Life and Health 2

Question 1

If a consumer requests more information about an insurance producer’s compensation for a proposed insurance policy, the producer MUST disclose which of the following?

A. The producer’s role in the sale of the insurance contract.
B. The amount of compensation the producer will receive for selling the insurance contract.
C. Whether the producer will receive compensation from the insurer for selling the insurance contract
D. Whether the producer will receive compensation from a third party for selling the insurance contract

Answer 1

B

Question 2

As a form of level premium permanent insurance, ordinary life insurance accumulates as reserve that eventually

A. equals the face amount of the policy.
B. results in a dividend payment to the policyowner
C. ceases to earn interest or grow in a positive earnings direction.
D. requires, mandatory cash value distributions

Answer 2

A

Question 3

Which nonforfeiture option allows the policyowner to purchase less coverage for lite?

A. Reduced paid-up Insurance
B. Cash Surrender Value
C. Settlement Value.
D. Extended Term

Answer 3

A

Question 4

Which of the following C0RRECTLY identifies the favorable income tax treatment afforded to annuities?

A. Annual earnings are partially income tax deductible
B. Annual earnings are partially income tax excempt
C. Gains are taxed only on distribution.
D. The entire distribution is taxed at the owner’s rate of taxation.

Answer 4

C

Question 5

In which of the following dividend options would an insurer invest the policyowners money and add interest earnings to the initial amount of the dividends as such earnings accrue?

A. Accumulation at the interest Option
B. Paid- up Additions Option
C. Cash Dividend Option
D. Reduced Premium Dividend Option.

Answer 5

A

Question 6

All of the following statements apply to the surrender of an annuity contract EXCEPT

A. surrender charges will reduce the contract payout amount
B. the right to surrender is available on immediate annuities
C. the owner has the right to surrender on the contract during the accumulation period
D. surrender charges diminish over a stated number of years and will eventually disappear

Answer 6

B

Question 7

Which of the following provides a death benefit if the spouse of the insured dies?

A. Accelerated death benefit rider
B. Family Term insurance rider
C. Guaranteed insurability rider
D. Long-term care insurance rider

Answer 7

B

Question 8

Which of the following benefits will be paid to the business under a business overhead expense policy after the elimination period?

A. The amount needed to pay the mortage for the business property
B. The actual overhead expense incurred during the owner’s disability.
C. An amount equal to the overhead expense incurred in the month prior to the owner’s disability.
D. The minimum dollar value needed to keep the business running.

Answer 8

B

Question 9

Which of the following dividend options will increase the death benefit?

A. Guaranteed insurability
B. Accelerated endowment
C. Paid-up additions
D. Extended term

Answer 9

C

Question 10

The insurer relies on the truthfulness and integrity of the applicant when issuing a policy. This is a characteristic of

A. contract of adhesion
B. utmost good faith
C. subrogation
D. coinsurance

Answer 10

B

Question 11

An annuity product linked to a market-related rate of return is called

A. a fixed annuity
B. an indexed annuity.
C. a deferred annuity
D. a tax-sheltered annuity

Answer 11

B

Question 12

For a contract to be valid, it MUST be for a legal purpose and

A. involve consideration
B. be offered
C. involve warranties
D. be written

Answer 12

A

Question 13

All the following policies qualify for a 1035 Exchange EXCEPT

A. a whole life policy to another whole life policy
B. a whole life policy to an annuity
C. an annuity to another annuity
D. an annuity to a whole Iife policy

Answer 13

D

Question 14

A payor Benefit Rider would be found on which type of policy

A. A whole life policy
B. A juvenile life policy
C. An adjustable life policy
D. A joint and survivor policy

Answer 14

B.

Question 15

What is Life Settlement Contract?

A. A bona fide business succession planning arrangement
B. An assignment of a policy as collateral for a loan made by a licensed financial institution
C. The paying of predetermined surrender benefit by the insurer of the policy
D. An agreement to pay a policyowner less than the expected death benefit

Answer 15

D

Question 16

Which of the following is a characteristic of level premium term life insurance?

A. It provides for lower benefits.
B It can be used for cash value.
C. It matches the level amount of protection on the insured’s life expectancy.
D. The cost of insurance is average throughout the life of the contract.

Answer 16

D

Question 17

For a group to be acceptable for group health insurance underwriting, it should be

A. formed for the purpose of obtaining health insurance that is not individually underwritten.
B. formed for a purpose other than to obtain low-cost health insurance.
C. open to only healthy individuals with no preexisting conditions.
D. consist of individuals employed by the same employer

Answer 17

D

Question 18

Which statement is NOT a characteristic of a Group Life Insurance Plan?

A. master contract
B. Probationary periods.
C. Individual underwriting
D. Certificate of insurance

Answer 18

C

Question 19

What is the purpose of the policy review when an agent delivers a new life insurance policy to the insured?

A. to confirm that the insured understands all aspects of the policy
B. to give the agent a chance to sell another policy to the insured
C. to allow the insured to return the policy for a refund of the premium
D. to permit the parties to revise the policy provisions, terms and conditions

Answer 19

A

Question 20

If an insured under a life insurance policy dies with an outstanding loan balance, then the death benefit will

A. be reduced by the amount of the loan and interest owed.
B. is not paid until the loan is repaid.
C. be paid less the amount of the loan but not the interest.
D. be paid less the amount of the loan interest but no the principal

Answer 20

A

Question 21

Mortality is based on a large risk pool of

A. Income and time
B. People ad time
C. Geographic area and time
D. Family history and hobbies

Answer 21

B

Question 22

Which of the following is a characteristic of conversion from group to permanent life insurance?

A. Proof of insurability is required
B. Conversion must be to term insurance
C. Conversion must be applied for within thirty-one days of termination
D. Premiums for the new policy will be based on the age when first covered by the group policy

Answer 22

C

Question 23

An Insurer would consider which of the following in determining whether to accept a group life plan?

A. Grace period
B. Beneficiary
C. Average Age
D. Dependents

Answer 23

C

Question 24

An insured owns a whole life policy that has accumulated cash value. Which of the following statements is true about the Policy’s cash value

A. The policy’s cash value is view as investment growth and therefore subject to taxation for each calendar year
B. The growth of the policy’s cash value is not subject to income tax while the policy is in force
C. It is subject to fluctuations of the company’s overall performance
D. The cash value is not guaranteed

Answer 24

B

Question 25

With regard to Disability insurance, the waiting period is to

A. Exclude payments for a short-term illness
B. Determine severity of illness
C. Accurately calculate medical expense
D. Determine policyowner’s eligibly

Answer 25

B

Question 26

Term life insurance differs from permanent life insurance in that MOST often,
term life insurance

A. accumulates a much smaller cash value
B. has a longer premium payment period.
C. remain in force for a specific period of time
D. is automatically renewable at the end of the term period

Answer 26

C

Question 27

Which of the following is TRUE about agent’s life insurance sales advertisements in New York State?

A. It may not call attention to any unauthorized insurers.
B. It may call attention to the fact that the New York Life insurance Guaranty fund provides full coverage for the policy
C. It may not call attention to cash value policies.
D. It may call attention to a New York licensed insurer without indicating the full name of the insurer.

Answer 27

D