Comprehension Questions Flashcards
What is the process called for converting the group insurance plan to an individual plan?
The process of converting a group insurance plan to an individual plan is called a conversion plan
For how many months a person needs to remain disabled before getting Social Security disability benefits?
5 months
When renewable term life insurance policies can be renewed?
1. at predetermined date or age, regardless of ensured health.
2. Only if they insured provides evidence of insurability.
3. Typically with no change in premium.
4. anytime add policy owners request
- at predetermined date or age, regardless of ensured health.
What is level premium term life insurance policies?
Level premium term (LPT) life insurance is a type of term life insurance policy that has premiums that remain the same for the entire term of the policy
Apartment life insurance policy where the policy owners pays premiums for a specified number of years is called?
1. Limited to pay policy
2. Adjustable policy
3. Variable universal policLimited to pay policy
3. Level term policy
- Limited to pay policy
In what part of nations policy are policy benefits found?
1. Waivers
2. Conditions
3. Declarations
4. Entire contract
3. Declarations
what is the name of the provision which states that a copy of the application must be attached to the policy when issued?
1. Entire contract
2. Buyer’s guide
3. Entire policy
4. Policy summary
- Entire contract
An entity that acts as an insurance producer
1. As the same bond requirement as an individual producer
2. May offer something of value to induce an insurance transaction
3. Must be incorporated as an llc
4. Is not required to renew the license
- As the same bond requirement as an individual producer
The director of insurance is authorized to evaluate.
1. Established sales quotas
2. That insurance rates for foreign insurers
3. Pass state laws relating to insuranceRegulations
4. Make reasonable insurance rules and Regulations
4. Make reasonable insurance rules and Regulations
Q the producer gave his client a debate on the entitlement to purchase insurance.
1. Class B misdemeanor
2. Class A misdemeanor
3. Moral transcription
4. Felony
- Class B misdemeanor
what is insured consideration in insurance?
This is the premium or the future premiums that you have to pay to your insurance company.
In a viatical statement how much does the policy owner receive for a life insurance policy?
1. Amount greater than the Dealth benefit
2. Amount less than the death benefit
3. Amount is equal to a sum of all premium paid
4. Amount equal to does benefit
2. Amount less than the death benefit
In Illinois, Which of the following must be delivered to a policy owner upon the sale of a individual life insurance policy?
1. insurer’s AM best rating
2. The return sales proposal
3. Buyers guide only
4. Policy summary and buyers guide
4. Policy summary and buyers guide
What is the meaning of paying up the policy
A paid-up life insurance is a life insurance policy that is paid in full, remains in force, and you don’t have to pay any more premiums. It stays in-force until the insured’s death or if you terminate the policy.
It is acceptable to discriminate the amount of benefits for life and health policies between individuals of
1. Different religious faiths
2. Different classes
3. The same racial category
4. the same country of origin
2. DIfferent classes
It is fair to discriminate in the amount of benefits for life and health policies
T has an annuity that Guarantees an income stream for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years the remaining payments will be paid and his son for the balance of the 20 years what type of annuity is this?
1. Fixed certain
2. Joint and full survivor
3. life annuity with period certain
4. installment refund
life annuity with period certain
The company guarantees to make payments for a set number of years even if you die. If you die before the end of the period referred to as the “period certain,” the annuity will be paid to your beneficiary for the rest of that period. A typical period certain is usually 10 or 20 years.
Who negotiates viatical settlement between a policy owner and a viatical settlement provider?
1. Registered Beater
2. viatical settlement broker
3. Investment advisor
4. viatical settlement negotiator
2. Viatical settlement broker
Car producer knowingly misappropriated judiciary money in the amount of $150. Is his second offense. Will likely be charged with?
1. Class 4 felony
2. Class B misdemeanor
3. class 3 felony
4. class A misdemeanor
- Class 4 Felony.
If a insurance producer knowingly misappropriates or converts producer money in the amount of $150 or less he or she is guilty of Class A misdemeanor. Repeated occurrences of such actions are subsequently rated as class 4 felony
how soon can the benefit payments begin with a deferred annuity?
12 Months
Benefit payments from a deferred annuity can begin at least one year after the purchase date, meaning you typically need to wait a minimum of 12 months before receiving income from the annuity;
What kind of annuity will pay income to the surviving spouse and then to the children after the death of a spouse?
Temporary Annuity certain
which of the following is a reinstatement condition?
1. Change in the insuring clause
2. Proof of insurability
3. Premium Increase
4. Premium Decrease
proof of insurability
Which military service exclusion class would pay upon the death while the person is on leave
If a person dies while on military leave, generally, a “status” military service exclusion clause in an insurance policy would not pay out a benefit, as the mere fact of being in the military, even while on leave, would trigger the exclusion; however, a “results” clause would only apply if the death was directly related to military service, even if occurring during leave.
A life insurance policy that has premiums fully paid up within a stated time period is called?
Limited payment insurance
How does life insurance create an immediate estate?
1. That ensures a state received the death benefit
2. Nonforfeiture options are immediately available
3. Cash value may be borrowed upon at anytime
4. After first premium is paid, the phase amount may be available to the beneficiary
4. After first premium is paid, the face amount may be available to the beneficiary
With settlement options involved having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary?
1. Extended interest
2. Dividends only
3. Fixed period
4. Interest only
4. Interest only
The settlement option that allows proceeds to remain with the insurer and earnings to be paid to the beneficiary on the monthly basis is called interest only
life insurance policies will normally pay for losses arising from
Life insurance policies usually pay for losses arising from most causes of death, but there are some exclusions. These exclusions include:
suicide, illegal activities, substance abuse, misrepresentation, war, riot, and civil commotion.
It is generally true that life insurance policies cover losses arising from commercial aviation. This means that if an insured individual dies as a result of a commercial plane crash, the policy will typically pay out to the beneficiaries.
Which factor would an insured consider when determining whether to accept a group life plan
An insurer considering a group life plan primarily looks at the average age of the group, among other factors, to determine the risk and insurance premiums, whereas number of dependents, incontestable period, and grace period do not generally impact the acceptance of the plan.
A life in trans policy that is subject to a contract interest rate is Referred to as?
A life insurance policy that is subject to a contract interest rate is typically referred to as a Universal Life (UL) policy.
Explanation: Universal Life policies are designed to fluctuate with current interest rates, meaning the cash value within the policy grows based on a set contract interest rate, allowing for more flexibility in premium payments and potential for higher returns depending on market conditions.
Which type of life insurance policy pays the face amount at the end of the specified period if the insured insured is still alive?
A life insurance policy that pays the face amount at the end of a specified period if the insured is still alive is called an endowment life insurance policy.
Explanation: Unlike a term life insurance policy which only pays out if the insured dies within the policy term, an endowment policy will pay the death benefit to the policyholder if they are still living at the end of the policy term.
a non-contributory health insurance plan helps the insurer avoid
A non-contributory health insurance plan helps the insurer avoid adverse selection.
A non-contributory plan is one where the employee pays the entire cost of the plan. In contrast, a contributory plan is one where the employees share the cost.
To avoid adverse selection, insurance companies may also establish criteria for issuing group insurance plans, such as:
The group must be large
Most or all members of the group must participate
Insurance must be incidental to the group’s operation
Once a producers insurance License has been revoked the producer must wait for how many years
A person whose license is revoked or whose application is denied pursuant to this Section is ineligible to apply for any license for 3 years after the revocation or denial.
how do interest earnings accumulate in a deferred annuity?
On a tax deferred basis.
The distributions of interest (or earnings) are taxed as ordinary income but you won’t pay taxes on distributions of the premium or principal you initially deposited.
Are Annuities taxable or non taxable?
Annuities can be either qualified or nonqualified, depending on how they are funded and how they are taxed:
Qualified annuities
These are funded with pre-tax dollars, such as money from a 401(k) or IRA, and are subject to certain IRS guidelines. Qualified annuities are taxed as ordinary income, and you may need to make minimum withdrawals starting at age 73.
Nonqualified annuities
These are funded with after-tax dollars, such as money from an individual or joint account. Nonqualified annuities are partially tax-free, with the original contributions returned tax-free and any earnings taxed as ordinary income. There are generally no required minimum withdrawals for nonqualified annuities.
Which of the clause protects a policyowner from a misrepresentation caused by an innocent mistake?
An “incontestable clause” protects a policyowner from a misrepresentation caused by an innocent mistake.
Explanation: This clause states that after a certain period (usually two years), an insurance company cannot contest a policy based on a misrepresentation unless there was intentional fraud involved, even if the mistake was made innocently by the policyholder.
Which annuity payout option allowed the publicity owner to choose a predetermined number of benefit payouts?
The annuity payout option that allows the owner to choose a predetermined number of benefit payouts is called the “Fixed Period” or “Period Certain” option; this option lets you select a specific timeframe (like 10 or 20 years) to receive payments, regardless of when you pass away during that period.
What is an alternative to a life settlement?
Accelerated death benefit rider
what is a conditional insurance contract?
A conditional insurance contract is one that requires the fulfillment of specific conditions by the insured for the contract to be enforced. This distinguishes it from other types of contracts, which may not have such specific requirements.
A rollover from a traditional IRA to another IRA must be done within how many days to avoid tax consequences
60 days
