1
All of the following are correct pertaining to Decreasing Term, except:
The premium declines throughout the term of the policy
A finds they are no longer able to pay premiums on their $50,000 Whole life policy, but needs that amount of protection for A's family. Which nonforfeiture option provides this protection?
A.Reduced Paid-Up
B.Paid-up
C.Extended Term
D.Fixed Amount
C. Extended Term
When a policy lapses due to nonpayment of premium, which nonforfeiture option is the automatic option?
A.Automatic Premium Loan
B.Reduced Paid-up
C.Extended Term
D.Cash Surrender
C) Extended Term
Which of the following scenarios will trigger an income tax due?
Interest earned on dividends left on deposit with the insurer
Life insurance policy premiums establish a ____ in the policy for tax purposes.
Cost basis
The name of the beneficiary designation that will pay a deceased beneficiary's share to their heirs of their beneficiary who predeceases the insured is called:
A) Per class ; B) Per Stripes; C) Per individual; D) Per capita
____ is a contractual agreement that allows a company or person to buy one or more of the rights of ownership in a life policy on the life of another person, should the owner/insured become terminally ill.
A.Living Needs Rider
B.Viatical Settlement
C.Leveraged insurance Agreement
D. Emergency Fund Rider
B. Viatical Settlement
XYZ insurer has decided to issue a policy to a particular applicant. What is the next step in this insurance transaction?
A) The applicant will have to send a premium check to XYZ
B) XYZ will mail a certificate of insurance to the applicant
C) XYZ will notify the applicant by mail that the policy is on its way
D) XYZ will send the policy to the producer for delivery to the insured
D) XYZ will send the policy to the producer for delivery to the insured
What must insurers use to gather required information and producers must receive product-specific training for each annuity they market to seniors before they may even market the annuity?
Suitability questionnaires
The continuation of coverage under a particular benefit provided under a group policy following discontinuance with respect to an employee or dependent who is totally disabled on the date of discontinuance is called:
Extension of benefits
T is the insured/owner of a $50,000 life insurance policy, and dies leaving 4 surviving children: M, C, L, and B. Each child receives $125,000 upon T's death. This is an example of what type of dsitribution?
A) Pro forma; B) Per capita; C) Pro rata; D) Per Stripes
B) Per Capita
A good example of Risk Reduction might be:
A.When one takes action to minimize the severity of a potential loss
B.Insuring only those risks that threaten the financial stability of the insured
C.The elimination of the exposure to a specific risk
D.The transfer of the risk to an insurance company
A) When one takes action to minimize the severity of a potential loss
A Convertible Term Life Insurance policy may be converted ____ time(s) for a permanent life policy based on the original or attained age.
1
If an insured wanted to choose the nonforfeiture option that would provide coverage for the longest period of time, then they should choose:
Reduced Paid-Up
Who receives the endowment value of a Whole Life policy?
The policyowner
If a father were to add a child rider to a policy to cover his children, when would coverage become effective for a newborn?
A) At 1 year of age
B) At birth
C) At 14 or 15 days of age
D) At 14 or 15 weeks of age
C) At 14 or 15 days of age
When an insurer wishes to implement changes to a group life policy, who must be notified?
A. The group sponsor
B. Management only
C. Any beneficiaries
D. Each participant individually
A. The Group Sponsor
When an insurer wishes to implement changes to a group life policy, who must be notified?
The group sponsor
An insurance solicitor can be employed by how many agents or brokers at any one time?
1
Which of the following is a policy not issued with a rating?
A) Lien plan
B) Preferred rate
C) Tabular rate
D) Flat rate
B) Preferred rate
A guaranteed no lapse rider is attached to what type of policy, ensuring the policy will not lapse if the cash value is reduced to zero?
A) Variable whole life
B) Adjustable life
C) Universal life
D) Family plan
C) Universal life
An insured with a participating life insurance policy receives annual dividends. The insured has opted for the insurer to use these funds to increase their overall amount of insurance. This would refer to which option?
A.Paid-Up Additions
B.Premium Reduction
C. One year term
D. Reduced Paid Up
A. Paid-up Additions
As specified by the California Insurance Code, a group policy must allow for the adjustment of premium or amount of insurance payable in the event of:
An employee misstating their age
Under an annuity with a Joint Life payment option, what will the survivor receive upon the death of the first annuitant?
Nothing
Which of the following is NOT a purpose of the life insurance & annuities replacement rules?
A) To reduce the opportunity for misrepresentation
B) To protect the interest of life insurance and annuity purchasers from the loss of benefits
C) To regulate the activities of agents and insurers, and establish penalties for failure to comply with the rules
D) To assure that the producer receives enough information to make an informed recommendation
D) To assure that the producer receives enough information to make an informed recommendation