Total premiums paid will be returned<\/p>\n\n\n\n
Policy’s face amount minus any premiums due<\/p>\n\n\n\n
Nothing
Policy’s face amount minus any premiums due<\/p>\n\n\n\n
A life annuity feature which provides benefit payments for a minimum number of years, no matter when the annuitant dies, is called?<\/p>\n\n\n\n
fixed period<\/p>\n\n\n\n
period certain<\/p>\n\n\n\n
installment refund<\/p>\n\n\n\n
straight life
period certain<\/p>\n\n\n\n
When a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice?<\/p>\n\n\n\n
Producer<\/p>\n\n\n\n
Insurer<\/p>\n\n\n\n
Underwriter<\/p>\n\n\n\n
Fiduciary
Producer<\/p>\n\n\n\n
What is considered the collateral on a life insurance policy loan?<\/p>\n\n\n\n
No collateral needed<\/p>\n\n\n\n
The policy’s cash value<\/p>\n\n\n\n
The policy’s face value<\/p>\n\n\n\n
The equity in a policy owner’s home
The policy’s cash value<\/p>\n\n\n\n
A life insurance policy provision that has the ability to reduce the death benefit is called the<\/p>\n\n\n\n
accelerated (living) benefit<\/p>\n\n\n\n
insuring clause<\/p>\n\n\n\n
payor benefit<\/p>\n\n\n\n
spendrift clause
accelerated (living) benefit<\/p>\n\n\n\n
K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?<\/p>\n\n\n\n
The date the sales appointment was made<\/p>\n\n\n\n
The date the application was submitted to the insurance company<\/p>\n\n\n\n
The date of application<\/p>\n\n\n\n
The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured
The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured<\/p>\n\n\n\n
A single premium deferred annuity sometimes contains a bailout feature. Which statement regarding this feature is correct?<\/p>\n\n\n\n
If the interest rate falls below a specified level, the surrender charge is waived<\/p>\n\n\n\n
If the interest rises above a certain level, the surrender charge is waived<\/p>\n\n\n\n
It allows the Life and Health Guaranty Association to bailout the insolvent insurer<\/p>\n\n\n\n
A reinsurer will make the remainder of the annuity payments if the original insurance company becomes insolvent
If the interest rate falls below a specified level, the surrender charge is waived<\/p>\n\n\n\n
Which of the following is an unincorporated association whose members provide coverage for one another?<\/p>\n\n\n\n
Self-insurer<\/p>\n\n\n\n
Lloyds<\/p>\n\n\n\n
Reciprocal<\/p>\n\n\n\n
Surplus lines
Reciprocal<\/p>\n\n\n\n
A life policy that has premiums that are lower than normal during the early years is called<\/p>\n\n\n\n
Decreasing term<\/p>\n\n\n\n
Modified life<\/p>\n\n\n\n
Variable life<\/p>\n\n\n\n
Limited-pay life
Modified life<\/p>\n\n\n\n
Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?<\/p>\n\n\n\n
Injury must have been suffered prior to a stated age<\/p>\n\n\n\n
Accidental bodily injury must have been the cause of death<\/p>\n\n\n\n
Cause of death must be from a job related injury<\/p>\n\n\n\n
Death must occur within a state number of days after the accident
Cause of death must be from a job-related injury<\/p>\n\n\n\n
At what point are death proceeds paid in a joint life insurance policy?<\/p>\n\n\n\n
When the first insured dies<\/p>\n\n\n\n
When the second insured dies<\/p>\n\n\n\n
Only after insurable interest has been confirmed to still exist<\/p>\n\n\n\n
If both insureds die from the same accident
When the first insured dies<\/p>\n\n\n\n
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?<\/p>\n\n\n\n
Cash value rider<\/p>\n\n\n\n
Viatical rider<\/p>\n\n\n\n
Accelerated (living) rider<\/p>\n\n\n\n
Long-term care benefit rider
Long-term care benefit rider<\/p>\n\n\n\n
Which of the following statements about the installments for a fixed period settlement option in life insurance policies is NOT true?<\/p>\n\n\n\n
The periodic payment amount is determined by the beneficiary’s age<\/p>\n\n\n\n
The shorter the period of time, the larger each installment<\/p>\n\n\n\n
The longer of period of time, the smaller each installment<\/p>\n\n\n\n
The installment payments are composed of both principal and interest
The periodic payment amount is determined by the beneficiary’s age<\/p>\n\n\n\n
What is an insurance contract that identifies individuals by relationship to a specific organization?<\/p>\n\n\n\n
Employer insurance<\/p>\n\n\n\n
Group insurance<\/p>\n\n\n\n
COBRA plan<\/p>\n\n\n\n
Industrial insurance
Group insurance<\/p>\n\n\n\n
Field underwriting by a producer<\/p>\n\n\n\n
is used to reduce costs to the insurer<\/p>\n\n\n\n
involves conducting a physical examination of the applicant<\/p>\n\n\n\n
may result in the disclosure of hazardous activities of the applicant<\/p>\n\n\n\n
is illegal in most states
may result in the disclosure of hazardous activities of the applicant<\/p>\n\n\n\n
When does the producer give a premium receipt for a life insurance application<\/p>\n\n\n\n
When the application has been approved<\/p>\n\n\n\n
When the initial premium has been paid with the application<\/p>\n\n\n\n
During the medical exam<\/p>\n\n\n\n
When the completed application has been collected
When the initial premium has been paid with the application<\/p>\n\n\n\n
Death benefits from a life insurance policy are normally considered<\/p>\n\n\n\n
exempt from federal income tax<\/p>\n\n\n\n
subject to the cost recovery rule<\/p>\n\n\n\n
subject to attachments from the insured’s creditors<\/p>\n\n\n\n
subject to the value-added tax
exempt from federal income tax<\/p>\n\n\n\n
What is the tax treatment of benefit payments for a non-qualified annuity?<\/p>\n\n\n\n
Benefit payments are always taxable<\/p>\n\n\n\n
Benefit payments are subject to taxes only prior to age 70 1\/2<\/p>\n\n\n\n
Benefit payments must begin at age 59 1\/2 to avoid a penalty<\/p>\n\n\n\n
Benefit payments received after 70 1\/2 are always tax-exempt
Benefit payments are always taxable<\/p>\n\n\n\n
An insurance policy that can also be classified as a securities product is called<\/p>\n\n\n\n
variable life<\/p>\n\n\n\n
modified life<\/p>\n\n\n\n
universal life<\/p>\n\n\n\n
a Modified Endowment Contract
variable life<\/p>\n\n\n\n
How much is normally paid to a policyowner in a life (viatical) settlement?<\/p>\n\n\n\n
Total premiums paid plus interest<\/p>\n\n\n\n
Full face amount<\/p>\n\n\n\n
More than the face amount<\/p>\n\n\n\n
Less than the death benefit
Less than the death benefit<\/p>\n\n\n\n
Which statement best describes a single premium whole life policy?<\/p>\n\n\n\n
Premiums that can only be paid from a single source<\/p>\n\n\n\n
A single premium that is due annually<\/p>\n\n\n\n
Paid-up policy that offers lifetime protection<\/p>\n\n\n\n
Paid-up policy that offers limited protection
Paid-up policy that offers lifetime protection<\/p>\n\n\n\n
Which of these occurrences could improve an insurer’s ability to reduce premiums?<\/p>\n\n\n\n
Expense factor increase<\/p>\n\n\n\n
Mortality rates increase<\/p>\n\n\n\n
Rate of earnings on investments increases<\/p>\n\n\n\n
Requiring monthly premium payments instead of annual
Rate of earnings on investments increases<\/p>\n\n\n\n
Taking a sum of money and decreasing it in size is called<\/p>\n\n\n\n
capital gains<\/p>\n\n\n\n
capital appreciation<\/p>\n\n\n\n
capital liquidation<\/p>\n\n\n\n
capital sum
capital liquidation<\/p>\n\n\n\n
The unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called<\/p>\n\n\n\n
implied authority<\/p>\n\n\n\n
express authority<\/p>\n\n\n\n
apparent authority<\/p>\n\n\n\n
acknowledged authority
implied authority<\/p>\n\n\n\n
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?<\/p>\n\n\n\n
Premium will be refunded with interest and no death benefit paid<\/p>\n\n\n\n
Premium received by insurer is considered to be unearned<\/p>\n\n\n\n
Proceeds are probated to 1\/12th of the full amount<\/p>\n\n\n\n
Beneficiary receives $50,000 income tax-free
Beneficiary receives $50,000 income tax-free<\/p>\n\n\n\n
What is the insurer responsible for when a producer is acting within the scope of authority granted in the agency contract?<\/p>\n\n\n\n
All actions by the producer<\/p>\n\n\n\n
Not responsible for any acts by the producer<\/p>\n\n\n\n
Responsible for acts that involve misrepresentation only<\/p>\n\n\n\n
Responsible for acts by the producer that are authority only
Responsible for acts by the producer that are authority only<\/p>\n\n\n\n
An applicant submits a life insurance application where an investigative consumer report is used in the underwriting process. Which of these statements is true?<\/p>\n\n\n\n
Applicant can determine which item in the report to leave out<\/p>\n\n\n\n
Insurer can obtain a copy of this report without the applicants knowledge<\/p>\n\n\n\n
Fee for the report is typically paid by the applicant<\/p>\n\n\n\n
Applicant has a right to receive a copy of the report
Applicant has the right to receive a copy of the report<\/p>\n\n\n\n
A source of supplemental income for a life insurance policyowner can be derived from the<\/p>\n\n\n\n
cash value<\/p>\n\n\n\n
payor benefit<\/p>\n\n\n\n
consideration<\/p>\n\n\n\n
face amount
cash value<\/p>\n\n\n\n
An annuity which starts paying monthly benefits within a month after issuance is called a(n)<\/p>\n\n\n\n
period certain annuity<\/p>\n\n\n\n
deferred annuity<\/p>\n\n\n\n
fixed annuity<\/p>\n\n\n\n
immediate annuity
immediate annuity<\/p>\n\n\n\n
When does the owner’s contractual rights begin under an individual annuity contract?<\/p>\n\n\n\n
Time of purchase<\/p>\n\n\n\n
When the benefit period begins<\/p>\n\n\n\n
When the accumulation period ends<\/p>\n\n\n\n
After free-look period expires
Time of purchase<\/p>\n\n\n\n
Which tax cost is normally associated with death?<\/p>\n\n\n\n
Federa excise tax<\/p>\n\n\n\n
Sales tax<\/p>\n\n\n\n
Federal estate tax<\/p>\n\n\n\n
Payroll
Federal estate tax<\/p>\n\n\n\n
A life insurance policy’s contingent beneficiary is the<\/p>\n\n\n\n
primary person who receives the death benefits if the insured dies<\/p>\n\n\n\n
person who receives the death benefits if the primary beneficiary dies before the insured<\/p>\n\n\n\n
person who receives the death benefits if there is no need beneficiary<\/p>\n\n\n\n
person whose approval is needed before a beneficiary designation is changed
person who receives the death benefits if the primary beneficiary dies before the insured<\/p>\n\n\n\n
When a sum of money undergoes capital liquidation, that sum will<\/p>\n\n\n\n
increase in value<\/p>\n\n\n\n
remain the same indefinitely<\/p>\n\n\n\n
decrease in size<\/p>\n\n\n\n
create tax deductions
decrease in size<\/p>\n\n\n\n
When premiums are determined, one factor would be the expenses of the<\/p>\n\n\n\n
beneficiary<\/p>\n\n\n\n
insurer<\/p>\n\n\n\n
policyowner<\/p>\n\n\n\n
producer
insurer<\/p>\n\n\n\n
Which of these is an accurate statement regarding the fixed period settlement option on a life insurance policy?<\/p>\n\n\n\n
A portion of the payments paid to the beneficiary comes from interest calculated on the proceeds of the policy<\/p>\n\n\n\n
Payments can be adjusted monthly by the beneficiary<\/p>\n\n\n\n
A portion of the payments paid to the the beneficiary comes from the interest generated from policy loans<\/p>\n\n\n\n
Payments are normally guaranteed for 10 years or more
A portion of the payments paid to the beneficiary comes from the interest calculated on the proceeds of the policy<\/p>\n\n\n\n
John received a one-time distribution of $50,000 from his modified endowment contract (MEC). Prior to that, the contract’s cash value was $150,000, the contract investment amount was $100,000, and the death benefit was $50,000. What percentage of the $50,000 distribution was taxable as ordinary income?<\/p>\n\n\n\n
0%<\/p>\n\n\n\n
25%<\/p>\n\n\n\n
50%<\/p>\n\n\n\n
100%
100%<\/p>\n\n\n\n
Taxable income may be the result from all of these modified endowment contract (MEC) transactions EXCEPT for<\/p>\n\n\n\n
A cash value loan is take out<\/p>\n\n\n\n
Automatic premium loan provision utilized<\/p>\n\n\n\n
The policy is surrendered for less than what was paid into it<\/p>\n\n\n\n
Dividend is issued
The policy is surrendered for less than what was paid into it<\/p>\n\n\n\n
Which type of policy can group term life insurance normally be covered to?<\/p>\n\n\n\n
An individual renewable policy<\/p>\n\n\n\n
An individual level term policy<\/p>\n\n\n\n
An individual permanent life insurance policy<\/p>\n\n\n\n
A group permanent life insurance policy
An individual permanent life insurance policy<\/p>\n\n\n\n
Which of the following is true regarding a person receiving a waiver of premium benefit?<\/p>\n\n\n\n
The insured must expect a total recovery within 2 years<\/p>\n\n\n\n
The insured will not qualify for short-term disability<\/p>\n\n\n\n
The insured will not qualify for workers compensation<\/p>\n\n\n\n
The insured must be disabled for a period of time
The insured must be disabled for a period of time<\/p>\n\n\n\n
Which of these is NOT an underwriting responsibility of a life insurance agent?<\/p>\n\n\n\n
Asking relevant questions concerning an applications avocations<\/p>\n\n\n\n
Requesting an attending physician’s report (APR)<\/p>\n\n\n\n
Ordering an inspection report<\/p>\n\n\n\n
Determining the final rate classification
Determining the final rate classification<\/p>\n\n\n\n
How are monthly life annuity benefit payments treated under a tax sheltered annuity (TSA)?<\/p>\n\n\n\n
Taxed as a capital gain during the accumulation period<\/p>\n\n\n\n
Taxed as ordinary income during the accumulation period<\/p>\n\n\n\n
Taxed as ordinary income in the year received<\/p>\n\n\n\n
Received tax-free to all recipients
Taxed as ordinary income in the year received<\/p>\n\n\n\n
Who normally pays the premiums for a group credit life insurance?<\/p>\n\n\n\n
Creditor and borrower share the cost equally<\/p>\n\n\n\n
Borrower<\/p>\n\n\n\n
Creditor<\/p>\n\n\n\n
Beneficiary
Borrower<\/p>\n\n\n\n
Which tax is normally associated with an individual’s death?<\/p>\n\n\n\n
Excise tax<\/p>\n\n\n\n
Consumption tax<\/p>\n\n\n\n
Federal estate tax<\/p>\n\n\n\n
Ad valorem tax
Federal estate tax<\/p>\n\n\n\n
The insurance coverage in a variable life insurance policy may vary based on the value of<\/p>\n\n\n\n
the Am Best rating the company has received<\/p>\n\n\n\n
its underlying investments<\/p>\n\n\n\n
the consumer price index<\/p>\n\n\n\n
the total premiums paid
its underlying investments<\/p>\n\n\n\n
A policyowner fell behind on the premium payments of a whole life policy and is now in the grace period. How much will the beneficiary receive if the insured dies during this grade period and the policy also contains an outstanding policy loan?<\/p>\n\n\n\n
Full face amount<\/p>\n\n\n\n
Face amount minus the past-due premium<\/p>\n\n\n\n
Face amount minus the loan balance<\/p>\n\n\n\n
Face amount minus the loan balance and past-due premium
Face amount minus the loan balance and pas-due premium<\/p>\n\n\n\n
A life insurance policyowner would like a dividend option that results in a limited correct outlay of funds. Which dividend option would be chosen?<\/p>\n\n\n\n
Paid-up additions<\/p>\n\n\n\n
Accumulation at interest<\/p>\n\n\n\n
1-year term<\/p>\n\n\n\n
Reduction of premium payment
Reduction of premium payment<\/p>\n\n\n\n
A reciprocal insurer typically has an administrator who manages the premiums collected from the group’s members. The administrator is called a(n)<\/p>\n\n\n\n
reciprocal commisioner<\/p>\n\n\n\n
attorney general<\/p>\n\n\n\n
attorney-in-fact<\/p>\n\n\n\n
reciprocal director
attorney-in-fact<\/p>\n\n\n\n
An annuity’s accumulation period may<\/p>\n\n\n\n
continue after the purchase payments stop<\/p>\n\n\n\n
continue after the benefit payments start<\/p>\n\n\n\n
continue after the annuitant dies<\/p>\n\n\n\n
continues after the annuity has been surrendered
continue after the purchase payments stop<\/p>\n\n\n\n
Which report contains information regarding an individual’s general reputation and credit standing<\/p>\n\n\n\n
Credit report<\/p>\n\n\n\n
Consumer report<\/p>\n\n\n\n
MIB report<\/p>\n\n\n\n
Agent’s report
Consumer report<\/p>\n\n\n\n
Which of these is NOT a common life insurance nonforfeiture option?<\/p>\n\n\n\n
Reduced paid-up insurance<\/p>\n\n\n\n
Extended term option<\/p>\n\n\n\n
Cash surrender option<\/p>\n\n\n\n
Life income annuity
Life income annuity<\/p>\n\n\n\n
A life insurance beneficiary died after receiving only six payments under the policy’s life income settlement option. What happens with the remaining balance of the death proceeds?<\/p>\n\n\n\n
Transfers to the insured’s estate<\/p>\n\n\n\n
Transfers to the beneficiary’s estate<\/p>\n\n\n\n
Donated to charity<\/p>\n\n\n\n
Kept by the insurance company
Kept by the insurance company<\/p>\n\n\n\n
A signed good health statement mat be requested by a life producer at the time of<\/p>\n\n\n\n
policy issue<\/p>\n\n\n\n
application<\/p>\n\n\n\n
policy delivery<\/p>\n\n\n\n
physical examination
policy delivery<\/p>\n\n\n\n
Which of these factors does NOT influence an individual’s need for life insurance?<\/p>\n\n\n\n
Lifestyle of the applicant<\/p>\n\n\n\n
Number of dependents<\/p>\n\n\n\n
Future education costs of dependents<\/p>\n\n\n\n
Self-maintenance expenses
Self-maintenance expenses<\/p>\n\n\n\n
Dividends from a stock insurance company are normally sent to<\/p>\n\n\n\n
beneficiaries<\/p>\n\n\n\n
shareholders<\/p>\n\n\n\n
policyowners<\/p>\n\n\n\n
insureds
shareholders<\/p>\n\n\n\n
Which of the following would NOT be a reason for purchasing life insurance on a child’s life?<\/p>\n\n\n\n
Provide benefits for the child if the parents die<\/p>\n\n\n\n
Pay for the child’s funeral expenses<\/p>\n\n\n\n
Provide a start on the child’s personal insurance<\/p>\n\n\n\n
Help provide funds for the child’s education
Provide benefits for the child if the parents die<\/p>\n\n\n\n
When an annuity contract has been fully surrendered, how will the surrender charges affect the final contract settlement?<\/p>\n\n\n\n
Final contract settlement will be reduced<\/p>\n\n\n\n
Final contract settlement will be increased<\/p>\n\n\n\n
Final contract settlement will not be affected<\/p>\n\n\n\n
Final contract settlement will be held in escrow until surrender charges are paid
Final contract settlement will be reduced<\/p>\n\n\n\n
Under which circumstance is the interest rate guaranteed within a market value adjusted annuity?<\/p>\n\n\n\n
When the contract has been held for a period specified in the policy<\/p>\n\n\n\n
For the entire length of the contract<\/p>\n\n\n\n
Never<\/p>\n\n\n\n
When the cash value has reached a stated minimum amount
When the contract has been held for the period specified in the policy<\/p>\n\n\n\n
Interest is credited to a fixed annuity no lower than the<\/p>\n\n\n\n
variable contract rate<\/p>\n\n\n\n
contract guaranteed rate<\/p>\n\n\n\n
current rate of inflation<\/p>\n\n\n\n
prime rate
contract guaranteed rate<\/p>\n\n\n\n
All of these are duties that a producer may be required to perform when delivering an insurance policy EXCEPT<\/p>\n\n\n\n
Acquire a statement of good health signature<\/p>\n\n\n\n
Gather the initial premium<\/p>\n\n\n\n
Review policy with applicant<\/p>\n\n\n\n
Leave a conditional receipt with client
Leave a conditional receipt with client<\/p>\n\n\n\n
The death proceeds of a credit life insurance policy are typically pid to<\/p>\n\n\n\n
borrower<\/p>\n\n\n\n
lender<\/p>\n\n\n\n
annuitant<\/p>\n\n\n\n
borrower’s dependents
lender<\/p>\n\n\n\n
Which life insurance settlement option pays lifetime benefits to two or more people?<\/p>\n\n\n\n
Life income with period certain<\/p>\n\n\n\n
Joint<\/p>\n\n\n\n
Joint and survivor<\/p>\n\n\n\n
Life income
Joint and survivor<\/p>\n\n\n\n
When does the insured stop making payments under a thirty-payment whole life policy?<\/p>\n\n\n\n
At the time of death or 30 years after the policy’s inception, whichever comes first<\/p>\n\n\n\n
It depends on the performance of the underlying investment account<\/p>\n\n\n\n
When the cash value surpasses the face amount<\/p>\n\n\n\n
At age 100
At the time of death or 30 years after the policy’s inception, whichever comes first<\/p>\n\n\n\n
Which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy?<\/p>\n\n\n\n
Prevents a policy from lapsing in the event of total disability<\/p>\n\n\n\n
Premiums waived by the insurer do not have to be repaid by the policyowner<\/p>\n\n\n\n
Policy’s cash value would still increase as the policy premiums are being waived<\/p>\n\n\n\n
It allows a policy loan to cover premium payments if the policyowner becomes totally disabled
It allows a policy loan to cover premium payments if the policyowner becomes totally disabled<\/p>\n\n\n\n
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?<\/p>\n\n\n\n
As a Section 1035 exchange<\/p>\n\n\n\n
As a transfer<\/p>\n\n\n\n
As a rollover<\/p>\n\n\n\n
As a Section 1040 exchange
As a Section 1035 exchange<\/p>\n\n\n\n
How is a collateral assignment used in a life insurance contract?<\/p>\n\n\n\n
Transfers permanent ownership rights to a creditor<\/p>\n\n\n\n
Assigns complete ownership rights to a creditor<\/p>\n\n\n\n
Transfers specific ownership rights to a creditor<\/p>\n\n\n\n
Assigns ownership rights to the primary beneficiary
Transfers specific ownership rights to a creditor<\/p>\n\n\n\n
Which of the following statements about universal life insurance is NOT true?<\/p>\n\n\n\n
Death benefit can be increased<\/p>\n\n\n\n
Premiums are flexible<\/p>\n\n\n\n
Universal life insurance normally has a minimum guaranteed cash value for the duration of the policy<\/p>\n\n\n\n
The cash value interest rate must equal or exceed a guaranteed value
Universal life insurance normally has a minimum guaranteed cash value for the duration of the policy<\/p>\n\n\n\n
How is the insured protected if a payor benefit rider is attached to the life insurance policy?<\/p>\n\n\n\n
Premiums are waived if the payor becomes financially insolvent<\/p>\n\n\n\n
Policy loan will automatically cover the premiums if payor becomes disabled or dies<\/p>\n\n\n\n
Premium payments are waived in the event the premium payor dies or becomes disabled<\/p>\n\n\n\n
Policy loan will automatically cover the premiums if payor becomes financially insolvent
Policy loan will automatically cover the premiums if payor becomes disabled or dies<\/p>\n\n\n\n
Which statement is INCORRECT about the interest-only settlement option in a life insurance policy?<\/p>\n\n\n\n
Interest rate guaranteed with a minimum rate<\/p>\n\n\n\n
Interest on proceeds must be paid by the beneficiary<\/p>\n\n\n\n
Interest is payable to a stated beneficiary<\/p>\n\n\n\n
Interest must be paid at least annually
Interest on proceed must be paid by the beneficiary (TAXES is what is paid by beneficiary not interest.)<\/p>\n\n\n\n
When the disclosure of an insured’s nonpublic information is involved, what is the insurer obligated to do?<\/p>\n\n\n\n
Insurer is not obligated to take any action<\/p>\n\n\n\n
Insurer is obligated to verify that the producer is in compliance<\/p>\n\n\n\n
Give notice, explain, and allow opting out<\/p>\n\n\n\n
Provide the proper NAIC paperwork
Give notice, explain, and allow opting out<\/p>\n\n\n\n
Where will a life insurance policy’s proceeds be directed to if all the beneficiaries die before the insured?<\/p>\n\n\n\n
Insure’s creditors<\/p>\n\n\n\n
Beneficriary’s estate<\/p>\n\n\n\n
Insured’s estate<\/p>\n\n\n\n
Court-ordered beneficiary
Insured’s estate<\/p>\n\n\n\n
After the extended term life nonforfeiture option is chose, the available insurance will be<\/p>\n\n\n\n
increasing term for stated period of time<\/p>\n\n\n\n
level term for a stated period of time<\/p>\n\n\n\n
decreasing term for a stated period of time<\/p>\n\n\n\n
renewable for a stated period of time
level term for a stated period of time<\/p>\n\n\n\n
An insurance policy may be issued with a preferred insurance premium in all these situations EXCEPT<\/p>\n\n\n\n
good credit history<\/p>\n\n\n\n
living in a rural area<\/p>\n\n\n\n
good health history<\/p>\n\n\n\n
being a nonsmoker
living in a rural area<\/p>\n\n\n\n
Where is the difference between a standard risk and a substandard risk reflected?<\/p>\n\n\n\n
Backdating<\/p>\n\n\n\n
Coverage is not offered<\/p>\n\n\n\n
Premium charges<\/p>\n\n\n\n
Back-end charges
Premium charges<\/p>\n\n\n\n
Which of these is NOT an advantage of term life insurance?<\/p>\n\n\n\n
The greatest amount of coverage can be provided for the initial premium paid<\/p>\n\n\n\n
It can be provided as a rider to another policy<\/p>\n\n\n\n
A cash benefit will be provided if the insured is alive at the end of the policy period<\/p>\n\n\n\n
Temporary insurance needs can be met
A cash benefit will be provided if the insured is alive at the end of the policy period<\/p>\n\n\n\n
Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of<\/p>\n\n\n\n
Expresses authority<\/p>\n\n\n\n
Implied auhtority<\/p>\n\n\n\n
Apparent authority<\/p>\n\n\n\n
Fiduciary duty
Apparent authority<\/p>\n\n\n\n
What is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued?<\/p>\n\n\n\n
$0<\/p>\n\n\n\n
$50,000<\/p>\n\n\n\n
Under $50,00 initially, but decreases annually over time<\/p>\n\n\n\n
Under $50,000 initially, but increases over time
Under $50,000 initially, but increases over time<\/p>\n\n\n\n
After an applicant reads and signs an insurance application, he\/she should be conscious of the fact that<\/p>\n\n\n\n
a false statement could lead to loss of coverage<\/p>\n\n\n\n
premium refunds are not allowed<\/p>\n\n\n\n
the policy is guaranteed to be issued<\/p>\n\n\n\n
the premium quoted but the agent is final
a false statement could lead to loss of coverage<\/p>\n\n\n\n
Which life insurance company policy provision prohibits a beneficiary from “commuting, encumbering, withdrawing, or assigning” any portion of the proceeds prior to actual receipt from the company?<\/p>\n\n\n\n
Insuring clause<\/p>\n\n\n\n
Spendthrift clause<\/p>\n\n\n\n
Nonforfeiture provision<\/p>\n\n\n\n
Collateral provision
Spendthrift clause<\/p>\n\n\n\n
The initial premium for a life insure policy is typically paid in what way?<\/p>\n\n\n\n
The applicant mails it to the insurer after the policy has been approved<\/p>\n\n\n\n
It is typically obtained by the producer and forwarded to the insurer<\/p>\n\n\n\n
It is typically forwarded to the insurer by the applicant<\/p>\n\n\n\n
The producer pays it from any commissions received
It is typically obtained by the producer and forwarded to the insurer<\/p>\n\n\n\n
A life insurance policy that contains an accelerated (living) benefit rider will provide funds if the<\/p>\n\n\n\n
insured is expected to be confined to a nursing home for life<\/p>\n\n\n\n
insured recently had a minor heart attack<\/p>\n\n\n\n
insured has lost used of one arm<\/p>\n\n\n\n
insured is having dire financial problems
insured is expected to be confined to a nursing home for life<\/p>\n\n\n\n
Life insurance premiums are computed on what three factors?
Mortality, interest, expenses<\/p>\n\n\n\n
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?<\/p>\n\n\n\n
When the policy is issued<\/p>\n\n\n\n
The date of policy delivery<\/p>\n\n\n\n
When the conditions or the receipt are met<\/p>\n\n\n\n
The date the sales appointment was
When the conditions of the receipt are met<\/p>\n\n\n\n
Which of these is NOT considered a type of limited payment whole life insurance?<\/p>\n\n\n\n
Life paid-up at 65<\/p>\n\n\n\n
20 payment life<\/p>\n\n\n\n
15 payment life<\/p>\n\n\n\n
Endowment at age 70
Endowment at age 70<\/p>\n\n\n\n
An insured may be required to sign which document at policy delivery to ensure there has not been any adverse medical conditions since the time of the application?<\/p>\n\n\n\n
Binding receipt<\/p>\n\n\n\n
Good health statement<\/p>\n\n\n\n
Agent’s report<\/p>\n\n\n\n
MIB disclosure
Good health statement<\/p>\n\n\n\n
Which type of life insurance policy allows a policy owner the choice of investments along with flexible premium payments?<\/p>\n\n\n\n
Variable universal life<\/p>\n\n\n\n
Modified endowment contract<\/p>\n\n\n\n
Adjustable life<\/p>\n\n\n\n
Graded premium whole life
Variable universal life<\/p>\n\n\n\n
Which of the following is NOT a dividend option for a life insurance polity?<\/p>\n\n\n\n
Elect to take the dividends in cash<\/p>\n\n\n\n
Allow the dividends to accumulate with interest<\/p>\n\n\n\n
Use the dividends to pay all or part of the next premium payment<\/p>\n\n\n\n
Receiving the entire policy cash value
Receiving the entire policy cash value<\/p>\n\n\n\n
Ron recently purchased an immediate, straight life fixed annuity. His benefit payments will<\/p>\n\n\n\n
discontinue after a stated number of years<\/p>\n\n\n\n
remain a constant dollar amount for the duration of the annuity period<\/p>\n\n\n\n
pay a lump sum if the annuitant dies<\/p>\n\n\n\n
vary according to the underlying investment performance
remain a constant dollar amount for the duration of the annuity period<\/p>\n\n\n\n
Which of the following would most likely purchase an immediate annuity?<\/p>\n\n\n\n
Individual wishing to contribute to a tax-shelter annuity<\/p>\n\n\n\n
Individual wanting to accumulate an investment over time<\/p>\n\n\n\n
Retiree having a lump sum to invest<\/p>\n\n\n\n
Business needing to immediate tax write-off
Retiree having a lump sum to invest<\/p>\n\n\n\n
In what situation could an insurance policy’s coverage be modified?<\/p>\n\n\n\n
Applicant is preferred risk<\/p>\n\n\n\n
Applicant is a substandard risk<\/p>\n\n\n\n
Applicant is a standard risk<\/p>\n\n\n\n
Applicant is uninsurable
Applicant is substandard risk<\/p>\n\n\n\n
The absolute assignment of a life insurance policy results in<\/p>\n\n\n\n
all incidents of ownership transferred to the assignee<\/p>\n\n\n\n
the assignee receives partial incidents of ownership<\/p>\n\n\n\n
the transfer of ownership is revocable at the discretion the original policyowner<\/p>\n\n\n\n
evidence of insurability must be proven before ownership is transferred
all incidents of ownership transferred to the asignee<\/p>\n\n\n\n
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?<\/p>\n\n\n\n
Date of issuance of the conditional receipt<\/p>\n\n\n\n
Date the policy was approved<\/p>\n\n\n\n
Date of policy delivery<\/p>\n\n\n\n
Date the insurer received the application
Dated the issuance of the conditional receipt<\/p>\n\n\n\n
The Medical Information Bureau consist of members from which group?<\/p>\n\n\n\n
Doctors<\/p>\n\n\n\n
Hospitals<\/p>\n\n\n\n
Insurance Companies<\/p>\n\n\n\n
Underwriters
Insurance Companies<\/p>\n\n\n\n
Which statemet concerning a decreasing term life insurance policy is accurate<\/p>\n\n\n\n
Cash value decreases over the policy period<\/p>\n\n\n\n
Premium decreases over the policy period<\/p>\n\n\n\n
Face amount deceases over the policy period<\/p>\n\n\n\n
Face amount stays the same over the policy period<\/p>\n\n\n\n
When does interest income for a flexible premium deferred annuity get reported for federal income taxes?<\/p>\n\n\n\n
Never<\/p>\n\n\n\n
After the principal has been exhausted<\/p>\n\n\n\n
Upon receiving distribution from the contract<\/p>\n\n\n\n
During the accumulation phase
Upon receiving distributions from the contract<\/p>\n\n\n\n
How may an insurance company classify an accidental death benefit on a life policy?<\/p>\n\n\n\n
Optional<\/p>\n\n\n\n
Provision<\/p>\n\n\n\n
Nonforfeiture<\/p>\n\n\n\n
Mandatory
Optional<\/p>\n\n\n\n
Which of these life insurance policies does NOT contain a cash value provision?<\/p>\n\n\n\n
Modified whole life<\/p>\n\n\n\n
Universal life<\/p>\n\n\n\n
Decreasing term life<\/p>\n\n\n\n
Adjustable life
Decreasing term life<\/p>\n\n\n\n
What kind of arrangement gives the policyowner the right to change the beneficiary?<\/p>\n\n\n\n
Contestable designation<\/p>\n\n\n\n
Incontestable designation<\/p>\n\n\n\n
Irrevocable designation<\/p>\n\n\n\n
Revocable designation
Revocable designation<\/p>\n\n\n\n
What happens when a policyowner borrows against the cash value of his life insurance policy?<\/p>\n\n\n\n
The policy proceeds would be reduced by the outstanding loan balance<\/p>\n\n\n\n
No additional loans can be taken out in the future<\/p>\n\n\n\n
The amount borrowed is added to the policyowner’s gross income for tax purposes<\/p>\n\n\n\n
The interest on the loan is tax-deductible
The policy proceeds would be reduced by the outstanding loan balance<\/p>\n\n\n\n
The exclusion ration determines<\/p>\n\n\n\n
how long an annuitant receives benefits payments<\/p>\n\n\n\n
if an annuity is eligible for a 1035 exchange<\/p>\n\n\n\n
the interest rate for an annuity<\/p>\n\n\n\n
the amount of an annuity payment subject to income tax
the amount of an annuity payment subject to income tax<\/p>\n\n\n\n
Which of the following combinations best describe a universal life insurance policy?<\/p>\n\n\n\n
A mutual fund and an endowment policy<\/p>\n\n\n\n
A term insurance policy and a whole life policy<\/p>\n\n\n\n
A modified endowment policy and an annual term insurance policy<\/p>\n\n\n\n
A flexible premium deposit fund and a monthly renewable term insurance policy
A flexible premium deposit fund and a monthly renewable term insurance policy<\/p>\n\n\n\n
What could be the potential result of taking out a cash value loan under a life insurance policy?<\/p>\n\n\n\n
Death benefit will be subject to income taxes if insured dies with an outstanding loan balance<\/p>\n\n\n\n
Interest that accrues on policy loan is tax-deductible to the policyowner<\/p>\n\n\n\n
Loam amount will be added to the policy owner’s gross income<\/p>\n\n\n\n
Reduces the amount receivable upon surrender of the contract
Reduces the amount receivable upon surrender of the contract<\/p>\n\n\n\n
Which is an accurate description of the premium in a graded premium life insurance policy?<\/p>\n\n\n\n
Level premium for a stated number of years then increased annually for the remainder of the contract<\/p>\n\n\n\n
Level premium for a stated number of years then decreases annually for the remainder of the contract<\/p>\n\n\n\n
Annual decreases in premium for a state number of years then remains level<\/p>\n\n\n\n
Annual increases in premium for a stated number of years then remains level
Annual increases in premium for a stated number of years then remains level<\/p>\n\n\n\n
Al surrenders his life insurance policy for its cash value. The total of premiums paid into the policy minus total dividends received in cash or used to offset premiums is referred to as the<\/p>\n\n\n\n
Premium basis<\/p>\n\n\n\n
Net proceeds<\/p>\n\n\n\n
Cash basis<\/p>\n\n\n\n
Cost basis
Cost basis<\/p>\n\n\n\n
Which of these is NOT used as selection criteria in the underwriting process of a life insurance application?<\/p>\n\n\n\n
Credit report<\/p>\n\n\n\n
National origin<\/p>\n\n\n\n
Age of applicant<\/p>\n\n\n\n
Sex of applicant
National origin<\/p>\n\n\n\n
A material change in a modified endowment contract (MEC) results in<\/p>\n\n\n\n
the contract becoming void<\/p>\n\n\n\n
a new contestable preiod<\/p>\n\n\n\n
the seven pay test, adjusted for cash value, applies again<\/p>\n\n\n\n
a tax penalty
the seven pay test, adjusted for cash value, applies again<\/p>\n\n\n\n
What determines how much an annuitant is paid for a variable annuity?<\/p>\n\n\n\n
Varies according to how many outstanding annuity units<\/p>\n\n\n\n
Payment fluctuates as annuitant gets older<\/p>\n\n\n\n
The market value variations of the securities backing it<\/p>\n\n\n\n
Varies according to the insurer’s investment in its general account
The market value variations of the securities backing it<\/p>\n\n\n\n
Which statement regarding the waiver of premium rider is accurate?<\/p>\n\n\n\n
Policy loans are used to keep the policy active<\/p>\n\n\n\n
Cash payment is not directly provided to the policyowner<\/p>\n\n\n\n
Insurance companies are required to offer this to allpolicyowners<\/p>\n\n\n\n
Premiums are waived in the event of bankruptcy
Cash payment is not directly provided to the policyowner<\/p>\n\n\n\n
A policyonwer with a terminal illness who sells his life insurance policy to a third party is called a<\/p>\n\n\n\n
viable<\/p>\n\n\n\n
viatical<\/p>\n\n\n\n
viator<\/p>\n\n\n\n
via tee
viator<\/p>\n\n\n\n
Which of these policies is considered a life policy?<\/p>\n\n\n\n
Credit life<\/p>\n\n\n\n
Single premium life<\/p>\n\n\n\n
Renewable life<\/p>\n\n\n\n
Convertible life
Single premium life<\/p>\n\n\n\n
What kind of life policy typically offers mortgage protection?<\/p>\n\n\n\n
Whole life<\/p>\n\n\n\n
Decreasing term<\/p>\n\n\n\n
Increasing term<\/p>\n\n\n\n
Level term
Decreasing term<\/p>\n\n\n\n
A survivorship life insurance policy usually covers how many lives?<\/p>\n\n\n\n
1<\/p>\n\n\n\n
2<\/p>\n\n\n\n
3<\/p>\n\n\n\n
4
2<\/p>\n\n\n\n
Which of these pays an income to two or more annuitants until the death of the last annuitant?<\/p>\n\n\n\n
Joint life annuity<\/p>\n\n\n\n
Deferred survivor annuity<\/p>\n\n\n\n
Joint and survivor annuity<\/p>\n\n\n\n
Survivorship annuity
Joint and survivor annuity<\/p>\n\n\n\n
We have an expert-written solution to this problem!
When must a producer provide disclosure about information practices to an applicant?<\/p>\n\n\n\n
During the medical examination<\/p>\n\n\n\n
Upon policy delivery<\/p>\n\n\n\n
Prior to or at the time of signing the application<\/p>\n\n\n\n
Immediately after signing the application
Prior to or at the time of signing the application<\/p>\n\n\n\n
Wyatt is shopping for life insurance and is mainly concerned with the policy’s death benefit. Which index should he be looking at when making comparisons?<\/p>\n\n\n\n
Net gain index<\/p>\n\n\n\n
Net payment cost index<\/p>\n\n\n\n
Cost surrender index<\/p>\n\n\n\n
Guaranteed renewable index
Net payment cost index<\/p>\n\n\n\n
After an insurance application has been originated, the producer normally<\/p>\n\n\n\n
can change the policy provisions<\/p>\n\n\n\n
determines whether a claim will be paid<\/p>\n\n\n\n
is the major personal contact to the insured<\/p>\n\n\n\n
conducts a physical examination
is the major personal contact to the insured<\/p>\n\n\n\n
What happens to a life insurance policy when the policy loan balance exceeds the cash value?<\/p>\n\n\n\n
Nonforfeiture options are offered<\/p>\n\n\n\n
Policy becomes paid-u<\/p>\n\n\n\n
Automatic premium loan provision is utilized<\/p>\n\n\n\n
Policy will no longer be in force
Policy will no longer be in force<\/p>\n\n\n\n
Laura added a children’s rider to her life insurance policy. What type of coverage was added?<\/p>\n\n\n\n
Level term<\/p>\n\n\n\n
Increasing term<\/p>\n\n\n\n
Decreasing term<\/p>\n\n\n\n
Juvenile term
Level term<\/p>\n\n\n\n
When there is a named beneficiary on a life insurance policy, the death benefits<\/p>\n\n\n\n
are directed to a trustee if the insured has any outstanding debts<\/p>\n\n\n\n
are paid directly to the insured’s creditors, with any remaining balance fowarded to the beneficiary<\/p>\n\n\n\n
are paid directly tot he beneficiary, minus any debts claims by the insured’s creditors<\/p>\n\n\n\n
are paid directly to the beneficiary without interference from the insured’s creditors
are paid directly to the beneficiary without interference from the insured’s creditors<\/p>\n\n\n\n
Insurable interest in one’s own life is legally considered as<\/p>\n\n\n\n
illegal in most states<\/p>\n\n\n\n
limited<\/p>\n\n\n\n
generally unlimited<\/p>\n\n\n\n
contingent on future earnings
generally unlimited<\/p>\n\n\n\n
What is the accounting measurement of an insurance company’s future obligations to its policyowners?<\/p>\n\n\n\n
Credits<\/p>\n\n\n\n
Reserves<\/p>\n\n\n\n
Surplus account<\/p>\n\n\n\n
Retention fund
Reserves<\/p>\n\n\n\n
Switching Life insurance policies without tax consequences is permitted under<\/p>\n\n\n\n
MEC rules<\/p>\n\n\n\n
Section 1035 rules<\/p>\n\n\n\n
the Exclusion Ratio<\/p>\n\n\n\n
Replacement rules
Section 1035 rules<\/p>\n\n\n\n
The annuitant in a single premium deferred annuity (SPDA)<\/p>\n\n\n\n
receives immediate benefit payments<\/p>\n\n\n\n
makes only one premium payment<\/p>\n\n\n\n
can make tax-free withdrawals until the principal is recovered<\/p>\n\n\n\n
is also the beneficiary
makes only one premium payment<\/p>\n\n\n\n
Why do insurers require a minimum number of employees participate in a group insurance plant?<\/p>\n\n\n\n
Efficiency maximized<\/p>\n\n\n\n
Minimize adverse selection<\/p>\n\n\n\n
Profits are maximized<\/p>\n\n\n\n
Claims are minimized
Minimize adverse selection<\/p>\n\n\n\n
When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what kind of designation is this?<\/p>\n\n\n\n
Collateral beneficiary<\/p>\n\n\n\n
Revocable beneficiary<\/p>\n\n\n\n
Irrevocable beneficiary<\/p>\n\n\n\n
Per stripes beneficiary
Irrevocable beneficiary<\/p>\n\n\n\n
Which of the following would NOT be appropriate for an immediate annuity?<\/p>\n\n\n\n
A lottery winner who opted for a lump-sum payment<\/p>\n\n\n\n
A parent saving for a child’s college<\/p>\n\n\n\n
A beneficiary collecting the face amount of a life insurance policy<\/p>\n\n\n\n
Someone who just won a large settlement
A parent saving for a child’s college<\/p>\n\n\n\n
These are all accurate statements regarding universal life insurance EXCEPT<\/p>\n\n\n\n
Mortality charge is deducted from the policy’s cash value each month<\/p>\n\n\n\n
Policy loans are not permitted<\/p>\n\n\n\n
Flexible premiums as long as the cost of insurance protection is covered<\/p>\n\n\n\n
Policy states what percentage of the premium is contributed to the cash value and which pays for the cost of insurance
Policy loans are not permitted<\/p>\n\n\n\n
How long can an insurer legally defer paying the cash value of a surrendered life insurance policy?<\/p>\n\n\n\n
2 months<\/p>\n\n\n\n
4 months<\/p>\n\n\n\n
6 months<\/p>\n\n\n\n
12 months
6 months<\/p>\n\n\n\n
Which statement concerning a deferred annuity contract is correct?<\/p>\n\n\n\n
The contract cannot be assignable by the owner<\/p>\n\n\n\n
Requires a single premium payment<\/p>\n\n\n\n
The owner can be the beneficiary, annuitant, or neither<\/p>\n\n\n\n
Benefits start immediately after contract information
The owner can be the beneficiary, annuitant, or neither<\/p>\n\n\n\n
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<\/p>\n\n\n\n
obtained from the state’s Guaranty Association<\/p>\n\n\n\n
accumulated from the invested principal<\/p>\n\n\n\n
given up by the annuitant’s refund beneficiary<\/p>\n\n\n\n
not distributed to life annuitants who dies before life expectancy
not distributed to life annuitants who dies before life expectancy<\/p>\n\n\n\n
\n- <\/li>\n<\/ul>\n\n\n\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
AZ Life Insurance Exam (Latest 2024\/ 2025 Update) Questions and Verified Answers| 100% Correct| Grade A AZ Life Insurance Exam (Latest 2024\/ 2025Update) Questions and Verified Answers|100% Correct| Grade AQ: A life policy that has premiums that are lower than normal during the early years is calledDecreasing termModified lifeVariable lifeLimited-pay lifeAnswer:Modified lifeQ: a material change […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-131948","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/131948","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=131948"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/131948\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=131948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=131948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=131948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}