Tim purchases an insurance policy from a producer. the producer must present to tim a notice

Inhaltsverzeichnis Show

How must a replacing producer respond to an applicant wishing to replace existing life insurance quizlet?
Which action should a producer take when submitting an insurance application to an insurer?
Where a replacement is involved the producer must do all of the following except?
When must the policy summary be given to the policy owner?

Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

Normal Size Small Size show me how

Question	Answer
Broad Powers and Duties (33-1-301 through 306; 33-18-1003 through 1005) The Commissioner controls and supervises the insurance department. The Commissioner is responsible for administering the insurance department to the best interests of:	Consumers
The Commissioner may employ insurance actuaries, attorneys, or other independently practicing insurance professionals if there is not:	A conflict of interest
The Commissioner will keep information confidential, but may share the information with law enforcement agencies, federal agencies, foreign governments, or other state insurance departments, if the recipient agrees to:	Maintain confidentiality
The Commissioner must examine each authorized insurer at least:	Once every 5 years
Insurance producers must keep at their place of business a complete set of records of insurance transactions for _____ after the completion of the respective transaction.	At least 3 years
The refusal to comply with insurance record examination procedures is grounds for suspension, refusal, or nonrenewal of any license or authority. Destruction of records is:	Punishable by fine
After an examination, the Commissioner must compose and file a report regarding the facts and testimony from persons examined _____ of the examination.	Within 60 days
Can a person provide the Commissioner with a written demand for hearing?	Yes
The department must take action upon a person or entity that has committed a violation of insurance laws _____ of the date of violation or date the violation is discovered.	Within two years
An appeal of the Commissioner's order must be filed in the district court of:	Lewis and Clark County
What are the maximum penalties for each violation of the Montana Insurance Code, for which a greater penalty is not provided by another Montana law?	$1000 or 90 days in the county jail
A/an _____ Insurer is an insurer formed under the laws of any jurisdiction other than Montana. Except when distinguished by context, the term includes an alien insurer.	Foreign
Insurance is a contract through which one party undertakes to indemnify another party or pay or provide a specified or _____ amount or benefit upon _____ contingencies.	Determinable
To solicit, negotiate, sell or effectuate a contract of insurance, or service an insurance contract is called:	Transacting insurance
Which of the following includes every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance?	Insurer
The term insurance producer, with respect to fraternal benefit organizations, does not include any regular salaried officer/employee of a licensed society who:	Does not solicit and does not receive commissions
Any society, order, or supreme lodge, without capital stock, not 4 profit, conducted for benefit of members & their beneficiaries, operated on a lodge system w/ ritualistic forms of work, has a representative form of gov & provides benefits to members?	Fraternal Benefit Societies
The license itself _____ actual, apparent, or inherent authority in the holder to represent or commit an insurer to a binding agreement.	Does not create
An insurance producer _____ a person who enrolls individuals in blanket insurance plans, underwriters, attorneys, or a person who is only involved in advertising of insurance policies.	Does not include
Which of the following is NOT a condition for a nonresident to be granted a nonresident Montana insurance producer license?	If the person has submitted a completed application form approved by the Attorney General
Dave is a licensed insurance producer in Idaho and he wants to sell insurance in Montana. Will the Commissioner waive Montana's licensing requirements?	If Idaho awards nonresident licenses to residents of Montana on the same basis
A nonresident insurance producer's license continues in force until lapsed, suspended, revoked, or terminated. The license lapses if the licensee fails to:	Pay the 2-year renewal fee
A person who is not licensed as an insurance consultant in Montana, but who represents themselves as one, may be:	Fined
An insurance consultant cannot receive payment for services if the consultant has received compensation from _____ for consulting services on the same line of service within the preceding 12 months.	The same client
A person may not act as or represent themselves as _____ in Montana unless the person holds a certificate of registration as _____.	An administrator
The Commissioner of Insurance is elected by the qualified voters of Montana at a statewide general election and holds office for a term _____ and until a successor is elected and qualified.	Of four years
The Commissioner and his staff cannot have _____ an insurer, insurance agency, or insurance transaction, except as a policyholder or claimant under a policy.	A financial interest in
If the report charges a violation of the insurance laws and the person does not _____, then the Commissioner may seek a restraining order or injunction against the person involved in the wrongful acts.	Discontinue the act
The Commissioner of Insurance will keep information confidential, but may share the information with law enforcement agencies, federal agencies, foreign governments, or other state insurance departments, if the recipient agrees to:	Maintain confidentiality
The Commissioner of Insurance must examine the affairs, transactions, accounts, records, and assets of each authorized insurer as often as _____ considers advisable.	The Commissioner
Insurance producers must keep at their place of business a complete set of records of insurance transactions for at least _____ of the respective transaction.	Three years after the completion
The refusal to comply with the Commissioner's examination procedures is grounds for suspension, refusal, or nonrenewal of any license or authority. Destruction of records is:	Punishable by fine
After an examination, the Commissioner must compose and file a report regarding the facts and testimony from persons examined:	Within 60 days of the examination
The Commissioner's orders and notices are valid if they are _____ by the Commissioner, or by the Commissioner's authority.	In writing and signed
If the Commissioner does not issue an order granting the request for a hearing within 30 days of receiving the request, the hearing is considered:	Refused
The Commissioner's department must take action upon a person or entity that has committed a violation of insurance laws _____ of the date of violation or date the violation is discovered.	Within two years
Domestic insurers and resident producers may appeal a suspension or revocation of the certificate of authority in any _____ of Montana county where the insurer or producer has its principal place of business or where the licensee resides.	District court
Each violation of the Montana Insurance Code carries a maximum financial penalty of _____ and a maximum sentence of _____.	$1000...90 days
An insurer incorporated under the laws of Montana is known as a/an:	Domestic Insurer
An insurer formed under the laws of any country other than the United States or its states, districts, territories, and commonwealths is known as a/an:	Alien Insurer
Insurance is a contract through which one party undertakes to indemnify another party or pay or provide a specified or _____ amount or benefit upon _____ contingencies.	Determinable...determinable
Which of the following terms includes every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance?	Insure
The term insurance producer with respect to fraternal benefit organizations does not include any regular salaried officer/employee of a licensed society who does not _____ and do not receive ____.	Solicit...commissions
Any society, order, or supreme lodge, without capital stock, not for profit, conducted for benefit of members &beneficiaries, operated on a lodge system with ritualistic forms of work, representative form of government, provides benefits to its members?	Fraternal Benefit Societies
An insurance producer _____ a person who enrolls individuals in blanket insurance plans, underwriters, attorneys, or a person who is only involved in advertising of insurance policies.	Does not include
Which of the following is NOT a condition for being granted a nonresident Montana insurance producer license?	The person has submitted a completed application form approved by the City Council of Helena
Susan holds a valid insurance producer's license in Idaho. Will the Commissioner of Insurance waive any requirements if Susan want to hold an insurance producer's license in Montana?	Yes, if Idaho awards nonresident licenses to residents of Montana on the same basis
The Commissioner may issue _____ to an individual who has complied with all the requirements with respect to either life or general insurance.	A consultant license
An insurance _____ cannot receive payment for services if the _____ has received compensation from the same client for _____ services on the same line of service within the preceding 12 months.	Consultant...consultant...consulting
A person may not act as or represent themselves as a/an _____ in Montana unless the person holds a certificate of registration as a/an _____.	Administrator...administrator
A person may not place a contract of _____ insurance with an unauthorized insurer unless the person is licensed as a property and casualty insurance producer and possesses a current _____ insurance producer's license issued by the Commissioner.	Surplus lines
Continuing education requirements do not apply to _____ insurance producers.	Temporary
The temporary license is valid for a maximum period of _____, subject to extension of _____, but can extend no more than _____.	90 days...90 days...15 months
An applicant for a/an _____ license as an insurance agent must take the written qualification examination within 30 days after issuance of the _____ license.	Temporary
Which of the following is NOT necessary for the Commissioner to verify in order to approve a license application for an individual insurance producer?	The applicant is 21 years of age or older
Is a resident or nonresident business entity acting as an insurance producer required to obtain an insurance producer's license?	Yes
For which of the following would the Commissioner be LEAST LIKELY to suspend, revoke, refuse to renew, or refuse to issue an insurance producer's license?	If the candidate unknowingly accepted insurance business from a person who is not licensed
Each insurer appointing an insurance producer in Montana must file with the Commissioner the appointment, within _____ of the appointment, specifying the kinds of insurance to be transacted by the insurance producer for the insurer.	15 days
Can a person may sell, solicit, or negotiate insurance or act as an insurance producer in Montana unless licensed as an insurance producer in Montana?	No
No person may advertise in any way that is _____, with respect to the business of insurance or with respect to any person in the insurance business.	Untrue, deceptive, or misleading
Any inducement in the sale of insurance that is not specified in the insurance contract itself is:	A rebate
Which of the following is the unethical act of persuading a policyowner to drop a policy solely for the purpose of selling another policy without regard to possible disadvantages to the policyowner?	Twisting
Suggesting a policy is better suited for a prospective applicant than the facts would indicate to a reasonable person is an example of:	Misrepresentation
Unethical producers practice _____ by spreading rumors or falsehoods about the character of competing producers or about the financial condition of another company.	Defamation
A person may not willfully collect money as a premium or charge for insurance in any sum that is _____ the amount applicable to the insurance.	More or less than
As long as distinctions made by insurance underwriters are applied equally to each and every applicant or policyholder, discrimination is:	Fair
It is _____ to refuse to insure _____ another insurer has refused to write a policy or has cancelled an existing policy on that person.	Illegal...solely because
Which of the following often marks the difference between fair and unfair?	Whether something is done in a "reasonable" fashion
Which of the following may mark the difference between fair and unfair claim practices?	Whether a practice is so frequent that it indicates a general business practice
Insurers cannot use money or property to aid or support a/an _____ party, committee, _____ organization, _____ office candidate, or for any _____ purpose whatsoever.	Political
Any person who violates a cease and desist order is subject to a maximum penalty of $1,000. Each day of violation constitutes a separate violation. The maximum total penalty is:	$10,000
All insurance premiums or return premiums received by an insurance producer must be held in _____ account.	A separate trust
Renewal or other deferred commissions to a producer _____ as long as the producer was licensed at the time the insurance contract was sold.	Are permitted
The insurance producer will keep at a place of business complete records pertaining to transactions under the license for a period of at least _____ completion of the respective transactions.	3 years after
What must an agent must use to keep his principal informed of his acts in the course of the agency?	Ordinary diligence
_____ insurance means any insurance on risks resident, located, or to be performed in Montana permitted to be placed through a/an _____ insurance producer with an unauthorized insurer eligible to accept the insurance.	Surplus lines
An individual licensed to act as an insurance producer must complete _____ hours of continuing education during each _____-month period.	24...24
Continuing education requirements _____ to temporary insurance producers.	Do not apply
Under which of the following conditions would the Commissioner be LEAST LIKELY to issue a temporary license?	To the designee of a licensed insurance producer entering upon reserve service in the armed forces of the United States of America
An applicant for a temporary license as an insurance agent must take the written qualification examination within _____ issuance of the temporary license.	30 days after
Which of the following must the Commissioner NOT verify in order to approve a license application for an individual insurance producer?	That the individual is 21 years of age or older
A resident or nonresident business entity acting as an insurance producer _____ to obtain an insurance producer's license.	Is required
Which of the following is the LEAST LIKELY reason why the Commissioner would suspend, revoke, refuse to renew, or refuse to issue an insurance producer's license, adjuster license, or consultant license?	If the producer has unwittingly accepted insurance business from a person who is not licensed
Each insurer appointing an insurance producer in Montana must file with the Commissioner the appointment, _____ of the appointment, specifying the kinds of insurance to be transacted by the insurance producer for the insurer.	Within 15 days
An insurance producer may not claim to be a representative of or an authorized or appointed insurance producer of or use another term implying a contractual relationship with a particular insurer unless the insurance producer is:	An appointed insurance producer of that insurer
A person may not sell, solicit, or negotiate insurance or act as an insurance producer in Montana unless _____ as an insurance producer in Montana.	Licensed
No person may advertise in any way that is _____, with respect to the business of insurance or with respect to any person in the insurance business.	Untrue, deceptive, or devious
The free use of a vacation condominium, seats at ballgames, tickets to special events, or anything else not specifically named as part of the insurance contract are examples of:	Rebates
Encouraging an insured to lapse on his or her current policy and to take out another is an example of:	Twisting
Which of the following is NOT an example of a misrepresentation of an insurance policy?	Relating the benefits and including a description of conditions or limitations
Which of the following is any false, maliciously critical, or derogatory communication - written or oral - that injures another's reputation, fame, or character?	Defamation
A person _____ money as a premium or charge for insurance in any sum that is more or less than the amount applicable to the insurance.	May not willfully collect
In the case of principles applied equally by insurance underwriters to each and every applicant or policyholder, discrimination is:	Fair
Insurance laws state that no insurance producer may unfairly discriminate between individs of the ___ class & equal expectation of life in rates charged 4 the policy or between individuals of the ___class & of the ___ hazard in the amount of premium rates	Same
Which of the following is NOT considered an unfair claim practice?	Electing to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear
Which of the following is NOT considered an unfair claim practice?	Trying to provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement
Notice of an alleged insurance fraud involving an insurance claim or application submitted to the state compensation insurance fund or a policy issued by the state compensation insurance fund must be made _____ to the fraud detection and prevention unit.	Within 60 days
Any officer, director, stockholder, attorney, or insurance producer of any insurer that does so is guilty of a misdemeanor and may be punished by imprisonment for:	Not more than 1 year and a fine of not more than $1,000
Any person who violates _____ is subject to a maximum penalty of $1,000. Each day of violation constitutes a separate violation. The maximum total penalty is $10,000.	A cease and desist order
All insurance premiums or return premiums received by an insurance producer must be held in _____ account. Commingling of funds is prohibited.	A separate trust
The insurer must provide to all prospective purchasers a buyer's guide & a policy summary prior to accepting app's premium or premium deposit, unless policy 4which an app is made contains ___ of at least 10 days or unless policy summary contains __offer.	An unconditional refund
An insurance policy that is converted to reduced paid-up insurance, continued as extended term insurance, or otherwise reduced in value by the use of nonforfeiture benefits or policy values is an example of a/an:	Replacement
Generally speaking, the insurer must provide to all prospective purchasers a buyer's guide and a policy summary prior to accepting the applicant's:	Premium or premium deposit
Retains/produces replacement notis received for 5 yrs, explain to policy owner the right to receive info about their account, surrender any policy values, send notice to policy owner advising	Existing insurer
Which of the following is NOT a provision for an individual life insurance policy?	A statement that the validity of the policy may be contested if it has been in force for 3 years, except for nonpayment of premium
Which of the following is NOT a provision for an individual life insurance policy?	Every quarter, the insurer will apportion any divisible surplus accruing on the contract
Settlement upon the death of the insured must be made within _____ of proof of death.	60 days
No insurer may cancel a life insurance policy or annuity for _____ until the insurer has mailed notice of the cancelation to the insured and policy owner.	Nonpayment of premiums
A minor domiciled in Montana may receive payments not exceeding _____ in any 1 year made by a life insurer under a life insurance policy that provides for payment to the minor.	$3,000
Which of the following is NOT a required provision for annuities?	A grace period of 3 months
Which of the following contracts are NOT exempt from the required provisions if they relate to disability benefits or to additional benefits in the event of death by accident?	Contracts incremental to the benefits
Which of the following is insurance on the life of a debtor or the lives of joint debtors in connection with a specific loan or credit transaction?	Credit life insurance
All credit life insurance sold must be evidenced by a policy that is delivered to the:	Debtor
Employee life insurance is a plan of life insurance under which individual policies are issued to the employees of any employer and on the lives of at least:	5 employees
Which of the following groups is NOT eligible for employee life insurance?	Creditor groups
If a person dies during the pd that they'd be entitled to have individ policy issued because conversion on termination of emp or insurance, &before an individ policy becomes effective, amt of life insurance they'd be entitled to is __ under group policy.	Payable as a claim
If an individual under a group policy is entitled to an individual policy of life insurance, notice of that right should be given within _____ of the application period.	15 days of the expiration date
Which of the following is NOT a required provision of group life insurance policies?	A grace period of 31 days for the payment of any premium due except for the first three
What is an agreement that sets the terms for compensation, when compensation is less than the expected death benefit of an insurance policy, in return for the viator's assigning/transferring/selling of the benefit?	A viatical settlement contract
Who is the owner of a life insurance policy under a group policy who enters or seeks to enter into a viatical settlement contract?	A viator
Which of the following terms refers to a solicitation through mailings, telephone, the internet or other mass communication media?	Direct-response solicitation
Which of the following is LEAST LIKELY to be contained in a life insurance policy summary?	Quarterly contract dividend
Which of the following terms refers to a variable annuity contract or variable life insurance policy subject to the prospectus delivery requirements of the Securities Act of 1933?	Registered contract
A producer who initiates an application must submit to the insurer a statement signed by the applicant and the producer as to whether the applicant has:	Any existing policies
If a replacement is involved in a transaction, which of the following does the replacing insurer NOT have to do?	Provide to the policy owner notice of the right to renew the policy
One of the duties of the existing insurer must be to retain and be able to produce all replacement notifications received for:	5 years
Which of the following is LEAST LIKELY to be an individual life insurance policy provision?	A 30-day return policy for the insurance policy
A/an _____ domiciled in Montana may receive payments not exceeding $3,000 in any 1 year made by a life insurer under a life insurance policy that provides for payment to the _____.	Minor
Which of the following is NOT a required provision for annuities?	A grace period of 3 months
Which of the following contracts are exempt from the required provisions if they relate to disability benefits or to additional benefits in the event of death by accident?	Annuity contracts or contracts supplemental to them
The initial amount of credit life insurance cannot be _____ the total amount the debtor owes.	More than
In which of the following forms may an insurer NOT issue credit life insurance?	Individual policies of life insurance issued to debtors on an underwritten, prepaid plan
Which of the following is a plan of life insurance under which individual policies are issued to the employees of any employer and on the lives of at least five employees?	Employee life insurance
Which of the following groups is NOT eligible for group life insurance?	Mortgagor groups
An individual under a group policy entitled to an individual policy of life insurance should be given notice of that right within 15 days of:	The expiration date of the application period
Which of the following is NOT a provision for a group life insurance policy?	All statements made by the certificate holder are guarantees, not warranties
Who solicits, enters into, or negotiates viatical settlement contracts?	A viatical settlement provider
Who is the owner of a life insurance policy under a group policy who enters or seeks to enter into a viatical settlement contract?	A viator
With respect to insurance rates, to which of the following is consideration LEAST LIKELY to be given?	To past and prospective capital gains taxes
wrt the Insurance Guaranty Fund, the benefits for which the Association may become liable will not exceed the lesser of ___ in life insurance death benefits, but not more than ___ in net cash surrender &net cash withdrawal values for life insurance.	$300,000...$100,000
Insureds must receive a new privacy notice every:	12 months
Disclosure of _____ information for marketing purposes is usually not allowed.	Personal
Any assessment or membership, policy, survey, inspection, service, or similar fee or charge in consideration for an insurance contract is deemed part of the:	Premium
Any person of _____ may contract for insurance. There are some limitations on minors between the ages of 15 and 18 contracting for life insurance or annuities.	Competent legal capacity
It is an act of insurance fraud to accept premium money knowing that coverage:	Will not be provided
An insurer or insurance producer ___ a person for services as an insurance producer unless the person performing the service holds a valid license w/ regard to the kinds of insurance 4which the service was rendered at the time the service was performed.	May not pay
An insurance producer ___ the insurance producer's commissions or other compensation received on account of a transaction under the insurance producer's license w/ any person not also licensed as 2 the same kinds of insurance involved in transactions.	May not share
The insurance producer will keep at a place of business complete records pertaining to transactions under the license for a period of _____ completion of the respective transactions.	At least 3 years after
Agency is ___ when the agent is really employed by the principal. Agency is __ when the principal intentionally or by want of ordinary care causes a 3rd person to believe another to be the principal's agent when they aren't employed by the principal.	Actual...ostensible
When an agent exceeds his authority, his _____ is bound by his authorized acts only so far as they can be plainly separated from those which are unauthorized.	Principal
A unilateral contract is:	A contract that makes promises in exchange for a performance
An individual medical plan is usually:	A contract of adhesion
A one-sided agreement whereby you promise to do (or refrain from doing) something in return for a performance (not a promise) is what type of contract?	A unilateral contract
A contract that heavily restricts one party while leaving the other free (as in some standard form printed contracts), and implies inequality in bargaining power is:	A contract of adhesion
An insurance policy is a legal contract, based on contract law. It is a contract where _____________ is exchanged for valuable consideration (i.e., premiums).	a promise of benefits
Kathy is filling out an insurance application. Her broker has explained to her that the statements made in the application are held to a principle of _______________, which means they are not guaranteed to be true.	representation
What gives the insurance company the right to assume rights of the insured in order to sue a responsible third party when damages are inflicted on the insured?	Subrogation
Simon has applied for insurance by completing an application and paying the initial premium. This is considered which of the following?	A consideration and an offer to buy
Ben is making application for a health insurance policy. He has been treated for heart problems in the past, but he answers no to "Have you ever had heart problems". Ben is guilty of:	Concealment
In an insurance contract, which concept refers to the fact that the value given by the two parties is unequal?	Aleatory contract
Which of the following concepts refers to the option that one party can set aside a contract?	Both unilateral and voidable
What essential element of the contract is violated by an agent who solicits to sell to an individual who has difficulty understanding what the agent is selling?	Competent parties
Sometimes the values given by two parties are unequal. This is called which of the following?	Aleatory
What happens when the principles of waiver and estoppel are combined?	A known right is voluntarily relinquished
Insurance policies are legal contracts. How do life and/or health insurance contracts differ from other insurance contracts?	They are contestable for up to two years AND The producer does not have the authority to bind the insurer
Because insurance policies are legal contracts, they are subject to the general law of contracts. Which of the following elements is not necessary for the formation of a valid contract under the law?	Insuring clause
Certain rules of construction are used to interpret a contract. All of the following are among the five main areas commonly used by the court when reviewing contracts EXCEPT:	Conditions (5 main areas are:Plain Language and Definitions, Entire Contract, Interpretation in Favor of Valid Contract, Unclear Contract of Adhesion Interpreted Against the Insurer and Written Contracts)
When looking at insurance contract characteristics, it is important to know that an exchange of a promise for a promise is called -	Bilateral
Because she gets paid on the 15th, Julia routinely pays her insurance premium (due on the 5th) late. Her policy was cancelled for nonpayment of premium. Does Julia have a legal leg to stand on to contest the decision by the insurer to cancel her policy?	Yes - because the insurer accepted late payments previously
Which of the following is not true about the Utmost Good Faith characteristic of an insurance contract?	Both parties are entitled to rely on the representations of each other to conceal and deceive
Unlike other types of insurance contracts, life insurance is not -	A personal contract
Mark was afraid that he might fail the physical exam that was required for his insurance policy, so he had his brother Robert, a marathon runner, take the exam for him. This is an example of -	False pretenses
If an insurance matter goes to court for interpretation, health insurance contracts are held to the principle of indemnity. This means -	They reimburse the insured for the amount of financial loss, but the insured cannot profit from the loss.
Which of the following could result in an insurance contract being voided?	Concealment, Fraud, Recission (all of the above)
All of the following statements are true regarding the Parol (oral) Evidence Rule EXCEPT:	Oral evidence is never admitted.
There are three types of insurers - private, government and self-insurers. Which of the following is a key difference between private and government insurers?	Contractual rights=basis for private insurance, statutes/laws=basis for gov insurance; Private insurance=coverage for private buyers, gov= provide benefits for all people (for individuals that private insurers cannot cover - usually for financial reasons)
Many different types of people are involved in the process of selling insurance. Which of the following is not involved in the selling of insurance?	Insurance commissioner
An insurance policy is a legal contract between 2 or more parties. Every contract contains all but which of the following?	Incompetent parties
A contract of adhesion provides which of the following?	A contract that is clearly in favor of one party
An aleatory contract is a contract that:	Provides a benefit for a fortuitous event in return for a cash payment
A personal contract can be any of the following types of contracts EXCEPT:	An ambiguous contract
A unilateral contract has all of the following features EXCEPT:	The offeree (the other party to the contract) is required to pay the consideration under penalty of court action.
A conditional contract depends on which of the following?	An agreement between two parties that is enforceable by law
Harvey has a major medical plan & requires a liver transplant, but the insurance company refuses to pay the claim. The policy does not specifically exclude this operation, but they don't include it either. What is the court likely to do in this case?	Order the insurance company to pay full benefits due to the ambiguous wording in the policy
Life insurance has a number of uses. An important factor in determining how much insurance one should carry is called the Needs Approach. This approach primarily focuses on -	How much money the survivor(s) need
Frankie and Julie are looking at life insurance options. Their agent is using the human life value approach. This approach considers all of the following EXCEPT:	Illness and funeral costs. (it includes the insured's age, net annual salary, number of remaining working years, annual expenses and the rate at which the dollar depreciates)
Premiums are determined after the underwriters have classified the risk based on a variety of factors. Once the individual has been classified, there are ________ factors used to determine premiums.	Three: Mortality (life), morbidity (health), expense factor (staff salaries, rent, claims payments)
Joe's agent retired new 'replacement' -replace older policies w/ sig cash value w/ newer 'improved' policies, providing charts detailing benefits. annual statement arrived, Joseph saw the cash value of new policies was less than old policies. Victim of	Twisting, a deceptive trade practice, fraudulent/dishonest conduct
Illustrations are often used to help explain complex terms of insurance contracts. Illustrations are subject to all of the following rules EXCEPT:	Illustration must state the insured's marital status and employment status.. (so not true)
When an insured purchases a new life insurance policy (or annuity) to replace an existing policy, it is called a policy replacement. Which of the following is not an important item for the producer to know?	That an existing policy is to be reissued with an increase in cash value
A producer has certain duties when issuing a life insurance policy. A producer is required to do all of the following:	Determine if the policy is a replacement,Provide applicant with a policy comparison statement,Provide insurer with a copy of the policy comparison statement, provide applicant w/ notice regarding replacement
Shelly filled out an application, paid the first premium and handed it to her agent on July 10th. The agent submitted the application to the insurer on July 12th. The insurer issued the policy on July 15th. What was the effective date of the policy?	None of the above, before a policy is in effect: 1-Application completed, initial premium collected; 2 -Application submitted to insurer; 3 -Application approved, policy issued; 4-Policy delivered.
All insurance companies employ underwriters whose job is to select, classify and rate risks. The underwriters utilize a variety of resources to aid the evaluation process. All of the following are used for underwriting EXCEPT:	Family origins..they look at family's health history, the medical history of the applicant, whether the applicant is obese, the applicant's age, the applicant's sex, and occupations or hobbies that could be considered hazardous
Amelia is 55 years old, 5'4" tall and weighs 235 lbs. She has diabetes and high blood pressure, both associated with her weight. How is a life insurance company most likely to rate Amelia's risk?	Substandard
The agent or producer conducts 'field underwriting' when they are face-to-face with the applicant. The agent is expected to use his/her observation to determine the level of risk that an applicant poses. When completing the app, what should agent know?	That the application contains 3 main parts, That he/she should correct any errors/mistakes on the application in the presence of the applicant, That he/she should collect the first premium
Jeremy's agent issued a receipt that provides coverage from the date of the application, even if Jeremy turns out to be uninsurable. This receipt is called -	A binding receipt
Not allow an individual to obtain a license to sell insurance if they have been convicted of a felony involving dishonesty, breach of trust or insurance crimes. Wishing to get a license to transact insurance business-submit exemption request to	The state insurance commissioner
Certain conduct can result in charges being brought against the alleged offender, and can result in fines and jail time. Which of the following could have a consequence of jail time?	Knowingly making false material statements with the intent to deceive, in connection with reports or documents presented to an insurance regulatory official or agency, Embezzling or misappropriating funds, Making threats of force
Convicted of a felony, did not disclose on her non-resident application to conduct insurance, also didn't include it when she applied for non-resident licenses in 4 other states(denied her license app, or revoked any licenses that she had) Repurcussions?	Her license(s) were revoked; she was prohibited from conducting insurance business ;she was fined $7,000.
The definition of using the 'needs approach' for financial planning is which of the following?	Calculating the amount of funds necessary to provide for a family based on their immediate need upon the death of the insured
When comparing participating with nonparticipating policies, which of the following is true?	Premiums for nonparticipating policies are usually lower than those for participating policies.
When a company or another person seeks to take out a life insurance policy on a person, they must prove insurable interest exists at what time?	When the application is made
________ authority gives an agent the right to operate in a normal business manner doing typical business practices.	Implied
The estimation of the amount of life insurance needed as a dollar valuation by discounting net future earnings of the insured at a reasonable rate of interest is known as:	The human life approach
A __________ is a plan to purchase a deceased partner's share of a business, funded by life insurance.	buy-sell agreement
An agent talked Martha into replacing an existing policy from another company with one from his own company, even though the replacement was of no financial advantage to Martha. The agent is guilty of which of the following?	Twisting
Which of the following is true regarding life insurance and health insurance?	Life insurance is considered a valued contract; health a reimbursement contract.
The Mayflower Insurance Company is a stock insurance company. What is its operating objective?	To make a profit for stockholders
An item that insurers look at that would constitute additional risk for the insurer is the moral hazard. Which of the following would contribute to the moral hazard consideration?	The lifestyle of the potential insured
A number of personal and family needs can be fulfilled by life insurance. Which of the following would be a common use of the proceeds from a life insurance policy?	Creation of an estate when the insured dies, Funds for funeral expenses, Income for survivors of the insured
The insurance companies look at actuarial tables and thereby know what reserves need to be on their balance sheet to cover which of the following?	Future liabilities
The fact that women live longer than men means that women's premiums should be which of the following?	Lower
Austin is covered by his employer under a key employee insurance policy. Who is usually the beneficiary on this type of policy?	The business
Which of the following life insurance approaches states that the value is determined by discounting estimated future income?	Human Life Value Approach
Which of the following is NOT an element that contributes to the gross premium for a life insurance policy?	Morbidity costs
Statistics have proven that our greatest need for income is which of the following?	When children are growing up
What is the major difference between a participating policy and a comparable nonparticipating policy?	Participating policies have higher premiums
The contract that an agent has with his/her agency grants the agent all of the following types of authority EXCEPT:	Formal authority to change the policy if it benefits the insured. It does grant the agent express authority, apparent authority and implied authority
When a company opts to self-insure, this is an example of risk ___________.	retention
In order to take out a life insurance policy on another person, you must demonstrate that you have an insurable interest. Which of the following could have an insurable interest in another person?	Spouse and Employer
All of the following are true about elements of insurable risk EXCEPT:	The loss must be catastrophic... TRUE answers are the loss must be predictable, occur to change and be chosen randomly
Which of the following is NOT a factor used in determining both life and health premiums?	Morbidity
The Swanson Company has 5 partners. How many policies will they need if they buy a partnership cross-purchase plan?	20 (Each of the partners would buy one policy on every other partner. Five partners purchasing policies on the other four partners = 20 policies.)
Which of the following factors is NOT important when selling insurance following the needs approach?	Future income... important needs approach factors: disability income, monies for an education fund, a final expense fund
Which of the following are common approaches used in determining the amount of insurance that is needed by a family?	Human Life Value Approach and Needs Approach
There are several types of whole life policies. Which of the following types of whole life policy offers flexible premium payments tied to interest rate fluctuations?	Current assumption whole life
Continuous premium, limited premium and single premium are types of whole life policies. Which of the following is indicative of a continuous premium method?	It has the lowest annual premium.
Samantha wants to purchase life insurance, but her funds are limited at this time. Her agent recommended a whole life policy that starts out with a premium that is lower than usual &increases every year for a specified number of years. Policy is called a	Graded premium life policy
As Samantha considers her options to purchase life insurance, she looks at the advantages of a graded premium life policy. Which of the following is not an advantage of such a policy?	In the beginning a greater amount of the premium is applied to the death benefit - less to the cash value.
__________ is a life insurance policy that offers the same guarantees as traditional whole life insurance with a lower initial premium that remains level for the first five years of the policy.	Modified life
Charles and Rick have started an electronics business. Their business is young and their cash flow is tight. What is the primary advantage of them purchasing a modified premium whole life policy?	They are able to purchase a larger policy than traditional whole life.
A universal life plan differs from a whole life plan in all of the following ways EXCEPT:	A whole life plan displays a detailed list of all mortality, expense and interest payments in the premium calculation.
The cash value in a whole life policy is held in the insurance company's:	General account
An agent wants to qualify to sell variable life plans. He must:	Secure a license from FINRA, as well as the state
Matthew has recently purchased a variable life insurance policy. In reading his prospectus, he sees that the various accounts have the same managers as some of the mutual funds he owns. Matthew should understand which of the following:	The insurance company maintains separate accounts for each investment and they are not co-mingled with other assets.
Universal life policies are similar to whole life in that they ___________________.	both provide death protection and cash value
A variable life plan must be a type of universal life because -	The accumulation accounts must be separated from general company assets.
All of the following are true concerning Interest Sensitive Whole Life (ISWL) EXCEPT:	The policyholder will always know the amount of cash value available..TRUE are: The death benefit is guaranteed as long as premiums are paid, Policy loans are available, Cash account accumulates tax free inside the policy
One of the most common types of life insurance is the whole life insurance policy. Which of the following is a typical characteristic of a whole life policy?	The premiums remain level for the entire period that the policy is in force, Whole life policies have a guaranteed cash value, The face amount of the policy does not change while the policy is in force.
Timothy has a plan that provides coverage for life, but the premiums are not due beyond age 65. It has guaranteed premium, accumulates cash value and the coverage will never decrease. Timothy has purchased:	A limited-pay life plan
Arnold has purchased an Adjustable Life plan. His agent has told him that he may do all of the following EXCEPT:	Quit paying premiums after 7 years when they vanish.
Term life insurance policies are used to provide temporary insurance protection - usually for a specific amount of time. If an insured provides evidence of insurability at the end of a term and qualifies for reduced premiums rates, the insured has a(n) -	Reentry term policy
Term coverage has many applications, such as mortgage protection. It gives the insured the best 'bang for their buck'. It is not without its disadvantages however. Which of the following is a disadvantage of term insurance?	It is pure death protection, It is generally not renewable after age 65 or 70, It becomes more expensive over time
Angelina purchased a policy with a face value of $100,000. She died 10 years later and the policy paid a death benefit of $50,000. Why?	Her policy was a decreasing term.
Helen and Mark have purchased a policy to cover both of their lives. They know that there are benefits and also disadvantages of such a policy. Which of the following is not something that would be regarded as a benefit of a joint policy?	Premiums and face value cannot be changed.
Group life insurance has similar characteristics and also characteristics that are different from individual life policies. Which of the following is not a similarity that the two types of policies share?	Both can deduct premium payments
Credit life insurance is a type of decreasing term insurance. It was designed to protect creditors in the event that the debtor dies. All of the following are true statements about credit life EXCEPT:	The number of insureds on the policy can range from 1-50..TRUE ARE It can be written on both a group and an individual basis, The insurance premiums are often financed in conjunction with the item purchased, The policy does not have a conversion option.
Randall purchased a 20-year family maintenance policy when he was 30 years old. He died at age 40. How many years will benefits be paid to his beneficiaries?	20 years
Combinations plans are intended to be representative of the needs of the insured. _____combines ordinary life and level term insurance &provides monthly income for a stated period of 10, 15, or 20 years, or to an age - as selected by the insured.	Family maintenance policy
Valerie is looking at types of insurance to enhance her retirement. Which of the following should she NOT consider in planning her retirement?	Term insurance
A _____________ life insurance policy is issued in a small amount and has frequent premium payments.	Industrial
The cash values of a whole life policy are affected by the interest rates. Which of the following determines these interest rates?	A formula set by the insurer
A policy that is paid up early and endows at the age of 100 is called which of the following?	20-pay life
Which of the following is a type of permanent plan that has a "corridor"?	Universal life option 1
Mr. Watson wants to purchase a policy that will provide the greatest amount of death protection and some cash accumulation at the best value for his periodic premium dollar. Which of the following policies should he choose?	Straight whole life
Which of the following statements reflects how limited pay life policies differ from straight whole life policies?	With a limited pay life policy, the premium-paying period is shorter
A family maintenance policy uses a _________ rider, rather than a ____________ rider, which is used in a family income policy.	level term, decreasing term
When constructing an adjustable life policy, which of the following is used as the base policy?	Whole life
Which of the following is a true statement regarding a 30 year limited pay life policy?	It requires payment for 30 years and endows at age 100.
What type of policy does Shelly have if the cash value in Shelly's policy increased to a point where the corridor was applied?	Universal life option 1
Which of the following policies is sold in proportioned units to cover an insured, as well as the insured's spouse and children?	Family Plan
Which of the following is a business plan where each of the partners agree to buy the interest of a deceased partner?	Cross purchase plan
With a universal life policy, which of the following is NOT a true statement?	With changes, a new policy needs to be issued immediately. TRUE: The death benefit can be modified, Cash values can be allotted toward premium payments, Premiums can be increased or decreased.
Which of the following is a conversion permitted in an industrial life insurance policy?	Of two or more policies into a single ordinary policy
Clark has a universal life policy. What are the reserves usually invested in with this type of policy?	Long-term securities
Harriet owns a 30-pay life policy that she purchased at the age of 30. When will the cash value equal the face amount of the policy?	When Harriet turns 100
Which of the following policies has premiums payable for 60 years, insurance protection for 60 years and endows at age 100?	Straight whole life policy issued at age 40.
A variable life insurance policy has which of the following characteristics?	A guaranteed minimum death benefit
Regarding a graded premium whole life policy, which of the following statements is correct?	Premiums start low, increasing each year during the early years of the contract and then remain constant for life.
Which of the following statements is true about level term?	Level term remains at a level face amount, The premiums increase at renewal, There is no requirement to prove insurability at renewal.
What type of policy has premiums paid to age 100, and upon age 100 pays the face amount as an endowment?	Straight whole life
What is the main difference between traditional life insurance and variable?	Cash values
Universal life policies are different from other whole life insurance policies because of which of the following?	Premium schedules
Which of the following is true about a modified whole life policy?	It starts with a lower premium that increases over the life of the policy
If Mr. Baker requests price quotes for identical amounts of insurance for four different types of policies, which of the following policies would have the higher initial premium?	A participating whole life policy
If an insured becomes permanently &totally disabled, a waiver of premium rider on his/her life insurance contract would allow coverage to remain in force, w/out payment of premiums, during the period of the disability. Which is not true?	The disability must always occur prior to age 75. (it is 60 or 65 yrs of age)
Daniel has a disability income rider on his life policy. With a disability income rider -	The insurer pays Daniel a specified amount each month, The income continues for the duration of the disability & there is a waiting period before benefits are paid
Mrs. Olsen worries that her health may deteriorate in the future. She wants to provide adequate coverage for herself and her family. Which rider should she consider for her life policy?	Guaranteed insurability rider
The payor rider is sometimes added to a life insurance contract on a juvenile. The purpose is to make sure that the coverage on the juvenile does not lapse if the adult (person responsible for paying premiums) becomes disabled or dies. which is NOT TRUE?	There is no added premium for this rider.
Tim has added an accidental death rider to his life insurance contract, knows he will be charged an additional premium, but lives in a dangerous neighborhood &thinks its a good idea. For which will the insurer exclude the payment of benefits?	Conducting an illegal activity, acts of war, flying an experimental aircraft
Term riders are available to help the insured to customize their life insurance contract to fit their individual needs. All of the following are common term riders EXCEPT:	Variable life... the common term riders are waiver of premium, accelerated death benefit, return of premium
Certain riders allow the insured to add people to the policy as additional insureds. Which of the following is a type of additional insured rider?	Family term rider
A long-term care rider is a provision that can be added to a cash value life insurance policy. If the insured becomes confined to a nursing home, this rider would reimburse health care expenses. Certain optional benefits may also be provided such as -	Hospice care, Adult day care, Cost of living expenses
The provision in a life insurance contract states that the entire agreement between the insurer and the insured is contained in the contract, including the app if attached, insuring agreements, exclusions, conditions, declarations &endorsements is the -	Entire contract clause
Complete insurance app 8/9, paid initial premium 8/10. insurance comp issued policy 8/16. policy delivered 8/17. The insurer has 15-day free look provision. I she decides she doesn't want it/wants premium refund, need to return the policy by	September 1st
Randall's company has taken out a life insurance policy on a key employee - John. John is the insured, but the company is the owner of the policy. What rights does John have as the insured?	None of the above: but the policy owners are guaranteed the right to: borrow against the policy, name the beneficiary, change the beneficiary, sell the policy, and assign the policy as collateral for a loan
Howard decided to name his wife Helena as the primary beneficiary, and his son Collin as the contingent beneficiary. What is the most likely circumstance for Collin to receive the benefits of Howard's policy?	When Howard dies, Helena has already passed away
Usually beneficiary is a person, but can also be an estate, trust, charity, church, or a company. beneficiary that can be changed at any time=revocable beneficiary. Irrevocable beneficiary cannot be changed so easily. All are true about irrevocable EXCEPT	The policyowner retains the right to borrow against the policy.(FALSE) true= beneficiary cannot be changed w.out written consent, policyowner makes premium payments
Common life insurance provision= __. If there is insufficient proof to show order of death when the insured &beneficiary die in the same accident, it is presumed that the insured died last, &the proceeds are payable to the named contingent beneficiary.	uniform simultaneous death act
Premium payments for life insurance are made in advance. Typically they are paid to the insurer's home office or to the agent. The premium payment mode defines the timing of the payments. Usually the payment mode with the best economy is -	Annually
Grace period =component of every life insurance contract & is the amount of time, following the date that the premium is due, that the policy will remain in force. If the insured dies during the grace period, how will it affect the proceeds of the policy?	The benefits are paid to the beneficiary, minus the outstanding premium.
To protect a policyholder from an inadvertent lapsing of a contract, the automatic premium loan (APL) provision may be added to a cash value life policy. Which of the following statements is not true about this provision?	It can be applied for at any time..is false... the APL provision usually must be requested at the time of the original policy app
Tom is an accountant and as such, likes to plan his income and expenses on a relatively finite basis. What is his best option for life insurance premiums?	Level premium
The Clark family's insurance policy lapsed when Mr. Clark was out of work. The policy was not surrendered for its cash value. Under what conditions can the policy be reinstated?	Proof of insurability may be required, All back premiums need to be paid, It has not been more than 3 years since they policy lapsed
Matt is a little short on cash and wants to access some of the cash in his life policy. A partial cash value distribution can be made. If he has the intention to repay the cash he takes out from his policy, it is considered a -	Policy loan
The nonforfeiture option is designed to protect the policyholder from losing his/her entire investment if a policy is cancelled or surrendered. Which of the following is not a nonforfeiture option?	Non-participating
A participating life policy refunds a portion of premiums paid 2 the insured in annual dividends determined by the difference b/w the gross premiums paid &loss of the insurer. the _ allows policyholder to leave the divs w/ insurer to accumulate interest.	accumulation at interest option
When the policyholder sells, gives or pledges a policy as collateral, it is called -	Assignment
When setting up a policy, the policyholder chooses how he/she wants the benefits to be paid when the policy matures. Which of the following is not a settlement option available to most policyholders?	Accelerated endowment option (its a DIV option)
Karl's grandmother has been diagnosed as being in end-stage renal failure. The ______________ provision of her life policy will giver her access to funds for rent, food and necessary medical services.	accelerated benefits
If Karl's grandmother decides to exercise the accelerated benefit option of her life policy, which of the following is a responsibility of the insurer?	Provide the policyholder with an illustration showing the effects on the death benefit & Notify policyholder that the recipient's eligibility for Medicaid could be affected
Most life insurance policies have common exclusions. That means there are circumstances, conditions, etc. in which they are not obligated to pay benefits of a policy in force. Which of the following is not such an exclusion?	Sexual orientation
Naomi is the tertiary beneficiary on her uncle's life insurance policy. Under what circumstances would she collect the benefits of the plan?	When both the primary and secondary pre-decease the tertiary beneficiary
Ron and Jack are partners. The business assignment of their life insurance policies was made to protect which of the following?	The financial interest that the lender has in the insured
Claire has a policy with a payor provision and a 9 year old child. What happens if the child becomes disabled?	Nothing happens
Ms. Swanson has a $75,000 mortgage and assigns a $150,000 policy. The assignee and the mortgagee received a check payable to them jointly. What is this agreement called?	Collateral assignment
When a minor child is the insured, which of the following is true about the payor rider?	If the premium payor dies, premiums are waived until the insured child is 25.
Which of the following statements is true about a waiver of premium rider?	A waiver of premium rider can be added to a term policy.
Carly's grandfather wants to stop paying premiums on his life policy. If he wants coverage for the remainder of his life, which of the following policies would provide this coverage?	Reduced paid-up
The front page of all insurance policies must contain which of the following?	Insuring clause
The 10-day free look period gives the insured the opportunity to look over a policy to decide if he/she is satisfied that it meets their requirements. When does the free look period begin?	When the policy is physically delivered
Sometimes an insurer will cancel a life policy. What happens to all unearned premiums?	They will be returned
Dominic has decided to cash in his life policy. How soon must the cash surrender values become available to him?	6 months
A clause that protects a beneficiary from creditors coming after the proceeds of a policy is called which of the following?	Spendthrift clause
If Louise wants to provide her beneficiary with equal payments for a specific period of time using the proceeds of her life insurance, she would select which of the following options?	Fixed period
Maggie's life policy has lapsed. There are several ways she can recover some of the value of her policy. Which of the following is NOT a non-forfeiture option?	One-year term
Most life policies have exclusions. The most common exclusion in a life policy is __________.	suicide
How long can an insurance company delay payment of a cash surrender?	6 months
A war clause exclusion can be enforced at which of the following times?	During wartime
Samuel is explaining the exclusions in a life insurance policy to his new client. Which of the following is an exclusion that would be found in a life policy?	Hazardous occupation, war & suicide
If an insured commits suicide __________, the insurer will return the premiums to the beneficiary.	within 2 years
Clarice is the owner of the life insurance policy on her husband Herb. Which of the following can she NOT do without Herb's consent?	Increase the amount of the insurance
Which of the following statements about the automatic premium loan provision of a whole life policy is NOT true?	Its use causes dividends to be withheld
What happens if an estate is named as a beneficiary on a life policy?	Proceeds are included in the gross estate.
Jennifer has a $200,000 life policy. Her husband is a 50% beneficiary. Her son and daughter are beneficiaries with 25% each. Before she dies, she takes out a $100,000 loan, which is not repaid. What does her daughter get upon her death?	$25,000
Which of the following is true about the rejected business rule?	It is a circumstance where the agent's company refuses to write the policy.
If Heather misstates her age at the time of policy issue, what action will the insurer take in response to such a misstatement when a claim is filed?	The amount payable to beneficiaries is equal to the amount that the premium would have purchased if her correct age had been known.
With regard to life insurance settlement options, which of the following statements is true?	If the owner did not specify a settlement option, the beneficiary may select any option.
Which of the following situations does NOT allow the policy owner complete control of the policy?	If an irrevocable beneficiary has been named on the policy
36 months after a policy was issued, the policy insured committed suicide. What is the insurance company's liability in this situation?	The face amount
Besides a limited period of time after the discontinuance of premium payments, what else may be required in order to reinstate a lapsed policy?	Payment of any outstanding loans, as well as payment of any back premiums, Proof that he/she is still insurable, Payment of interest on any past-due amount
Insurance companies do not have to pay claims or benefits immediately. How long can an insurance company delay payment of cash surrender values?	6 months
Julie's father has an accidental death and double indemnity provision in his life policy. Under what circumstances will his policy pay an amount greater than the face value of the policy?	Accident
All of the following statements are true regarding the waiver of premium rider for a life insurance policy EXCEPT:	All waived premiums must be repaid if the policyowner recovers from the disability.....the policyowner is not required to pay back waived premiums if he recovers from the disability
Which of the following is not included in the insuring clause?	The contingent beneficiary
A nonforfeiture option that provides continuing cash value buildup is called which of the following?	A reduced paid-up option
The ___________ is intended to protect the policyholder against unintentional lapses in coverage.	grace period
What happens if there is an outstanding policy loan upon the insured's death?	The loan, plus any interest due, is deducted from the death benefit.
The reinstatement provision in a life policy _____________.	requires the policyowner to pay, with interest, all premiums that are in arrears in order for the policy to be reinstated
Which of the following is NOT a purpose of the entire contract provision?	The provision makes it clear that the contract is a three party agreement among the insured, the insurance company and the agent...... it's a two party agreement, not 3
When Joshua took out a life policy, he overstated his age. What will the insurer's course of action be if it discovers the misstatement after the insured dies?	Pay an amount equivalent to that which the premium would have purchased at the correct age
A husband wants to name his wife as a beneficiary of his life policy, but wants to retain all of the rights of ownership. Which of the following beneficiary designations would be most appropriate?	Revocable beneficiary
Margaret may be late paying the premium on her life policy. What is the typical grace period on a life policy?	30-31 days
All of the following are ways in which dividends may be used by the policyowner EXCEPT:	As stock in the company
All life insurance policies have which of the following standard provisions?	Grace period
If a policy has been ___________, it will not be reinstated.	surrendered for its cash value
Which of the following statements is an example of the insuring clause?	"Subject to the provisions on the following pages of this contract, the insurance company will pay the death benefit to the named beneficiary. The death benefit will be paid on receipt of due proof of death of the insured and surrender of this policy."
At what point does an insurance policy become incontestable, even if fraud is evident?	2 years
Mollie is purchasing a new life insurance policy. Under which of the following circumstances would this new policy be considered a replacement?	When existing life insurance is reduced in face amount, is surrendered and is continued as an extended term
Gary became disabled 10 months before he turned 65. His disability lasted 36 months. How long will the company waive his premiums under the waiver of premium clause?	30 months
Underwriting is the name of the process used by insurers to rate risk. Once the risk has been rated, it is classified. Which of the following is the classification for an individual that would pose the least amount of risk to the insurer?	Preferred
Once the insurer has looked at the facts pertaining to a life insurance applicant, the insurer will categorize the risk and calculate premiums based on which of the following?	The risk classification and mortality, interest earnings and expenses
Which of the following would have the greatest impact on the underwriting process for risk on an individual?	He/she is grossly overweight.
Which of the following is commonly used when investigating the insurability of an applicant:	An attending physician's statement, a credit report, contacting the Medical Information Bureau (MIB)
The producer is responsible for field underwriting. Field underwriting is done when the producer is in front of the applicant. Which of the following is not expected from a producer as part of the field underwriting?	The producer should note how many children the applicant has in the house.
What is the main purpose of the M.I.B.?	Prevent fraud and misrepresentation
The agent's report, in which an agent can comment on the client, the situation and/or circumstances, or any other thing that the agent thinks is noteworthy, is located in which part of the application?	Part III
For a life insurance policy, when can a statement of good health be required?	When the application is made and no initial premium is paid
Who completes a medical report when required by the insurance underwriters?	A physician or paramedic
Credit scores are used by insurers when determining insurability of a client. Which of the following regarding the Fair Credit Reporting Act (FCRA) is FALSE?	The FCRA requires insurers to explain the reason(s) behind any issued denials of coverage.
Insurance companies investigate potential insureds before issuing a policy. In which of the following reports would the insurer have information about a prospective insured's lifestyle?	Inspection report
What kind of safeties or guarantees are provided by the Fair Credit Reporting Act?	It requires that the applicant for insurance be informed that a consumer report may be requested.
Marcus is an applicant for a standard risk policy. When is he considered to be covered?	When the insurer mails the policy for delivery (which had the initial one month premium submitted with the application)
The M.I.B. (Medical Information Bureau) is a valuable tool in the insurance industry. Which of the following is a true statement pertaining to the M.I.B.?	The medical information contained in the M.I.B. is received from insurance applications.
Which of the following statements is NOT true about the Fair Credit Reporting Act?	It is a state law ....it is actually a federal law
Part III of the application contains which of the following?	The agent's report
The regulation of insurance at the state level was the result of which of the following?	McCarran-Ferguson Act
How is a life insurance agent similar to a field underwriter?	He/she actually sees the applicant.
When conducing business, a life insurance agent can use which of the following titles?	NoNe.. agents may not use investment advisor, financial planner or financial consultant
Insurance companies are required by the ___________ to notify an applicant, in writing, that an investigative consumer report may be made on him.	Fair Credit Reporting Act
What is the maximum benefit period of preliminary term for interim coverage?	11 months
Which of the following is NOT part of the insurance underwriting process?	The notifying of risks
The part of the application that provides information about an applicant, such as financial condition, character, purpose of sale, and how long the agent has known the applicant, is-	The agent's report
Mrs. Selleck runs a Christmas store and needs $200,000 of permanent life insurance in June. Because her business is cyclical, she is "cash poor" until October. How can Mrs. Selleck obtain the insurance she needs?	Preliminary term for interim coverage
Under the Fair Credit Reporting Act, when an applicant has been denied insurance coverage because of information contained in a consumer report, the applicant is entitled to which of the following?	The right to obtain disclosure of the source of the information in the consumer report
Group insurance regulations require that in order to be considered an eligible group, certain criteria must be met. In order for a professional association to be considered an eligible group, they must meet all of the following EXCEPT:	Have at least 20 members
Group insurance plans have certain characteristics and provisions. Which of the following is a standard group insurance provision?	A certificate of insurance must be provided to each insured.
Underwriting considerations for group plans employ which of the following considerations?	Groups usually do not have a requirement for medical exams.
Group policies must include an option to convert from the group policy to an individual policy if-	The individual loses coverage due to loss of employment or because the master policy was cancelled
The Acme Plumbing Company has just made arrangements for group term life insurance. Which employees would most likely be excluded from this insurance?	Part time employees
Acme Plumbing is purchasing a group life plan for its employees. What type of plan is most common for this type of purchase?	Annual renewable term
Which of the following is a false statement regarding group credit life policies?	The debtor is the beneficiary.
Mr. Jones was laid off from the Acme Company on August 3rd. He died on August 30th. Under The Acme Company group policy, what would the insurer pay?	The full face amount of the policy
Mrs. Brown owns a boutique. She has 20 employees that are covered by a group life policy from Sunflower Insurance. Which of the following is true if Mrs. Brown decides not to renew her policy and ceases paying the premiums?	Sunflower Insurance will notify Mrs. Brown, who will then notify her employees of the cancellation.
What conversion rights does a surviving spouse have under a group plan?	The spouse has the same rights that the employee had.
Joy's employer pays the entire premium on the company group policy. This type of plan is called which of the following?	Non-contributory
Employees may NOT be classified for group life insurance by which of the following?	Sex or age
What kind of group would be covered by a franchise life insurance plan?	Groups smaller than the minimum number required by state law to cover a group of people that do not qualify for true group insurance
The SGLI (Servicemember's Group Life Insurance) provides coverage for personnel enlisted in the service. What type of basic coverage is issued to an eligible member under the SGLI program?	Term life insurance
What is the maximum amount of insurance available for dependents under an employee's group coverage?	50% of the employee's coverage
Which of the following is required to qualify for association group life?	The group has been in existence for 2 years.
A fraternal benefit program should have all of the following components to qualify EXCEPT:	Be incorporated under state law
In order to be considered an association, a group must:	Have been in existence for 2 years or more and be a natural group
The Acme Baking Company just purchased group life insurance plans for its employees. What will the employees receive as proof/evidence of their insurance?	A certificate of insurance
Which of the following would not qualify for a group life policy?	Family groups
Which of the following is part of the termination clause in a group life plan?	An employee is guaranteed at least 31 days of protection.
Neighborhood Plumbing Company has decided to let their group insurance coverage that they have with Global Insurance Company terminate. Which of the following correctly states the obligations of the parties involved?	Neighborhood Plumbing Company must notify their employees.
Which of the following cannot be used to determine group benefits?	Age
The normal conversion benefit available to terminated employees under a group life insurance policy is:	The employees may convert to an individual whole life policy within 31 days without having to submit evidence of insurability.
Which of the following is true about VGLI (Veterans Group Life Insurance)?	It is convertible term insurance and it is 5-year renewable insurance
For a single premium deferred annuity, the ___________________ is the time between the purchase date and the date when benefits begin.	accumulation phase
The individual on whose life the annuity has been issued is the annuitant. Which of the following is a right and/or responsibility of the annuitant?	The annuitant pays the premiums and chooses the beneficiary
Insurance companies use 5 major factors to determine annuity premiums. All of the following are common factors used to determine premiums for annuities EXCEPT:	The marital status of the annuitant.... The 5 factors are: the annuitant's age and sex, the assumed interest rate, the periodic income amount and payment guarantees, and also, company expenses (or load)
There are two basic types of annuities - immediate and deferred. Which of the following is not a true statement about deferred annuities?	A deferred annuity payout period must begin within 12 months of purchase.
The Oglobo Company started a marketing campaign to provide prospective applicants w/ info needed 2 make a decision on whether or not to purchase an annuity. must determine their target audiences. Who would be most likely to purchase an immediate annuity?	Man who received a settlement for injuries occurring from an automobile accident
Mrs. K, 78 years old, has received the benefits of her husband's life insurance policy. Although she is quite frail, her agent has recommended that she invest the proceeds in an immediate annuity. Her grandson does not think it is her best option. Why?	An immediate annuity is a suitable option for a healthy individual who probably will live longer than most people in his/her age group, and Because her life expectancy is not very good, she will prob lose most of her investment
As with all investments, there are risks and rewards, advantages and disadvantages. All of the following are disadvantages of immediate annuities EXCEPT:	In the event of a downturn in the market, the benefit payments remain level.
For those considering an immediate annuity, which of the following is not an advantage of this type of investment?	Loan privileges
All periodic premium annuities are _______________.	deferred
Margaret began receiving monthly benefits from her annuity in November of 2011. In May of 2012 her aunt passed away and she received an inheritance. She would like to provide a guaranteed income stream for twenty years. What are her options?	She can purchase a life annuity certain.
Annuities offer various premium payment options. Which of the following is not an annuity premium payment option?	Indexed premium
The owner of an annuity can stop making premium payments during the accumulation period without losing the value that has accumulated in the annuity. The right to the cash value that has accumulated in the annuity is called the -	Nonforfeiture option
Annuities have a variety of payout options. These options provide the annuitant with choices on how the annuity settlement will occur. All of the following are annuity payout options EXCEPT:	Flexible payment
Izzy has funded a fixed annuity over time and has a substantial account value. He wants to remodel his home before retirement &would like to make a policy loan to pay for the home upgrade. Main consideration when he decides how to structure the loan?	Annuity plans do not have loan provisions.
Mary has reached age 65 and wants to begin a monthly income on her fixed annuity. She has funded her plan with after- tax contributions, and wants to know what her tax liability will be going forward. Her agent explains her tax will be calculated using:	The exclusion ratio
Nick has paid a large lump sum of cash to the insurance company for an immediate fixed annuity. That money will be invested by the insurance company in what fund?	The company's general fund
A fixed annuity may offer any of the following income options EXCEPT:	A joint income for three individuals (2 not 3)
Frank has set up a monthly payment from his fixed annuity. He knows that he will receive $2,000 per month until his death. Frank's family has a history of living well into their 90s. What is Frank's biggest risk if he lives that long?	Inflation
Earl has deposited a large lump sum with an insurance company and he will begin receiving monthly payments next month. Earl has purchased:	A single premium immediate annuity
When considering a variable annuity, the prospect should review all of the following EXCEPT:	The expected return for each separate account
A variable annuity has each of the following features EXCEPT:	A minimum guaranteed income benefit
Variable annuities have all of the following features EXCEPT:	Money can be withdrawn at any time without penalty.
To have an approved presentation of a variable annuity the prospect must receive which of the following documents?	A prospectus and an approved illustration
In order to sell variable annuities, the sales person must be qualified. What is required to qualify to sell variable annuities?	Registration with FINRA and an insurance license from the state
Variable annuity withdrawals are taxed on what basis?	LIFO
An equity-indexed annuity will have all of the following features EXCEPT:	Dividends from the index chosen, if any are paid
An equity-indexed annuity will provide which of the following benefits?	A guarantee that the account balance will not decline below the initial deposit
A market value adjusted annuity differs from other fixed annuities in which of the following ways?	A market rate annuity will usually credit a higher interest rate than a fixed annuity.
Market value adjusted (MVA) annuities are fixed annuities. When does the market value come in to play?	When the annuity is surrendered early.
An ordinary deferred annuity with a decreasing term life insurance rider is called a -	Retirement income annuity
The owner of an insurance policy and the insured are usually the same person. However, sometimes the policy owner is a different person. This is known as -	Third party
There are many types of retirement plans. Which of the following is not a qualified plan?	Executive bonus
Additional tax qualified retirement plans may include any of the following EXCEPT:	501 (c) (3) plan
Bill has several employees that he would like to retain for the long term good of his company. He paid in the max allowed on his qualified retirement plan. What is a possible choice that would provide both Bill &his key employees an additional benefit?	Deferred compensation plan
A qualified retirement plan differs from a non-qualified retirement plan in all of the following ways EXCEPT:	Contributions to a non-qualified plan are deductible on a current basis.
An individual may deduct an IRA contribution from his taxable income in the following situation:	You or your spouse are not covered by a company sponsored qualified plan
A Roth IRA differs in all of the following ways from a traditional IRA EXCEPT:	A Roth contribution is deductible under specific circumstances....... in reality, roth IRA contributions are never deductible
Max is leaving his current employer for a new position. He has accumulated a tidy sum in his 401 (k) plan. What is his best option to maintain control over his account?	Max should have his funds transferred directly to a new trustee without taking possession of the funds.
A 1035 exchange is allowed on any of the following transactions EXCEPT:	An annuity to a life insurance policy
Mr. Brown knows that his social security benefits are determined using a formula based on his earnings. Which of the following is a traditional benefit of the social security program?	Monthly disability benefits for disabled workers and their dependents, Monthly benefits for spouses of retired workers, lump sum death benefit
Mrs. Jurandi owns a small bakery. What is her social security tax rate?	12.4% (she pays the employee and employer 6.2 x 6.2)
Gail surrendered her life insurance policy for its cash value. Why was some of the cash value she received taxable?	The cash received exceeded the premiums paid.
If the value of each annuity is $6, and the annuitant (Andrew) receives $1,800 per month, how many annuity units does Andrew receive?	300.. ($1800 / $6)
Which of the following is a benefit provided by an annuity contract that makes it different from other investments?	An annuity contract provides income for life.
Jose purchased an annuity for $20,000 and the expected return is $40,000. If the annuity pays $600 per month, what portion of the $600 is taxable?	$300 (half of it)
A variable annuity separate account will be invested in which of the following types of investments?	Equity investments
Carla has invested in an annuity to have money at retirement. What factors will determine the amount that Carla will receive at retirement?	The interest rate, the total capital and the payout option selected
Which of the following statements is true about a life income annuity?	If the annuitant is older, the payment is larger.
The payout option for an annuity is selected by the owner of the annuity. Which of the following is true?	Once the payout option is selected, it cannot be changed after payments begin.
___________ determine(s) the value of a separate account in an annuity during payout.	Annuity units
Sophie has a variable annuity. She wants to know when she reaches retirement, what percent of the total value of all accumulation units credited to her account will be converted to annuity units?	100%
What is the benefit-paying period of an annuity called?	Annuity period
Several factors impact annuity benefits. Which of the following is NOT an annuity benefit factor?	Age of beneficiary
What is the primary function of an annuity?	Income for life
Clancy has bought a single premium immediate annuity. He must start taking payments _____.	within 12 months
What will Perry, an annuitant, receive if he selects a life with period certain as his annuity option?	He will receive a payout for life or a fixed number of years - whichever is last.
Sasha purchased an immediate annuity. How soon can the payment begin?	Within 1 year or less from the time it is purchased
How is the benefit amount that an annuitant receives from a variable annuity determined?	Number and value of annuity units
George has a fixed annuity. How does the change in interest rates during the annuity period caused by increased interest rates affect his payout?	The payout remains the same for life.
What kind of annuity promises two annuitants full income for both their lifetimes?	A joint and survivor life annuity
James wants to have his annuity pay him until he dies, with no payments to anyone after his death. Which of the following annuities will best serve his wishes?	A straight life annuity
When does a deferred annuity begin to pay benefits?	At a specified number of years after purchase, but no sooner than at least one year after purchase
An annuity is used to protect the annuitant against which of the following risks?	The risk of outliving one's income
James is an annuitant receiving monthly payments from a variable annuity under a joint and 2/3 to the survivor option. What will the surviving annuitant receive when the primary annuitant dies?	Monthly payments for life of a dollar value of two thirds of the annuity units that were previously being distributed
Who is responsible for regulating the separate account of a variable annuity?	SEC
The ____________ is used to calculate the tax-free portion of an annuity payment.	exclusion ratio
Averaging out the cost of units during pay-in period is referred to as which of the following?	Dollar cost averaging
Who of the following are regulated by NASD when selling variable annuities?	Brokers and dealers
For what period of time does a joint and survivor income option on an annuity pay?	It ceases when the second annuitant dies.
Who is responsible for regulation of variable annuities?	SEC and state insurance department
Can Vicki, who has a valid life insurance license in the state, also sell variable annuities?	Yes, if she has a Series 6 or Series 7 license
When does the fixed income, paid to two or more annuitants at the same time, under a joint and survivor annuity, stop?	At the death of the last annuitant
An annuitant bought an immediate annuity at the age of 60. When she turned 65, she decided that she wanted to stop the annuity, get a refund of the remaining amount, and move to Brazil. What does the annuity company do?	Continue sending the monthly checks
The benefit amount that an annuitant receives from a variable annuity is determined by which of the following?	The number and value of annuity units
Before variable annuity benefits can be paid out, accumulation units must be converted to:	Annuity units
Tax sheltered annuity plans are available to employees of the following type of organizations:	Public school systems and other "not- for- profit" groups
Daniel accumulated $80,000 in his annuity. He is receiving $800/month and each unit is worth $2.00. How many units does he receive each month?	400
Variable annuities were created in order to do which of the following?	To protect against inflation
A variable annuity company's separate account is regulated by which of the following?	The SEC
Which of the following retirement plans does NOT automatically qualify for a federal income tax deduction?	Single premium deferred annuity
Which of the following is entitled to a paid-up deferred variable annuity?	Annuitants who discontinue premium payments
Rich wants to have income for life and he also wants his wife Pam to continue to receive income for the rest of her life upon his death. Which of the following should Rich choose?	A joint and survivor annuity
If an annuity owner receives $2000.00 a month, and the value of each annuity unit is $2, how many units does he receive monthly?	1000
All of the following are purposes of an annuity EXCEPT:	To completely replace income after retirement... the true ones are: to provide an income stream, to provide against the risk of living too long, to reduce depletion of the retirement fund
Jacob wants to receive income for the rest of his life. He wants his daughter to continue to receive the income for her life - after he dies. Which of the following should Jacob choose?	Joint and survivor
Which of the following is NOT often included in variable annuity options?	A lump sum payout
Variable annuities guarantee ___________.	against outliving your income
What is the period called from when the annuity contract is issued to when the payments start?	The accumulation period
Accumulation units must be converted into ________ before variable annuity benefits can be paid out.	Annuity units
Anthony is continuing to buy when the stock market levels are fluctuating. This activity, which tends to average out the cost of units during the pay-in period, is called -	Dollar cost averaging
Brad purchased a fixed annuity for $40,000 that has a guaranteed benefit of $50,000. What will be the exclusion ratio?	80% ($40,000/$50,000)
Who is responsible for the regulation of variable life insurance?	SEC and state insurance department
Which of the following is NOT a characteristic of a "joint and survivor" annuity?	The company cannot use the sex of the individuals as a payout factor.
Under a variable annuity policy, when will a paid-up deferred variable annuity be issued?	When premium payments are discontinued
What must happen before the payout phase begins on an annuity?	Accumulation units must be converted to annuity units
How is an immediate annuity purchased?	With a lump sum payment
Which of the following is the annuity option which will not cover life's contingencies?	Period certain
Kimberly works for a nonprofit, charitable organization. What distinct class of retirement plans is available to Kimberly and other employees of certain nonprofit charitable organizations?	A tax-sheltered annuity
In a variable annuity, who is responsible for regulating the separate account?	SEC
Anita's sister funded her annuity with a single lump-sum premium. Anita ,however, is looking at funding her annuity over time. Which of the following is not a true statement about annuities funded with periodic payments?	There is no option for flexible premiums
Some retirement plans are deemed nonqualified and do not have the tax benefits of qualified plans. A nonqualified plan:	Can be a deferred compensation plan
Qualified retirement plans need to be approved by the IRS. When an employee withdraws from a qualified plan, which of the following is true?	Withdrawals are taxable income.
Traditional IRAs are a way for individuals, especially those without employer funded retirement plans, to save for retirement. All of the following are true about traditional IRAs EXCEPT:	First time homebuyers can withdraw $10,000 with no tax liability.......they will owe tax on interest in the IRA
Mia moved to a new city to take a new job. When she finally got around to transferring the funds from her old IRA to a new IRA, she was surprised to see that she was assessed a tax of 20%. Why was this tax assessed?	She took more than 60 days to complete the transfer.
Shondra wants to begin to receive payments from her traditional IRA without incurring negative tax consequences. At what age can she begin to receive the payments and not have the consequences?	59 1/2 years
A "matching element" is part of which of the following?	401(k)
Which of the following are deemed qualified retirement plans?	Defined benefit plan and defined contribution plan
Which of the following is responsible for the regulation of retirement plans?	ERISA
Retirement plans are important to employers because:	Retirement plans attract good employees and help employees in retirement.
Jasmine has a Roth IRA. At what point in her life must she take distribution?	She is not required to take distribution.
In order for a retirement plan to be qualified, it must allow enrollment of all employees who have:	Completed 1 year of service and reached age 21
Which of the following answer choices correctly lists the requirements for a defined benefit pension plan?	Definite determinable benefits; Systematic payment of benefits; Primarily retirement benefits
Which of the following is provided in a money purchase plan?	Fixed contributions/undefined benefits
What is the maximum amount that an employee can contribute to a SEP?	25% of his/her compensation up to a maximum of $49,000, whichever is less.
Which of the following is NOT a defined contribution plan?	Salary sharing plan
Which of the following is an example of a non-tax advantage of retirement plans for employees that is not an advantage for the employer?	Forced Savings
___________ are retirement plans which are similar to Keoghs.	Corporate plans
Carol wants to start saving in a traditional IRA. What is the latest that she can start saving in a traditional IRA?	Age 70 1/2
Which of the following is NOT a requirement of a qualified corporate retirement program?	Employee contributions must be vested after 2 years......they are actually vested immediately
Tim is in good health. If he takes receipt of his traditional IRA funds before _________, a tax penalty would be imposed.	59 1/2 years of age
At what point are an employee's contributions into a qualified retirement vested?	Immediately
Which of the following is a plan that meets requirements for the federal government in order to receive favorable tax treatment?	Qualified
Sandy's company has a corporate retirement plan. Which of the following plans could she have?	401(k)
Roth IRAs are different from traditional IRAs. Which of the following is not true about Roth IRAs?	Qualified distributions must occur after 2 years in the event of the death or disability of the individual with the account......must really occur after 5 years
Kenny wants to start collecting from his traditional IRA, but he doesn't want to incur any penalties. At what age should he start collecting from his traditional IRA to avoid penalties?	59 1/2
All of the following are considerations on whether to include life insurance proceeds in determination of federal estate taxes EXCEPT:	The deceased was not the policyowner.
Premiums for life insurance are not tax-deductible and death benefits, received in a lump sum, are not taxable. Which of the following is taxable?	Interest on life proceeds paid in installments
Group life and individual life have similarities. What is a major difference between group and life policies regarding taxation?	Premiums paid by employers are tax deductible.
A modified endowment contract (MEC) is an over funded life policy and as such, is subject to taxation. Which of the following pertains to MECs?	Once an MEC, always an MEC; Funds withdrawn are subject to LIFO (last in, first out) tax treatment; Any policy exchanged for an MEC is automatically classified as an MEC.
What is the tax liability on divisible surplus received by a recipient?	Tax-free
Kevin's employer pays his premiums for the group life insurance policy. The premiums are:	Tax deductible under certain conditions
Angie cashes in her life policy. She had paid $10,000 in premiums and received $15,200 in cash surrender. How much of this is taxable?	$5,200
Which of the following statements is NOT true about taxation of life insurance?	The difference between premiums paid and death benefit are taxed to the spouse under a lump sum settlement.... they are NOT taxed to the spouse
A portion of a fixed dollar life annuity payable to a retired worker is not taxable. How is the nontaxable amount determined?	An amount determined by the exclusion ratio
What is the tax rate for dividends received on accumulation units?	The gains are not taxable as accumulation units. They are taxed later when the accumulation units are converted to annuity units. When the funds are withdrawn, the taxes are all calculated at the ordinary income rate.
Michelle received a lump sum payment from her uncle's policy (as the named beneficiary). Are the proceeds subject to taxes if the policy was purchased with after tax dollars?	State income taxes - sometimes
Are there limitations that when placed on universal life, result in favorable tax treatment?	Yes, a certain percentage of all premiums must purchase death benefits
Dividends are not taxable as income due to which of the following reasons?	They are a return of part of the premium paid.
Rick is considering surrendering his life insurance policy for its cash value. Which of the following is a major consideration that could affect his decision to do this surrender?	The cash received in excess of the premiums paid is taxable.
Gregory is trying to examine the different tax issues to determine how he wants to set up his life insurance policy. Which of the following statements is not true about tax liability for life insurance proceeds?	Lump sum payments are taxable as income, Installment payments are not taxable as income, Both principal and interest are always taxed
If a policy becomes a modified endowment contract (MEC), the tax consequences are significant. Which of the following is not true about MECs?	If the policyowner is younger than 59-1/2, there is always a 10% penalty tax......if they are younger and disabled there is no tax
The corridor test relates to the amount of pure insurance in a contract. If a policy fails to meet the cash value test, the tax implications are significant. All of the following statements are true EXCEPT:	After age 60 the cash value ratio begins to scale down.
Premiums for life insurance are not tax-deductible and death benefits, received in a lump sum, are not taxable. Which of the following is taxable?	Interest on life proceeds paid in installments.
Life insurance and annuity premiums, paid by an individual, are generally not tax deductible. There are exceptions ,however, to this rule. Which of the following premiums could be tax deductible under certain conditions?	Retirement accounts
Martin surrendered his whole life policy. The policy had a cash value of $50,000. Over the duration of the policy, Martin has paid total premiums of $42,000. What amount is subject to be taxed as ordinary income?	$8,000
Who pays tax on personal life insurance given as a gift?	The gift-giver.
Group life and individual life have similarities. What is a major difference between group and life policies regarding taxation?	Premiums paid by employers are tax deductible
All of the following are federal income tax free transactions for a life insurance policy EXCEPT:	Gain on policy surrender value
Maria's grandmother is applying for living benefits paid by her life insurance policy because she is terminally ill. All of the following are true statements about these benefits EXCEPT:	When she dies, the full death benefit will be paid and be taxable.
Which of the following statements is true about how annuity payments are taxed?	The investment made by the purchaser is returned in equal tax-free payments & The part of the annuity payment that qualifies as earnings is reported as income during the year that the payment(s) are received and is taxable.

How must a replacing producer respond to an applicant wishing to replace existing life insurance quizlet?

How must a replacing producer respond to an applicant wishing to replace existing life insurance? The producer must provide the applicant with a Notice Regarding Replacement.

Which action should a producer take when submitting an insurance application to an insurer?

One of the actions a producer should take when submitting an application is to advise the insurer of any other relevant information not contained in the application.

Where a replacement is involved the producer must do all of the following except?

Exam Prep.

When must the policy summary be given to the policy owner?

The policy summary must be delivered prior to or on the date of policy delivery. Either document must be provided to the client upon request.

Tim purchases an insurance policy from a producer. the producer must present to tim a notice

How must a replacing producer respond to an applicant wishing to replace existing life insurance quizlet?

Which action should a producer take when submitting an insurance application to an insurer?

Where a replacement is involved the producer must do all of the following except?

When must the policy summary be given to the policy owner?

zusammenhängende Posts

Werbung

NEUESTEN NACHRICHTEN

Wissen Sie wissen Sie wer Radetzky ist

Wie besprochen sende ich Ihnen im Anhang die?

Wie heißen die adoptivkinder von christina aguilera

To evaluate quality, it is helpful when organizations develop ______ system.

What models of decision making explain how managers really come to decisions

Which of the following outlines the overall authority to perform an IS audit

Wo bekommt man am meisten für seine Rente?

Duplex zimmer bedeutung

Transformers 5 deutsch der ganze film

What is the Internet standard for how Web pages are formatted and displayed?

Werbung

Populer

Werbung

Um

Legal

Hilfe

Sozial