IOWA INSURANCE EXAM - LIFE

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IOWA INSURANCE EXAM - LIFE

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -98 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: permanent life insurance

Answer:

provides life ins for the insured's entire life; coverage is provided until insured dies or reaches 120 years old

Question 2: Labor unions

Answer:

Either all members for all members of the individual classes must be eligible Min 10 members Coverage cannot be suspended or terminated involved in labor dispute with plan sponsor

Question 3: Universal life disability waivers 2 forms

Answer:

• Waiver of stipulated premium: rider that provides that a preset premium payment amount is waived if

insured becomes disabled for at least 6 months, identified amount at time of application

• Waiver of cost of insurance: rider that waived only the cost of insurance deducted monthly from

policy's cash value, amount waived is the cost of insurance deduction instead of premium Question 4: allows owners to make premium deposits of any amount whenever they want - there is a minimum (typically)

Answer:

are deferred annuity values forfeitable?

Question 5: whole life 2 guaranteed features

Answer:

length of time where premiums are paid how the pollicys cash values are invested and grown Question 6: Regulation of Variable products - what do the Securities Exchange commission and financial Industry Regulatory authority do?

Answer:

SEC - responsible for regulating the securities that make up an insurer's separate account FIRA - regulates producers who sell variable life products and companies that sell investment products

Question 7: Employers for group insurance

Answer:

Employer my sponsor a group plan or serve as trustee

• minimum 10 people

-all employees. Eligible must be allowed to participate

Question 8: Group insurance vs. individual

Answer:

-covers many non-related people -less expensive per person

Question 9: Contributory group plan

Answer:

-premiums split between sponsor and plan participants -~75% participants eligible -common with group health insurance

Question 10: Association groups for group plan

Answer:

Members of associations (school districts) minimum of 10 people association is policy owner Two or more employers in the same business can form a group

Question 11: Types of life insurance policies

Answer:

-term -whole -flexible premium policies -specialized policies -endowment policies -group life

Question 12: Endowment

Answer:

insurance policy that matures when its guaranteed cash value equals its face amount -if insured is still alive at maturity, coverage is termed and policyowner is paid, lasts until age 120 1.if insured dies before end of endowment period, policy pays death benefit to beneficiary

• if insured is alive when policy endows, policyowner received specified sum as living benefit

Question 13: interest earnings and growth are not taxable to owner

Answer:

annuity riders - guaranteed income rider

Question 14: Interest factor

Answer:

added to premium calculations to recognize investment earnings, used as credit - higher rate = lower premium

Question 15: Split-Dollar plan pg 160

Answer:

Corporate-Owned Life Insurance (COLI) pg 161

Question 16: Rider

Answer:

Additional benefits to policy, extra premiums

Question 17: Indexed life insurance

Answer:

permanent insurance where interest credited to the contracts cash value is tied to an equity index instead of a rate

Question 18: Participating vs nonparticipating life insurance

Answer:

par - issued by mutual ins co's, policyowner is eligible for policy dividends declared by the insurance co; dividends are paid from insurers divisible surplus non par - issued by stock ins co, no policy dividends Question 19: charge-free withdrawals if interest rate credited drops below specified level

Answer:

Immediate annuities

Question 20: Indeterminate premium whole life

Answer:

• lower fixed rate

• guaranteed maximum rate

policyowner pays lower fixed rate for specified number of years, at end of period, premium rate moves up or down based on investment earnings

Question 21: purpose of life insurance

Answer:

pay a death benefit to beneficiaries when the insured dies

Question 22: Ordinary whole life

Answer:

benefits and premiums remain level straight through the insureds whole life, death benefits remain level.premiums are paid until insured dies

Question 23: Joint (first-to-die) life insurance

Answer:

permanent coverage that insures two persons under one policy, policy pays the death benefit when the first insured dies, cheaper than two separate policies -when one dies other buy individual policy with same/lower face amount