Exam Questions Flashcards
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
An individual who willfully violates this Act enough to constitute a general pattern or business practice will be subject to a penalty of up to $2,500.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
When the reduced option is written as “joint and 2/3 survivor,” the surviving beneficiary receives 2/3 of what was received when both beneficiaries were alive.
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy. The dividends are used to purchase a single premium policy in addition to the face amount of the permanent policy.
When an annuity is written, whose life expectancy is taken into account?
Annuitant
The annuitant receives payments from an annuity and is the person whose life expectancy is considered when writing the contract. The annuitant and annuity owner are often the same person but do not have to be.
The Washington Insurance Code regulation regarding policy replacement applies to which of the following types of transactions?
Immediate annuity contract
Credit life insurance, group contracts, and policies issued and replaced by the same insurer are exempt from replacement regulations.
An underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require?
Attending Physician Statement
The general powers and duties of the Insurance Department include all of the following EXCEPT
Enacting statutes to regulate the insurance industry.
The following are features of the Indexed Universal Life EXCEPT
Sale of this product requires a securities license.
Which of the following would provide an underwriter with information concerning an applicant’s health history?
The Medical Information Bureau
An Adjustable Life policyowner can change which of the following policy features?
The coverage period
Typically, the owner of an adjustable life policy has the following privileges; increasing or decreasing the premium; changing the premium-paying period; increasing or decreasing the face amount of coverage; or changing the period of protection.
What is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection.
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to
10 years
When would a 20-pay whole life policy endow?
When the insured reaches age 100
According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following?
Guaranteed surrender value
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die.
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life – Option A. Universal Life Option A (Level Death Benefit option) policy must maintain a specified “corridor” or gap between the cash value and the death benefit, as required by the IRS. If this corridor is not maintained, the policy is no longer defined as life insurance for tax purposes, and consequently loses most of the tax advantages that have been associated with life insurance.
An insurer receives a report regarding a potential insured that includes the insured’s financial status, hobbies and habits. What type of a report is that?
Inspection Report. Inspection reports cover moral and financial information regarding a potential insured, usually supplied by private investigators and credit agencies. Companies that use inspection reports are subject to the rules outlined in the Fair Credit Reporting Act.
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner.
