Missed Questions

Question 1

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed
an income for life. Which settlement option should this policvowner select?
a Life income
Joint and Survivor
c Fixed-amount installments
Fixed-period installments

Answer 1

Joint and Survivor

Under the Joint and Survivor settlement option. Dayments will continue until the death of the last beneficiary.

Question 2

Phonemic Chart....
6
life insurance life
#4. Considering the principles of liquidity, how would the policyowner use today's cash values in a life insurance policy?
a Make a down payment on a home in 5 years
b) Fund a retirement
c) Use it for emergency expenses
Secure a car loan next year

Answer 2

Use it for emergency expenses

Liquidity in life insurance refers to availability of cash to the insured. Some life insurance policies offer cash values that can be borrowed at any time and used for
immediate needs

Question 3

5.

Agents may be found guilty of defamation if they make false statements that are intended to
Misinform prospective clients about policy coverage
Misrepresent the benefits payable under policies
Maliciously criticize another insurance company
Deceive a policvnolder.

Answer 3

Maliciously criticize another insurance company

Maliciously critical statements about another person or company are considered defamation and are illegal.

Question 4

6.

Which of
The
following statements is true regarding SIMPLE plans?
The emplovee cannot contribute to the plan
Contributions and earnings are tax-deferred until funds are withdrawn.
The employer cannot contribute to the plan
d) The emplover ca’ contribute up to 5% of the employee’s annual compensation

Answer 4

Contributions and earnings are tax-deferred until funds are withdrawn.

Under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer can then contribute up to an amount equal to 3% of the
employees’ annual compensation. Contributions and earnings are both tax-deferred until funds are withdrawn

Question 5

All of the following are true of a nonqualified deferred compensation plan EXCEPT
It is a contractual agreement whereby the employee agrees to defer receipt of a portion of his compensation until retirement, disability, or death
b It does not require IRS approval.
© It can be discretionary.
Contributions are tax deductible,

Answer 5

Contributions are tax deductible,
Nonqualified deferred compensation plans may be discretionary and therefore do not require IRS approval. These plans are contractual agreements between
employees and employers for the deferral of constructive receipt of a portion of their earnings are not tax deductible.

Question 6

14.

Which of the
following statements
Is true regarding adl
vertising that the Insurance Guaranty Association would ensure payment of benefits in the event of insurer
inso vencv!
All advertisements of an insurer must mention coverage by the Association.
It is an unfair trade practice to mention the Association in advertisements.
Insurers may choose whether to mention the Association in advertisements, but if they choose to do so, they must first pay a fee to the Department of Insurance.
d Ifinsureds join the Association, they will be protected financially if their insurers become insolvent.

Answer 6

It is an unfair trade practice to mention the Association in advertisements.

It is an unfair trade practice to make any statement that an insurers policies are guaranteed by the existence of the Insurance Guaranty Association

Question 7

16.

Which of the following statements concerning the Medical Information Bureau is correct?
a Information contained in the Medical Information Bureau report is available to all physicians.
The Medical Information Bureau assists underwriters in evaluating and classifying risks.
c) The Medical Information Bureau report must be attached to each life insurance policy issued.
d) All applicants for life insurance receive a copy of the findings of the life insurance medical examination.

Answer 7

The Medical Information Bureau assists underwriters in evaluating and classifying risks.

The Medical Information Bureau is a source of underwriting information that specifically focuses on the applicant’s medical history. The Bureau is supported by member
insurance comednies

Question 8

#21
All of the rollowing are considerations under the needs approach planning for life insurance EXCEPT
Insured's income.
Emergency reseNe funds
C)
Deot cancellation.
d Education fund

Answer 8

Insured’s income.

The needs approach considers the needs which would exist in the event of the wage earner’s death by looking at the family’s income-expenditure equation. Some of the
factors considered by the needs approach are the amount of debt (including mortgage), paying for unexpected expenses (emergency reserve fund), and paying for
children’s education. Human life value approach takes into consideration the insured’s wages, inflation, the number of years to retirement, and the time value of money.

Question 9

As an insurer’s field underwriter, a producer has all of the following responsibilities EXCEPT
Soliciting insurance contracts.
b Collecting premiums.
Issuing policies on behalf of the insurer.
Completing applications.

Answer 9

Issuing policies on behalf of the insurer.

Producers do not have the authority to approve and issue contracts. All the other answer choices are functions of a field underwriter.

Question 10

27.

Robert wants to insure his 4-year-old son, Tyson. Robert currently has a policy on his own life for $400,000. He is getting ready to lower that amount to $100,000 next
year. What is the maximum amount that he can purchase on Tvson?
a) $100,000
$400,000
c) $25,000
d) $10,000

Answer 10

100,000

Robert can purchase the greater of 25% (since Tyson is under 4½) of the policy on his own life, or $50,000. Even if he drops the amount of coverage on his own life at a
later date, as long as he does not purchase more than 25% while he still has the coverage, Ison’s policy will remain the same

Question 11

31. According to the life insurance replacement regulations, which of the following would be an example of policy replacement?

a Aterm policv exoires, and the insured bus another term life policy
Term insurance is changed to a Whole Life policy
A lapsed poliev is reinstated within a speccumerame

A policy is reissued within a specific timeframe

Answer 11

A policy is reissued within a specific timeframe

Replacement refers to any transaction in which new
life insurance or an annuitv is purchased. resulting in reduced paid-up insurance. continuation or extended term
insurance or otherwise reduced in value ov the use of nontorteiture benefits or other dolicv values

Question 12

Annuities Certain limit the amount paid by the annuity to a certain fixed
Amount oniv.
b Period with a certaln fixed amount
c) Period or fixed amount.
d Period onlv

Answer 12

Period or fixed amount.

Annuities Certain limit the amount paid by the annuity to a certain fixed period or until a certain fixed amount is liquidated.

Question 13

35.

What is the cost of coverage based on for group life insurance?
a) The average age
b) The ratio of men to women
c) The insureds individual ages
The average age and the ratio of men to women

Answer 13

The average age and the ratio of men to women
One of the aspects of group underwriting that differs from individual insurance is that the cost of the coverage is based on the average age of the group and ratio of men
to women

Question 14

#36.
The Superintendent of Financial Services in the state of New York is appointed by the
State Assemblv.
State Department of Financial Services.
reope.
Governor

Answer 14

Governor

The Superintendent is appointed by the Governor and continues in office until the end of the Governor’s term

Question 15

38.

If an applicant submits the initial premium with an application, which action constitutes acceptance?
The underwriters approve the application
The applicant submits a statement of good health
The producel
delivers the policy.
The insurance company receives the application and initial premium.

Answer 15

The underwriters approve the application

Acceptance takes place when an insurers underwriter approves the application and issues a policv.

Question 16

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
life
Rebaling
Unfair claim practice.
Misrepresentation
concealment

Answer 16

Misrepresenting

Issuing or circulating any sales material that is false or misleading would be considered misrepresentation and is illegal.

Question 17

45. Because of the imposed blackout period, the surviving spouse will not receive social security benefits until

He or she qualifies for retirement benefits.
The age of 65.
c) He or she becomes fullv insured.
The age of 59 1/2.

Answer 17

He or she qualifies for retirement benefits.

Blackout period begins when the youngest child reaches the age of 16, and ends when the surviving spouse qualifies for retirement benefits, as early as age 60.

Question 18

49. Restoring an insured financially after a claim is known as

Reasonable expectations.
Indemnity.
honesio
hectoration
Under indemnity. an insured or a beneficiary is permitted to collect only to the extent of the financialloss.

Answer 18

Indemnity

Under indemnity. an insured or a beneficiary is permitted to collect only to the extent of the financialloss.

Question 19

Which of the following would NOT trigger the payment of Accelerated Death Benefits?
Terminal ilness
D Requiring an organ transplant for the insured to survive
© Being permanentlv Institutionalized
d) Being permanently disabled

Answer 19

d) Being permanently disabled
Accelerated death benefits or living riders allow the early payment of some portion of the death benefit if the insured has conditions such as terminal Illness, permanent
institutionalization, or a lite-threatening medical condition that requires a dramatic medical intervention. Accelerated dean Denett, nowever, does not cover disadility

Question 20

An individual has a $200,000 convertible term life insurance policy. If he chooses, he can
a) Convert to another term policy with a lower face amount without proof of insurability.
b) Purchase an individual annuity for any face amount using the 1035 exchange privilege.
c Purchase another term policy and increase his death benefit without proof of insurability.
Convert to a whole life policy for the same face amount without proof of insurability.

Answer 20

Convert to a whole life policy for the same face amount without proof of insurability.
Conversion allows a term policy to be changed into a cash value policy (often whole life). While the premium will increase for the same amount of death benefit, no
#60.
evidence of insurability is required.

Question 21

#60.
evidence of insurability is required.
A life producer applying for a life settlement broker license may be exempt from the prelicensing education and examination requirement if the producer has held an
active life license for at least how manv vears?
1 year
2 years
3 vears
5 years

Answer 21

1 year

If a life producer has maintained an active license for one year, the prelicensing class and exam, as well as fingerprinting, may be waived when applying for a life
settlement broker license

Question 22

#62.
A distribution from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvested in an IRA within
90 davs
h 100 cavs
30 davs
1) 60 davs

Answer 22

1) 60 davs
To be eligible for a tax-free rollover, the distribution must be reinvested in an IRA within 60 days following the distribution and the plan participant must not take actual
physical receipt or he distribution. Unless the entire amount is rolled over, the part retained will be taxed as ordinary income.

Question 23

64. Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant’s needs?

Applicants wno may require a larger death benefit in the future should buy convertible term insurance
b Applicants concerned with the increasing cost of living should purchase increasing term
Applicants wishing to pay off a mortgage should they sutfer a premature death might buy a decreasing term plan
Employers looking to provide cost effective group life insurance for their employees may choose annual renewable term

Answer 23

Convertible term converts to a cash value policy with the same death benefit but at a higher premium

Question 24

Which of the following is true regarding pure life annuity settlement option?
a) It guarantees that all the proceeds will be paid out.
h
The beneficiary will receive a refund of the principal.
c It guarantees income for a specified period of time.
It provides the highest monthly benefit.

Answer 24

It provides the highest monthly benefit.
The pure life annuity pays the most since it only guarantees to pay for the rest of one’s life without a minimum guarantee.

Question 25

#72.
What guarantees that the information explained in the insurance contract is true?
a Abinger
bA warranty
A represe
intation
Utmost good faith

Answer 25

Warranty

#72.
What guarantees that the information explained in the insurance contract is true?
a Abinger
bA warranty
A represe
intation
Utmost good faith

Question 26

74 Al of the tollowing are

true about key-person insurance EXCEPT
The death benefit is taxable to the business.
The hussinees is the adolcant and owner.
The employee must give written consent by signing the application.
• The business is the beneficiary.

Answer 26

The death benefit is taxable to the business.

Key person life insurance premium is not deductible by the business and the death benefit is not taxable to the business

Question 27

$85.
All of the following are true of the Survivorship Life policy EXCEPT
a
The death benefifys not pald until the last death.
b The premium would be lower than in a joint life policy.
C It can insure more than 2 lives
The premium is based on the age of each insured.

Answer 27

The premium is based on the age of each insured.
Survivorship Life (or "second-to-die" policy) is much the same as joint life in that it insures two or more lives for a premium that is based on a joint age

Question 28

89. Before an adjuster license may be issued, an applicant must file a surety bond with the Superintendent in the amount of

a) $500
b) $1,000
c) $5,000
d) $10,000

Answer 28

1,000

All adjusters must file a surety bond of $1,000 with the Superintendent before a license may be issued or renewed.

Question 29

=94.
Which dividend option will increase the death benefit?
Reduced Dad Up
Paid-up additions
Accumulation
Extended term

Answer 29

Paid-up additions

Paid-up additions option uses the dividend to purchase small amounts of the same type of insurance as the original policy. The additional insurance is paid up by the
divideno.

Question 30

97.

What happens to the face amount of a
whole life policy if the insured reaches the age of 100?
a The cash value and the face amount are paid to the insured.
The face amount is paid to the insured.
c Its paid to the insured’s estate and the policv is terminated
• It is paid to the beneficiary in full

Answer 30

The face amount is paid to the insured.

Whole life insurance provides protection for the entire lifetime of the insured. If the insured lives to the age of 100, the company pays the face amount of the policy to
the policyowner (usually the insured)

Question 31

Under what circur/stances will the contingent beneficiary receive the death benefit?
a If the tertiary beneficiary dies before the insured
b If designated by the insured
If designated by the primary beneticiary
If the primary beneficiary dies before the insured

Answer 31

If the primary beneficiary dies before the insured
The only way the contingent beneficiary will receive the death benefit is if the primary beneficiary dies before the insured

Question 32

What happens to the face amount of a whole life policy if the insured reaches the age of 100?
The cash value and the face amount are paid to the insured
b) The face amount is paid to the insured.
c It is paid to the insured’s estate and the policy is terminated
d It is paid to the beneficiary in full.

Answer 32

The face amount is paid to the insured.

Whole life insurance provides protection for the entire lifetime of the insured. If the insured lives to the age of 100, the company pays the face amount of the policy to
the policyowner (usually the insured).

Question 33

Under what circumstances will the contingent beneficiary receive the death benefit?
If the tortiarv heneficiarv dies before the
insured
b If designated ov the insured
c) Ifdesienated oy th rimry beneciary
If the primary beneficiary dies before the insured

Answer 33

If the primary beneficiary dies before the insured
The onlv wav the contingent beneticiary will receive the death benefit Is It the primarv beneficiarv dies before the insured.

Question 34

100. All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT

a Insurers are not required to give customers a copy of the report.
b) It applies to credit eports ordered in connection with insurance, banking and employment
c) The customer must be notified if adverse action is taken as a result of a report.
d Reports may be sent to anyone who requests one.

Answer 34

Reports may be sent to anyone who requests one.
Credit reports may only be ordered by those involved in insurance underwriting, bank loans or employment, so they cannot be ordered by just anyone. If adverse action
is taken, an insurer must tell the insured which credit reporting agency furnished the report, but the insurer does not have to furnish a copy of it. If a report is wrong,
there are procedures to get it corrected without the need of filing a lawsuit (litigation).

Question 35

The insurance component of a Universal Life policy is what type of insurance?

a) Convertible Term
b) Modified Whole Life
c) Annual Renewable Term
d) Flexible Premium Adjustable Life

Answer 35

Annual Renewable Term

A Universal Life policy is constructed by combining an Annual Renewable Term (ART) policy with a cash value account. However, they are unbundled components.

Question 36

31. Which of the following is NOT true regarding the policy summary?

a) The policy summary must be a separate document.
b) The insurer must provide a policy summary.
c) The policy summary may be part of the policy.
d) The policy summary must be provided upon policy delivery.

Answer 36

The policy summary may be part of the policy.

The insurer must provide a policy summary. The policy summary must be a separate document. Failure of an insurer to provide or deliver a buyer’s guide or a policy
summary constitutes an omission which misrepresents the benefits, advantages, conditions or terms of an insurance policy.

Question 37

An agent accepts the premium payment 35 days after it is due, telling the insured that the policy will continue to remain in force. This is an example of what type of agent
authority?
a) Apparent
b)
Express
c) Fiduciary
d) Implied

Answer 37

Apparent

Apparent authority is the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal
created.

Question 38

36. A policyowner is able to change the beneficiary on a life insurance policy only if the beneficiary designation is

a) Irrevocable.
b) Revocable.
c) Primary.
d) Contingent.

Answer 38

Revocable

The policyowner may change a revocable designation at any time without the consent or knowledge of the beneficiary. An irrevocable designation may not be changed
without the written consent of the beneficiary.

Question 39

40. When assessing needs for life insurance, an individual may use retention, which means

a) Raising capital.
b) Purchasing life insurance.
c) Maintaining assets at death.
d) Keeping a life insurance policy until death.

Answer 39

Maintaining assets at death.

One must determine whether to allow liquidation or retention of assets at death when determining how much insurance is needed. Selling assets, or liquidation, is a
method of raising capital. Retention is the retaining of assets.

Question 40

Which of the following is INCORRECT regarding whole life insurance?
(Choose from the following options)
O1. Cash value exceeding the premiums paid is taxable.
© 2. Premiums are not tax deductible.
© 3. Dividend interest is taxable.
• 4. Policy loans are tax deductible.

Answer 40

4. Policy loans are tax deductible.

Question 41

29. An insured has a policy in which the death benefit remains level while the premium increases,
    land is renewable without proof of insurability. What kind of policy is this?
    (Choose from the following options)
    O1. Guaranteed death benefit
    @ 2. Annually renewable term
30. Increasing term insurance
    O 4. Decreasing term insurance

Answer 41

Annually renewable term

Question 42

13. In whole life insurance, which of the following terms describes features such as cash values and
loan provisions?
(Choose from the following options)
O1. Nonforfeiture options
O2. Dividend options
O 3. Accelerated death benefits
© 4. Living benefits

Answer 42

Living benefits

Question 43

Which of the following is true regarding commission sharing by insurance agents?
(Choose from the following options)
O1. An agent can share commissions with any person who helped solicit or negotiate the
insurance contract.
O2. An agent can never share a commission with another agent.
© 3. Commissions can only be shared with a person authorized and licensed in the same line of
authority.
O 4. Commissions can only be shared among agents appointed by the same insurer.

Answer 43

© 3. Commissions can only be shared with a person authorized and licensed in the same line of
authority.

Question 44

All of the following characteristics of a group are considered in group underwriting EXCEPT
(Choose from the following options)
01. Turnover rate.
O 2. Purpose of the group.
© 3. Medical conditions.
O 4. Financial strength

Answer 44

© 3. Medical conditions.

Question 45

42. The Medical Information Bureau (MIB) helps insurers compare medical information they have
    collected on a potential insured with the information received from
    (Choose from the following options)
    O1. Insureds.
    © 2. Other member insurers.
    O 3. Participating doctors.
    O 4. Hospitals.

Answer 45

Other member insurers.

Question 46

Which of the following are the features of a variable life insurance policy?
(Choose from the following options)
O1. Flexible premium, no guarantees, general account
(R 2. Fixed premium, guaranteed minimum death benefit, separate accounts
O 3. Flexible premium, no cash values, separate accounts
O 4. Guaranteed minimum death benefit and guaranteed minimum cash value

Answer 46

2. Fixed premium, guaranteed minimum death benefit, separate accounts

Question 47

While completing a life insurance application the applicant realizes that she should have answered an earlier question differently. What should the agent do to make the
necessary change?
White-out the information, make the change, and have the applicant initial the change
b) Cross out the incorrect information and provide an explanation to the insurance company
c) Nothing, only a company officer can make any changes
d) Cross out the incorrect information, write in the correct answer, and have the applicant initial the change

Answer 47

d) Cross out the incorrect information, write in the correct answer, and have the applicant initial the change
If a change is necessary in an application, the agent can have the applicant complete a new application. Some insurers will allow the mistake to be corrected on the
application with the applicant’s accompanying initialization of the change. Using the agent’s initials will not be accepted.

Question 48

5
A
#14.
Whenever the Superintendent has reason to believe that a person has violated or is about to violate any unfair method of competition or an unfair claim practice, he or
she may serve a statement of the charges and a notice of a hearing. What is the timeframe for the hearing after the notice is served?
10 days
b) 30 days
45 days
d) 60 days

Answer 48

10 days

The hearing must be held at least 10 days after notice is served. At the hearing, a person has the opportunity to appear in person and by counsel, give evidence why an
order should not be made, inspect all documentary evidence and witnesses, and obtain witnesses on the person’s behalf.

Question 49

#15. When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?
a) Reduce the premium
n rixed amount
c) Reduced paid up
d) Paid-up additions

Answer 49

d) Paid-up additions
The paid-up addition dividend option is used to purchase more paid-up insurance each year, thereby increasing the death benefit.

Question 50

#16.
A married couple purchase a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either one of them were unable to
continue making the premium payments due to death or disability. Which policy rider should their agent recommend?
a) Payor benefit
b)
Guaranteed insurabllitv
c automatic premium loan
d) Waiver of premium

Answer 50

a) Payor benefit

Pavor rider provides protection to the insured minors. If the life insurance is for a child and the parent paying the premium dies or becomes disabled, the insurance
company will waive the premium until the child reaches a predetermined age, such as 18 or 21.

Question 51

#18.
Under which of the following conditions would life insurance proceeds be taxable by the federal government?
a) If paid to the policyowner
b If there is a transfer for value
If collaterallv assigned to a lender
If taken as a lump sum

Answer 51

b If there is a transfer for value

If life insurance proceeds are collected in a lump-sum payment, they are generally not subject to federal taxation. If the benefit payment results in a transfer for value (if
the policy is sold to another person, it mav not be exempt from taxation. Transfer for value rules do not apply when a policy is collaterally assigned to a lender.

Question 52

#19.
Which of the following would be considered a peril?
Driving too fast for conditions
b) Playing golf in a thunderstorm
c) Fire
d) Smoking

Answer 52

Fire

Fire is a peril (a cause of loss). Hazards increase the chance a peril could occur.

Question 53

#24.
What type of an interest rate is guaranteed in universal life policies?
Current interest rate
b)
Contract interest rate
Nominal interest rate
d) Adjustable interest rate

Answer 53

Contract Interest rate

The insurer guarantees a contract interest rate. A current interest rate is not guaranteed in the contract and may be higher because of current market conditions.

Question 54

S set up an individual retirement account that her employer is now contributing to. Her employer's contributions are not included in her gross income. What kind of
retremenan desnave?
a
401(k)
b) HR-10 (Keogh)
c) SIMPLE
Simplified Employee Pension (SEP)

Answer 54

Simplified Employee Pension (SEP)
A SEP is a type of qualified plan suited for the small employer. In a SEP, an employee establishes and maintains an individual retirement account to which the employer
contributes. Emplover contributions are not included in the employee’s gross income

Question 55

34.

What is the exclusion ratio used to determine?
a) The premium amounts to be included in taxes
b The interest base and the payout base.
© The benefit amounts to be pald to the annuitant
d) The annuity benefit to be excluded from taxes.

Answer 55

The annuity benefit to be excluded from taxes.

The exclusion ratio is used to determine the annuitv amounts to be excluded from taxes

Question 56

#43.
What does the Guaranty Association guard against!
a) Insurance fraud
b) Double indemnity
c) Rebating
d) Insurer insolvency

Answer 56

d) Insurer insolvency
All admitted insurers must be a member of the Insurance Guaranty Association as a condition of their license. The Insurance Guaranty Association is in existence to
protect policyowners and beneficiaries against losses caused by the insolvency of an insurance companv.

Question 57

#48.
Which of the following toes of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?
a) Interest-based life
b) Universal life
c) Credit life
d) Variable whole life

Answer 57

d) Variable whole life
Variable Life insurance is a level fixed premium investment-based product. It is a combination of decreasing term insurance and an investment fund.

Question 58

Which of the following is NOT true regarding insurance consultants?
a
IT hev mav own shares in the insurers they represent
Thev offer insurance advice to the public for a fee
c Thev are required to pass a written examination.
d The superintendent must recognize the candidate as trustworthv and competent before issuing a consultant’s license

Answer 58

They may own shares in the insurers they represent

Insurance consultants offer advice to the public about the benefits, advantages and disadvantages of insurance policies for a fee. The Superintendent may issue an
insurance consultant’s license to any person or firm that has submitted a written application, paid the fees, and passed a written examination. A consultant, however,
must not be an executive or an employee of or own any shares in the insurer that he or she represents.

Question 59

51. All of the following are true about Group Life insurance EXCEPT

The employee is the insured.
b) The employer is the beneficiary.
c) It is usually written as annual renewable term insurance.
d) Evidence of insurability is usually not required.

Answer 59

b) The employer is the beneficiary.

The employee, as the insured, may designate any beneficiary they so desire, which would usually be either their spouse or children.

Question 60

52.

Which statement best describes agreement as it relates to insurance contracts!
a Each party must offer something of value
b) One party accepts the exact terms of the other party’s offer.
c) The intent of the contract must be legally acceptable to both parties.
All parties must be capable of entering into a contract.

Answer 60

One party accepts the exact terms of the other party’s offer.

In insurance contracts, there must be a definite offer by one party, and this offer must be accepted in its exact terms by the other party. Agreement includes both an offer
and its acceptance.

Question 61

#56.
If a loan request is for pavment of due premiums on the policy. how soon must the insurer issue a loan?
a) Immediatelv
b) Within 10 days
c) Within 30 days
d) Within 90 days

Answer 61

Immediately

Loan requests for payment of due premiums must be fulfilled immediately. Requests for any other reason may be deferred up to 6 months.

Question 62

Which of the following statements is true regarding SIMPLE plans?
Contributions and earnings are tax-deferred until funds are withdrawn.
The emplover cannot contribute to the plan
The emplover can contribute up to 5% of the employee’s annual compensation.
The employee cannot contribute to the plan

Answer 62

Contributions and earnings are tax-deferred until funds are withdrawn.

Under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer can then contribute up to an amount equal to 3% of the
employees annual compensation. Contributions and earnings are both tax-deferred until funds are withdrawn

Question 63

60.

Which of the following is TRUE of level term insurance?
The premium will increase or decrease based on current interest rates.
b The policy endows at age 100.
The policy offers nonforfeiture values
a Itis temporary protection.

Answer 63

a Itis temporary protection.
Level term insurance is temporary protection. It is likely renewable at certain interval (5 year, 10 year etc.) The policy has a maximum renewal age (possibly 80).

Question 64

64

What effect will the long-term care (LTC) rider have on the death benefit of a life insurance policy if TC benefits were paid to the insured?
Not affect the amount payable to the benefician
h) Eliminate the death benett
c) Reduce the death benefit
d) Increase the death benefit by the amount paid into LTC

Answer 64

c) Reduce the death benefit

As with the living needs rider, payment of LTC benefits will reduce the amount payable to the beneficiary upon the insured’s death.

Question 65

58.

4 MarchingOrder
Sign in to your ac..
Phonemic Chart:
C life insurance lite
Which of the following statements is true regarding SIMPLE plans?
Contributions and earnings are tax-deferred until funds are withdrawn
The employer cannot contribute to the plan
The employer can contribute up to 5% of the employee’s annual compensation.
d) The employee cannot contribute to the plan.

Answer 65

Contributions and earnings are tax-deferred until funds are withdrawn

Under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer can then contribute up to an amount equal to 3% of the
employees’ annual compensation. Contributions and earnings are both tax-deferred until funds are withdrawn.

Question 66

70.

Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant’s needs?
a
Applicants wishing to pay off a mortgage should they suffer a premature death might buy a decreasing term plan.
b) Employers looking to provide cost effective group life insurance for their employees may choose annual renewable term
c) Applicants who may require a larger death benefit in the future should buy convertible term insurance.
d) Applicants concerned with the increasing cost of living should purchase increasing term.
Convertible term converts to a cash value policy with the same death benefit but at

Answer 66

Applicants who may require a larger death benefit in the future should buy convertible term insurance.

Convertible term converts to a cash value policy with the same death benefit but at a higher premium.

Question 67

790

If a life insurance company uses HIV testing as a part of its underwriting, when must an
applicant be notified of the procedure?
a) Prior to ordering a physical examination
b) Prior to solicitation of the policw
c) Prior notice is not required
d) Prior to performance of the test

Answer 67

d) Prior to performance of the test
Prior to testing, the insurer must disclose in writing its intent to test the applicant for the Human Immunodeficiency Virus infection or for a specific health condition
derived from HIV. The insurer must obtain the applicant’s written informed consent to administer the test.

Question 68

#85.
Who does the spendthrift clause in a life insurance policy protect?
a
The insured
b) The policyowner
c) The creditors
d) The beneficiary

Answer 68

d) The beneficiary
The spendthrift clause states that the death benefit paid to the named beneficiary is protected from the creditors of the insured or the beneficiary.

Question 69

88.

All of the following are true of credit life EXCEPT
The creditor is the policyowner.
b) The insured names the beneficiary.
c The death benefit cannot exceed the amount of the loan.
d) The premium payment is included in the loan payment.

Answer 69

The insured names the beneficiary.

With Credit Life the lending institution is the owner and names the beneficiary.

Question 70

90. Which of the following is required to provide a notice of information practices to applicants and policyholders?

a) The Department of Insurance
b) The NAIC
c) The underwriter
d) The producer

Answer 70

The producer
Insurers and producers must provide a notice of information practices to applicants and policyholders in connection with insurance transactions.

Question 71

It a person, firm, association or corporation conducts insurance business in New York without a certificate of authority the penalty for the first violation is

a) $2,500.
b) $2,000.
c) $500.
d) $1,000.

Answer 71

d) $1,000.
First-time violation of conducting insurance business without a certificate of authority is $1,000; subsequent violations are $2,500 each.

Question 72

98.

All of the following are true of the Survivorship Life policy EXCEPT
The death benefit is not paid until the last death.
b) The premium would be lower than in a joint life policy.
c It can insure more than 2 lives.
d) The premium is based on the age of each insured.

Answer 72

d) The premium is based on the age of each insured.
Survivorship Life (or "second-to-die" policy) is much the same as joint life in that it insures two or more lives for a premium that is based on a joint age.