Life 4 Flashcards
All of the following are TRUE statements regarding the
accumulation at interest option EXCEPT
a) The interest is credited at a rate specified by the policy.
b) The policyholder has the right to withdraw the
accumulations at any time.
c) The interest is not taxable since it remains inside the
insurance policy.
d) The annual dividend is retained by the
company.
The interest credited under this option is TAXABLE,
whether or not the policyowner receives it.
The interest is not taxable since it remains inside the
insurance policy.
The interest credited under this option is TAXABLE,
whether or not the policyowner receives it.
The death protection component of Universal Life Insurance is always a) Decreasing Term b) Annually Renewable Term C) Whole Life d) Adjustable Life
Annually Renewable Term
A universal policy has two components: an insurance
component and a cash account. The insurance
component (or the death protection) of a universal life
policy is always annual renewable term insurance
What is the advantage of reinstating a policy instead of
applying for a new one?
a) The cash values have gained interest while the
policy was lapsed.
b) The original age is used for premium determination.
c) Proof of insurability is not required.
d) The face amount can be increased.
The original age is used for premium determination.
The reinstatement provision allows the policyowner an
opportunity to put a lapsed policy back in force, subject
to proving continued insurability. If the policyowner
elects to reinstate the policy, as opposed to purchasing
a new policy, the reinstated policy is restored to its
original status.
A Return of Premium term life policy is written as what type of term coverage? a) Increasing b) Decreasing c) Renewable d) Level
Increasing
Return of premium (ROP) life insurance is an increasing
term insurance policy that pays an additional death
benefit to the beneficiary equal to the amount of the
premiums paid.
The Federal Fair Credit Reporting Act a) Prevents money laundering b) Regulates consumer reports. C) Protects customer privacy. d) Regulates telemarketing.
Regulates consumer reports.
The Federal Fair Credit Reporting Act regulates
consumer reports,
also known
as
consumer
investigative reports, or credit reports.
What is the maximum penalty for habitual willful
noncompliance with the Fair Credit Reporting Act?
a)
Revocation of license
b) $2,500
c) $1,000
d) $100 per violation
2500
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.
All of the following are regulated areas of the insurance industry EXCEPT a) Commissions. b) Producers. c) Trade practices. d) Investments.
Commissions
Before each license renewal, an insurance producer
must complete at least how many hours of continuing
education?
a) 14
b) 20
c) 24
d) 30
24
A legally acceptable attempt by an existing insurer to
dissuade a current policyowner from the replacement
of existing life insurance is called
a) Solicitation.
b) Rebating.
c) Retention.
d) Conservation.
Conservation
Conservation means any attempt by the existing insurer
or its producers, or by a broker to dissuade a current
policyowner from the replacement of existing life
insurance or annuity.
Prior to requesting renewal of an insurance producer’s
license, how many hours of continuing education must a
producer complete?
a) 16 hours
b) 20 hours
c) 24 hours
d) 30 hours
24
Once licensed, producers must complete at least 24
hours of study in approved CE courses before every
license renewal. Failure to do so will result in automatic
termination of the license.
An insurer creates an advertisement in January of 2015
and keeps a record of its contents on file. Its next
regular examination will occur in December of 2018.
How long must the insurer keep its advertisements on
file?
a) January 2018
b) December 2018
c) January 2019
d) January 2020
January 2019
Records of insurance advertisements must be kept on
file for 4 years or until the insurer’s next regular
examination by the Department, whichever comes later.
If an insured requests forms that are necessary to
present a claim, within how many working days must
the insurer provide the forms?
a) 5
b) 10
c) 15
d) 20
15
Failing to provide forms necessary to present claims
within 15 working days of a request constitutes
improper claims practice.
Under what conditions must an insured sign a Notice
Regarding Replacement of Life Insurance or Annuity
form?
a) When replacing a life insurance policy that has
been in existence for over five years
b) When replacing a life insurance policy, under nearly all
circumstances
c) Only when replacing a policy with a different insurer
d) When replacing a policy with a different insurer that is
under different ownership than the current company
When replacing a policy with a different insurer that is
under different ownership than the current company
If an insured wants to replace his or her policy with
another policy provided by a different insurer, the
insured must sign a Notice Regarding Replacement of
Life Insurance or Annuity form, unless the new insurer is
under the same ownership as the old insurer. This
notice warns the applicant to get all the facts before
In the event an insurer is found guilty of committing
defamation, the insurer may be subject to the maximum
penalty of
a) $1,000.
b) $5,000.
c) $10,000.
d) $20,000.
10000
Any person or entity that violates the Insurance Code
provision on defamation may receive a penalty of at
least $200, but no more than $10,000.
If a person is working toward becoming permanently
licensed as a producer and is issued a temporary
license, what else must the person also do?
a) Pay a fee for each 30-day period of the license
b) Shadow a licensed producer
c) Take a training course
d) File weekly reports to the Director
Take a training course
