WILDCARD
Which of the following is NOT true regarding policy loans?
A. A policy loan may be repaid after the policy has been surrendered
B. Policy loans can be repaid at death
C. An insurer can charge interest on outstanding policy loans
D. Money borrowed from cash value is taxable
What is D. Money borrowed from cash value is taxable
All of the following statements are true regarding group insurance EXCEPT
A. Participants in group insurance are issued a certificate of insurance
B. Small groups such as labor unions are eligible for group
C. The group sponsor is the policyholder
D. Participants in policy each receive a policy
What is D. Participants in policy each receive a policy
Participants receive a certificate of insurance, but the sponsor is in control of the policy
Licensees must notify the Department within how many days of a change of address?
A. 15 days
B. 10 days
C. 30 days
D. 20 days
What is C. 30 days
Rule of Thumb if you don't know how many days or years always stick with:
30 days & 5 years
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
A. Term insurance only
B. Permanent insurance only
C. Any form of life insurance
D. Univeral Life only
What is C. Any form of life insurance
Any form of life insurance can be used for a buy-sell agreement
Which of following would be considered a nonqualified retirement plan?
A. Keogh Plan
B. Split-Dollar Plan
C. Roth IRA
D. 401(K)
What is B. Split-Dollar Plan
NonQualified Plans=Split-Dollar
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public-school teachers is?
A. Roth IRA
B. SEP
C. 403(B) TSA
D. Keogh Plan-
What is C. 403(b)
In group life policies, the certificate of insurance is given to?
A. The policyholder to keep on file
B. Each Insured person
C. The group insurer
D. The insurance producer
What is B. Each insured person
In group policies, INDIVUAL certificates are given to each insured person
❁Master Contract=employer
❁Certificate=employee
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
A. 4 credits
B. 40 credits
C. 6 credits
D. 10 credits
What is C. 6 credits
▶Fully insured= 40 credits
▶Partially/Currently insured= 6 credits
An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
A. She can only convert her coverage without proof of insurability if she has a master policy
B. She will still be covered under the group plan, but will have to pay an individual policy premium
C. She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan
D. She must apply for a new policy which requires her to provide insurability
What is C. She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan
If a person has life insurance under a group plan and then leaves the person may convert group coverage to individual WITHIN 31 DAYS of leaving the plan w/o proof of insurability
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?
A. Non-admitted
B. Foreign
C. Domestic
D. Alien
What is B. Foreign
Domestic state to state (PA➜PA)
Foreign in another state (CA➜NY)
Alien in another country (US➜Canada)
All advertisements pertaining to life insurance policies are the responsibility of the...
A. Insurer
B. Agency that produces them
C. Consumer Protection Agency
D. Commissioner
What is A. Insurer
All sales material/ advertisements= responsibility of the insurer
How is a consultant different from an insurance producer?
A. A consultant does not need an insurance license
B. A consultant represents the insurer
C. A consultant does not get paid commissions
D. A consultant does not sell policies, but only offers advice
What is D. A consultant does not sell policies, but only offers advice
Insurance Agent- represents the insurance company insurer
Insurance Broker- represents the proposed insured or client
Insurance Consultant- A person for a fee/ cover offers advice
The company owes premium money to the insured. The insurer gave the funds to the producer to return to the insured. Within how many days must the producer pay the insured?
A. 5
B. 10
C. 30
D. 14
What is A. 5 days
5 days = For premiums to be remitted to the insurer
An applicant for a producers license has successfully completed all the steps to obtain their license. The soon-to-be producer does not want to wait until he receives his license in order to begin working. Which of the following is possible?
A. The person must apply for shortened preliminary period
B. The person can obtain a temporary work authority
C. The person must wait until license is issued
D. As long as the producer is appointed, he may begin working and the license will be issued with retroactive date
What is B. The person can obtain a temporary work authority
Expires no more than 60 days after it is issued
When a producer was reviewing a potential's customers coverage written by another company, the producer made several remarks that were maliciously critical of that other issuer. The producer could be guilty of...
A. Nothing unless the remarks were in writing
B. Defamation
C. Discrimination
D. Misrepresentation
What is B. Defamation
-statement that is false or maliciously critical of the financial condition of an insurer or a person
Which of the following is correct regarding credit life insurance?
A. It has a maximum of 20 years
B. It insures the life of the debtor
C. It insures the life of the creditor
D. It is purchased on an installment basis
What is B. It insures the life of the debtor
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
A. Local Insurer
B. Authorized Insurer
C. Self-Insurer
D. Certified Insurer
What is B. Authorized Insurer
authorizes an insurer to conduct business in the specified lines (authorized/admitted)
The Commissioner believes that a licensee has violated an insurance regulation and decides to conduct a hearing. How long must the Commissioner provide the licensee?
A. 14 days
B. 31 days
C. 20 days
D. 10 days
What is D. 10 days
Hearing = 10 days
When the owner of a $250k life insurance policy died & selected the Interest Settlement Option. If at the time of withdrawal the interest paid was $11,000, the beneficiary would be required to pay income tax on
A. $261k
B. None, because the beneficiary has not received the death benefit
C. $11k
D. $239k
What is C. $11k
The death benefit is not income taxable, any interest earned is income taxable
INTEREST= TAXABLE
Which type of misrepresentation persuades an insured, to cancel, lapse or switch policies from one to another?
A. Rebating
B. Twisting
C. False Advertising
D. Switching
What is B. Twisting
❃when an agent tries to persuade a client to change their policy=Twisting
❃ when an agent tries to get client to change policy for a commission=churning
Which of the following statements about a life insurance policy would be allowed in an insurance advertisement?
A. This is a term life insurance policy
B. This is a group term policy
C. This is a life insurance policy is also an investment plan
D. This is a retirement savings plan
What is A. This is a term life insurance policy
All advertisements must be truthful and not misleading. The policies must be identified as life insurance policies and cannot be referred to as an investment or savings plan
A group of 15 skydivers met at a seminar and began talking about life insurance during the break. Because it was so expensive to get individual life insurance, they decided to band together to form a small group so they could qualify for group life. After they applied for group life, they were rejected. Why?
A. Their profession is too high of a risk
B. The group has not been established long enough
C. There are not enough people in the group to qualify for group life
D. The purpose of the group was to purchase group life
What is D. The purpose of the group was to purchase group life
A group must be formed for a purpose other than attaining life insurance
Eligible Groups ➤Employers ➤Debtor groups ➤Labor Unions ➤Credit Unions/Alumni
If a producer dies or is rendered severely disabled, an unlicensed person can contract with another insurance producer to continue this persons insurance transactions for
A. 90 days
B. 365 days
C. 180 days
D. 100 days
What is C. 180 days
This agreement can last no longer than 180 days
Fred is the owner of a whole life insurance policy. Some of the details involving benefit payments are not expressed in the policy, but the insurer proposed an agreement 10 years ago. Fred has still not agreed to the terms of the proposal. When the policy matures what will the insurer do?
A. Hold Fred's money in its general fund until it can come to a formal agreement with Fred
B. Hold Fred's money in segregated fund until it can came to a formal agreement with Fred
C. Execute the terms of the proposed agreement, since Fred did not formally agree
D. Execute the terms of the proposed agreement, while charging Ferd a penalty of no more than 2.5% of the monthly payout until an agreement is established
What is A. Hold Fred's money in its general fund until it can come to a formal agreement with Fred
If the policyholder has not made an agreement and the policy matures the insurer can hold the proceeds of the policy. The insurer can hold the funds as part of its GENERAL fund.
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
A. An offer of employment
B. Dividends from a mutual insurer
C. An offer to share commission generated by the sale
D. Stocks, securities or bonds
What is B. Dividends from a mutual insurer
‣owned by policyholders
(participating)
‣ pay dividends to policyholders
‣ dividends NOT guaranteed