Simulate Questions Flashcards
In order for
a nonresident licensee to become
a resident producer in New York. thelicensee must
a) Apply within 90 days of becoming a resident.
Wait b months and close out all existing business.
c) Fulfil New Yorks prelicensine requirements
Pass a written exam
Apply within 90 days of becoming a resident.
If a licensed individual becomes a resident of New York. he or she must apply for a license within 90 days of becoming a legal resident, but does not have to fulfill
prelicensing or examination requirements for lines of authority held in the previous state, unless the Superintendent determines otherwise
Which statement regarding insurable risks is NOT correct?
a An insurable risk must involve a loss that is definite as to cause, time, place and amount.
b) Insureds cannot be randomly selected.
© Insurance cannot be mandator
The insurable risk needs to be statistically predictable.
b) Insureds cannot be randomly selected.
Granting insurance must not be.mandatory, selecting insureds randomly will help the insurer to have a fair proportion of good risks to poor risks. All other statements are
true
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident, and it is discovered that he is
actually 45 years old, and not 43, as stated on the application. What will the company do?
Pay a reduced death benefit
b)Pav the ful death benefit
Pay nothing: there was a misrepresentation on the application
a Pavthe fu death benefit and rerund excess premium
Pay a reduced death benefit
The incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years. However, it does not
apply to statements relating to age, sex and identitv.
In order to be a licensed life settlement broker, a person must complete which of the following requirements?
a Post a suretv bond
DA
Submitto a drug test
Submit fingerprints
Have been a licensed life producer for at least 6 months
Submit fingerprints
Fingerprinting is required and will be used for a criminal history record check so the Superintendent may assess the character and trustworthiness of the applicant prior
tolIcensing
All of the following are duties and responsibilities of producers at the time of application EXCEPT
Explain the nature and type of any receipt the producer is giving to the applicant.
b Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information.
c) Check to make sure that there are no unanswered questions on the application.
Change any incorrect stal
tement on the application o personallv initialing next to the corrected statement.
Change any incorrect stal
tement on the application o personallv initialing next to the corrected statement.
Any changes to information on an application must be initialed by the applicant
#20. Which of the following riders would NOT cause the Death Benefit to increase? a Accidental Death Rider b) Pavor Benefit Rider Guaranteed Insurability Rider Cost of Living Rider
Pavor Benefit Rider
Payor Benefit Rider does not increase the Death Benefit: it only das the premium if the pavor is disabled or dies. With Guaranteed Insurability Rider, the policyowner can
increase Db at specified ages or events, i.e. marriage or birth of a child; Cost of Living Rider increases DB to keep pace with inflation: in Accidental Death Rider. if the
insured dies from an accident. DB is a multiple of the Face Amount.
#21 Under a straight life annu if the annuitant dies before the principal amount is paid out, the beneficiary will receive Guaranteed minimum henpfit b) The amount paid into the annuity. The remainder of the princinal. Nothin; the payments wilcease,
Nothin; the payments wilcease,
Straight or pure life annuity will pay a specific amount of income for the remainder of the annuitant’s life. This payment will cease at death, regardless of the amount of
principal that hasn’t been paid out. There is no refund
or payments to survivors
How long must insurers keep records of claims? a) 3 years b 4 years 5 years d) 6 years
d) 6 years
Insurers must keep records for at least 6 years or until the filing of a review of the record, whichever is longer.
#6. Which of the following is NOT a goal of risk retention?
To minimize the insured’s level of liability in the event of loss
b To reduce expenses and improve cash flow
c) To increase control of claim reserving and claims settlements
d To fund losses that cannot be insured
To minimize the insured’s level of liability in the event of loss
Retention usuallv results from three basic desires of the insured: to reduce expenses and improve cash flow, to increase control of claim reserving and claims
settlements, and to fund losses that cannot be insured.
22. A Universal Life Insurance policy is best described as a/an
Variable Life with a cash value account.
b) Whole Life policy with two premiums: target and minimum
c) Flexible Premium Variable Life policv
d) Annuallv Renewable Term policy with a cash value account.
Annuallv Renewable Term policy with a cash value account.
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
awavs annual renewable term insurance
lite insurance
#29.
During replacement of life insurance, a replacing insurer must do which of the following?
Send a copy of the Notice Regarding Replacement to the Department or Insurance
Obtain a list of all life insurance policies that will be replacec
Guarantee a replacement for each existing policy
d) Designate a new producer for a replaced policy
Obtain a list of all life insurance policies that will be replacec
The replacing insurance company must require from the producer a list of the applicant’s life insurance policies to be replaced and a copy or the replacement notice
provided to the applicant, and send each existing insurance companv a written communication advising or the proposed replacement
33.
The minimum interest rate on an equitv indexed annuitv is often based on
She returns from the insurance companvs separate account.
b) The annuitant’s individual stock portfolio
The insurance company s general account investments.
An index like Standard & Poors 500
An index like Standard & Poors 500
Equity indexed annuities are not securities, but they invest on a relatively aggressive basis to aim for higher returns. Like a fixed annuity, the equity indexed annuity has a
guaranteed minimum interest rate. Interest rates on equity indexed annuities are often tied to a familiar index, such as the Standard and Poor’s 500.
39. Which of the following statements about group life is correct?
a) The group sponsor receives a Certificate of Insurance.
D) he policy can be converted to an individual term insurance policv.
c. The cost of coverage is based on the ratio of men and women in the group
d) The premiums 7e higher than in an individual policy because there is no medical exam
The cost of coverage is based on the ratio of men and women in the group
Group life insurance can be converted to an individual whole life, not a term, policy; the group life insurance premiums are usually lower than those of an individual policy:
the group sponsor receives a master contract, while the participants receive certificates of insurance. The cost of the coverage is based on the average age of the gro
?
Need Ht
and the ratio of men to women
Which of the following is TRUE about credit life insurance? a) Debtor is the annuitant. b Creditor is the insured. c Debtor is the policy beneficiary. Creditor is the policvowner.
Creditor is the policvowner.
In creditlife insurance, the creditor is the policyowner and the beneficiary; the debtor is the insured
#47. If the Superintendent finds a licensee in violation of an unfair method or unfair practice he or she will issue a a) Cease and desist order. D hebate. Revocation of license. Comp ant record.
Cease and desist order.
A cease and desist order means the licensee must stop the violation he or she is suspected of doing.
Which or te rollowin8 is the DasIc source onrmatn used the coman in the risk seection rocess? Consumer report b) Application Agents repor d) Warranty
b) Application
The application is the basic source of information an insurer uses in the risk selection process.
51. When the insured selects the extended term nonforfeiture option, the cash value wIll be used to purchase term insurance with what face amount?
In lesser amounts for the remaining policy term of age 100.
b Equal to the cash value surrendered from the policv
The same as the original policy minus the casn value
Equal to the original policy for as long as the cash values will purchase
Equal to the original policy for as long as the cash values will purchase
With this option. the cash value is used as a single premium to purchase the same face amount as the original policy for as long a period of time as the cash will buy at the
insured’s currelilage.
52. An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA. how much will
be transferred from one plan administrator to another and what is the tax consequence of a direct transfer/
a $8.000. tax on growth only
$10.000, tax on growth only
$10.000, no tax consequence
0 s8.000. no tax consequence
$10.000, no tax consequence
During an IRA direct transfer (or direct rollover), the full amount gets reinvested from one plan to the other.
#60. 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? a Inspection Report Medical Information Bureaus report C Agents Report d Underwriter's Report
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
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a
result. Which policy rider caused this change?
a) Value Adiustment Rider
Return or rmum
cination rider
d) Cost of Living Rider
Cost of Living Rider
The Cost of Living rider annually adjusts the policys face value in accordance with the national rate of inflation or deflation. This rider adjusts the face amount of the
policy to correspond with the rate of inflation, in order to keep the initial value of the policy constant over time.
All of the following are true about variable products EXCEPT
The cash value is not guaranteed
Policyowners bear the investment risk
The premiums Ye invested in the insurer’s general account.
The minimum death benefit is guaranteec
The premiums Ye invested in the insurer’s general account.
Insurers selling variable products invest their customers monies in a separate account, which is very similar to a mutual fund. Since there is no guaranteed rate of retu
Need Help
customers must bear the investment risk
Which of the following is NOT true regarding policy loans
An insurer can charge interest on outstanding policy loans.
D A polICy loan may be repaid arter the policy is surrendered.
Money borrowed from the cash value is taxable.
Policv loans can be repaid at death
Money borrowed from the cash value is taxable.
Money borrowed from the cash value is not taxable. Policy loans can be repaid at any time, including surrender and death. An insurer can charge interest on outstanding
policy loans.
When an insurer begins underwriting procedures for an applicant, what will be the main source for its underwriting information? Medical records AppIication interviews State records
Application
The application contains most of the information used for underwriting purposes. This is why its completeness and accuracy are so crucial.
84. If an association is applying for a life settlement broker’s license. which of the following requirements must the association meet?
Establish a board or directors
so Authorize a natural person to act individually as a broker
c Emplov a minimum of 10 individual brokers
Maintain an active life license for at least I vear
Authorize a natural person to act individually as a broker
If a firm or association is applying for a broker S license, they must name and authorize natural persons to act individually as life settlement brokers for the firm.
#85. All of the following would be different between qualified and nonqualified retirement plans EXCEPT Taxation on accumulation D) Taxation or withdra wals IRS approval requirements
Taxation on accumulation
Taxation on acgum
ulation is deferred in both types of plans. The rest of the characteristics would differ.
The paid•
up addition option uses the dividend
1o accumulate additional savings for retirement
Ilo purchase a smaller amount of the same
type of insurance as the original policv
~ Tr
purchase a one-year term insurance in the amount of the casn value
To reduce the next years premium
Ilo purchase a smaller amount of the same
type of insurance as the original policv
The dividends
are used to purchase a single premium policy in addition to the face amount of the permanent policy.
+92
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?
Statement of Continued Good Health
Attending Physician Statement
A complete medical record
Sworn health aftidavit from the applicant
Attending Physician Statement
The APS is used to obtain medical DETAILS about a specific condition which has shown up in the application; the insurance company orders the intormation directly from
the physician, using a signed authorization which was part of the application
To sell variable life insurance policies, an agent must receive all of the following EXCEPT a Alite insurance license b) SEC registration. - FINRA registration. 0 A securities lIcense
SEC registration.
Agents selling variable life products must be registered with FINRA, have a securities license, and must be licensed within the state to sell life insurance. SEC registration
is for securities, not agents
#97. The policvowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? Interest only option b) Life income will period certain C) Joint and survivor Fixed amount option
Interest only option
With the interest-only option, the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals
98.
Which of the following is a key distinction between variable whole life and variable universal life products?
Variable whole life allows policv loans from the cash value.
b Variable universal life has a fixed oremium.
Variable whole life has a guaranteed death benefit.
Variable universal life is regulated solely through FINRA.
Variable whole life has a guaranteed death benefit.
Variable univefl life insurance may or may not have a minimum death benefit,
unlike variable whole life insurance which guarantees a minimum death benefit.
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a (Choose from the following options) 01. Whole Life Policy. R2. Convertible Term Policy. 03. Renewable Term Policy. 04. Decreasing Term Policy.
R2. Convertible Term Policy.
3. What required provision protects against unintentional lapse of the policy? (Choose from the following options) 01. Reinstatement ©2. Grace period 03. Assignment © 4. Payment of premiums
Grace period
4. In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? (Choose from the following options) O1 Unidirectional © 2. Aleatory 03. Conditional ©4. Unilateral
Unilateral
7. Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT (Choose from the following options) O1. Family health history. O 2. Alcohol and tobacco consumption. 03. Recent surgeries. © 4. Other insurance coverages.
Other insurance coverages
- Which of the following is true about the premium on the children’s rider in a life insurance policy?
(Choose from the following options)
O1. It decreases when the oldest child reaches the age of 21.
O 2. It increases when a newborn baby is added to the policy.
O 3. It decreases when an adopted child is added to the policy.
Q4. It remains the same no matter how many children are added to the policy.
Q4. It remains the same no matter how many children are added to the policy.
10.A couple receives a set amount of income from their annuity. When the wife dies, the husband
no longer receives annuity payments. What type of annuity did the couple buy?
(Choose from the following options)
01. Joint limited annuity
© 2. Joint life
O 3. Joint and survivor
O 4. Life with period certain
Joint life
How often must an insurance agent licensed in the state of New York renew the license? (Choose from the following options) O1. Every birthday © 2. Every 2 years O 3. Every even-numbered year O 4. Every odd-numbered year
Every two years
14. If an insured changes his payment plan from monthly to annually, what happens to the total premium? (Choose from the following options) O1. Doubles © 2. Increases 0 3. Decreases 0 4. Stays the same
Decreases
- In classifying a risk, the Home Office underwriting department will look at all of the following
EXCEPT
(Choose from the following options) - Applicant’s past income.
O 2. Applicant’s past medical history.
©3. Applicant’s present physical condition.
0 4. Applicant’s present occupation.
Applicant past income
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years? (Choose from the following options) O1.1 year 02.2 years © 3. 5 years O4.7 years <<
2 years
Question: 23 of 100 Answered: 22 Unanswered: 78 Marked: O View: All Time Left(Min):161
23. All of the following statements are true regarding installments for a fixed period annuity
settlement option EXCEPT
(Choose from the following options)
01. The insurer determines the amount for each payment.
R2. It is a life contingency option.
O 3. It will pay the benefit only for a designated period of time.
O 4. The payments are not guaranteed for
R2. It is a life contingency option.
Under an extended term nonforfeiture option, the policy cash value is converted to
(Choose from the following options)
03. A lower face amount than the whole life policy.
O 4. A higher face amount than the whole life policy.
The same face amount as the whole policy
Which Universal Life option has à gradually increasing cash value and a level death benefit? (Choose from the following options) O1. Juvenile life © 2. Term insurance ©3. Option B 14. Option A
Option A
Representations are written or oral statements made by the applicant which
(Choose from the following options)
01. Are immaterial to the actual acceptability of the insurance contract.
O2. Are considered true to the best of the applicant’s knowledge.
03. Are guaranteed to be true.
0 4. Are found to be false after further investigation.
Are considered true to the best of the applicant’s knowledge.
27. All of the following entities regulate variable life policies EXCEPT (Choose from the following options) O1. The Guaranty Association. ©2. Federal government. ©3. The SEC. 04. The Insurance Department.
O1. The Guaranty Association.
For which of the following reasons can a temporary license be issued?
(Choose from the following options)
O1. To provide temporary help to a licensed producer
O 2. To service the existing business
0 3. To solicit new business
© 4. To negotiate new insurance contracts
To service the existing business
30. When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy, as well as a refund of all of the premiums paid. Which rider is attached to the policy? (Choose from the following options) Q1. Return of premium 02. Cost of living 03. Decreasing term © 4. Accidental death
Return of premium
An insured owns a life insurance policy. To be able to pay some of her medical bills, she
withdraws a portion of the policy’s cash value. There is a limit for a withdrawal and the insurer
charges a fee. What type of policy does the insured most likely have?
(Choose from the following options)
01. Term life
O 2. Limited pay
Universal life
Which of the following best describes rescission?
(Choose from the following options)
O1. An insurer cancels a policy after an insured files a suspicious claim.
O 2. An insured agrees to cancel a policy for the return of the most recent premium paid.
03. An insured allows a policy to lapse.
04. An insurer cancels a policy after it has been issued and refunds all paid premiums.
An insurer cancels a policy after an insured files a suspicious claim.
The requirement that agents not commingle insurance monies with their own funds is known as (Choose from the following options) 01. Accepted accounting principal. Q2. Fiduciary responsibility. 03. Premium accountability. 0 4. Express authority.
Fiduciary responsibility.
35 Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income? (Choose from the following options) 01 Annuitization period 02. Pay-out period 03. Liquidation period 94. Depreciation period
- Depreciation period
- Which of the following is an approved written document that identifies procedures in place to
keep the insurer’s Information System safe?
(Choose from the following options) - Certificate of Coverage
O2. Privacy Disclosure
©3. Consumer Report
0 4. Cybersecurity Policy
0 4. Cybersecurity Policy
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? (Choose from the following options) 01. Assumed 02. Express Q3. Implied © 4. Apparent
Implied
- Which of the following would NOT be a violation of state insurance regulations?
(Choose from the following options) - Agent A uses her license to write only insurance for herself and her immediate family.
© 2. Agent B charges his clients a consulting fee, in addition to the premium for placing a policy.
© 3. Agent C uses her license to write only business other than controlled.
O 4. Agent D collects premiums due on policies and deposits the funds in his own personal
account.
© 3. Agent C uses her license to write only business other than controlled.
- What insurance concept is associated with the names Weiss and Fitch?
(Choose from the following options)
R1. Guides describing company financial integrity
© 2. Policy dividends - Types of mutual companies
© 4. Index used by stock companies
R1. Guides describing company financial integrity
- Which of the following statements is TRUE concerning irrevocable beneficiaries?
(Choose from the following options) - They may be changed at any time.
© 2. They can never be changed.
O 3. They may be changed only on the anniversary date of the policy. - They can be changed only with the written consent of that beneficiary.
- They can be changed only with the written consent of that beneficiary.
42 Which of the following statements is correct about a standard risk classification in the same age
group and with similar lifestyles?
(Choose from the following options)
O1 Standard risk is also known as high exposure risk
© 2 Standard risk is representative of the majority of people.
03. Standard risk pays a higher premium than a substandard risk
O 4. Standard risk requires extra rating.
© 2 Standard risk is representative of the majority of people.
43.If a life insurance policy has an irrevocable beneficiary designation,
(Choose from the following options)
O1. The owner can always change the beneficiary at will.
© 2. The beneficiary cannot be changed.
O 3. The beneficiary can only be changed with written permission of the beneficiary.
O 4. The beneficiary cannot be changed for at least 2 years.
O 3. The beneficiary can only be changed with written permission of the beneficiary.
45. Annuities can be used to fund which of the following? (Choose from the following options) 01. Estate creation ® 2. Retirement plans 03. Variable life insurance © 4. Group life insurance
- Retirement plans
Insurance producers must ensure that contracts they recommend are in the best interest of the insured. This is called (Choose from the following options) 01. Suitability. ©2. Client protection. 03. Approval. 04. Underwriting.
Suitability.
Which of the following types of annuities will generally provide the highest monthly income?
(Choose from the following options)
©3. Installment refund
© 4. Life with a 10-year period certain
Straight life
Which of the following best describes the MIB?
(Choose from the following options)
©1. It is a nonprofit organization that maintains underwriting information on applicants for life
and health insurance,
O 2. It is a government agency that collects medical information on the insured from the
insurance companies.
O 3. It is a member organization that protects insured against insolvent insurers.
O 4. It is a rating organization for health insurance.
©1. It is a nonprofit organization that maintains underwriting information on applicants for life
and health insurance,
- Which of the following applicants would NOT qualify for a Keogh Plan?
(Choose from the following options)
©1. Someone who works 400 hours per year
O2. Someone who has been employed for more than 12 months - Someone who is over 25 years of age
O 4. Someone who works for a self-employed individual
©1. Someone who works 400 hours per year
The Medical Information Bureau (MIB) was created to protect
(Choose from the following options)
01. Medical examiners that perform insurance physical examinations.
© 2. Insurance companies from adverse selection by high risk persons.
© 3. Insurance departments from lawsuits by policyowners.
© 4. Insureds from unreasonable underwriting requirements by the insurance companies.
- Insurance companies from adverse selection by high risk persons.
- If an applicant for a life insurance policy and person to be insured by the policy are two different
people, the underwriter would be concerned about
(Choose from the following options)
O1. The gender of the applicant.
O 2. The type of policy requested.
O 3. Which individual will pay the premium.
© 4. Whether an insurable interest exists between the individuals.
© 4. Whether an insurable interest exists between the individuals.
Two individuals are in the same risk and age class; yet, they are charged different rates for their
insurance policies due to an insignificant factor. What is this called?
(Choose from the following options)
O1. Law of large numbers
02. Misrepresentation
03. Adverse selection
04. Discrimination
Discrimination
57. For variable products, underlying assets must be kept in (Choose from the following options) 01. A revenue account. ©2. A money market account. 03. A general account. R4. A separate account.
R4. A separate account.
58. What method is used to determine the taxable portion of each annuity payment? (Choose from the following options) O1. The annuity to age ratio 02. The marginal tax formula Q3. The exclusion ratio 0 4. The excise ratio
Q3. The exclusion ratio
- Under a pure life annuity, an income is payable by the company
(Choose from the following options)
Q1. Only for the life of the annuitant.
O 2. Until the principal and interest are exhausted. - For a guaranteed period of time, whether or not the annuitant survives to the end of that
period.
O 4. For as long as either the annuitant or a named beneficiary is alive.
Q1. Only for the life of the annuitant.
All of the following are characteristics of group life insurance EXCEPT
(Choose from the following options)
01. Individuals covered under the policy receive a certificate of insurance.
© 2. Certificate holders may convert coverage to an individual policy without evidence of
insurability.
P3. Premiums are determined by the age, sex and occupation of each individual certificate
holder.
O 4. Amount of coverage is determined according to nondiscriminatory rules.
P3. Premiums are determined by the age, sex and occupation of each individual certificate
holder.
- In a survivorship life policy, when does the insurer pay the death benefit?
(Choose from the following options)
O1. Upon the last death
O2. Upon the first death - Half at the first death, and half at the second death
O 4. If the insured survives to age 100
O1. Upon the last death
Which of the following Life Insurance policies would be considered interest sensitive? (Choose from the following options) 01. Whole life © 2. Increasing term © 3. Universal life 0 4. Adjustable life
Universal life
An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy
also contains renewability and convertibility options. When the insured renews the policy in 5
years, what will happen to the premium?
(Choose from the following options)
O1. It will increase each year during the next 5 years as the face amount increases each year.
© 2. It will increase because the insured will be 5 years older than when the policy was originally
purchased.
O 3. It will remain the same for the new 5-year term.
O 4. It will decrease for the new 5-year term since the insured is now a lesser risk to the
company.
© 2. It will increase because the insured will be 5 years older than when the policy was originally
purchased.
Which of the following would be the best option that would help the surviving spouse of the
insured to put her child through daycare after the insured’s death?
(Choose from the following options)
01. Estate conservation
©2. Life insurance proceeds
03. State Education Waiver
0 4. Viatical settlement
Life insurance proceeds
policyowner cancels his life policy but instructs the insurance company to transfer the cash
value of his policy to an annuity. This nontaxable transaction is called
(Choose from the following options)
©1. Qualified distribution.
©2. Premature distribution.
03. Rollover.
R4.1035 exchange.
R4.1035 exchange.
Which of the following types of policies allows the policyowner to skip premium payments,
provided that there is enough cash value in the policy to cover the premium amount?
(Choose from the following options)
O1 Variable life
©2. Adjustable life
P 3. Universal life
O 4. Flexible life
Universal life
Which of the following best defines target premium in a universal life policy?
(Choose from the following options)
O1. The minimum amount to make sure the policy is annually renewable
O 2. The corridor of insurance
O3. The recommended amount to keep the policy in force throughout its lifetime
© 4. The maximum amount the policyowner may pay on a policy
The recommended amount to keep the policy in force throughout its lifetime
- The initial amount of credit life insurance may NOT exceed
(Choose from the following options)
O1. The amount to be repaid under the contract. - An amount set by statute and adjusted regularly for inflation.
- The borrower’s monthly income.
O 4. The borrower’s annual income.
O1. The amount to be repaid under the contract.
Which of the following individuals must pass the written examination to be licensed as an
insurance agent?
(Choose from the following options)
©1. A producer previously licensed in New Jersey who is applying for a New York license 120
days after becoming a resident of this state
© 2. A nonresident licensee currently licensed in another state
O 3. A ticket-selling airline representative for one-time issuance of baggage or accident
insurance
04. An applicant who has passed the written examination for an insurance agent’s license in
the past if he applies within 2 years following the date of license termination
A producer previously licensed in New Jersey who is applying for a New York license 120
days after becoming a resident of this state
Whose responsibility is it to make certain that an application for insurance is filled out completely and correctly? (Choose from the following options) 01. The applicant R2. The producer 03. The beneficiary of the applicant 0 4. The insurance company
The producer
All of the following information about a customer must be used in determining annuity suitability EXCEPT (Choose from the following options) R1. Beneficiary's age. 02. Tax status. ©3. Financial experience. 04. Annual income.
Beneficiary’s age
An insured wants to transfer his personal insurance policy to a friend. Under what conditions
would this be possible?
(Choose from the following options)
01. It is impossible to transfer a policy.
O 2. The insured would have to surrender his policy to the insurer, and his friend could then ask
to buy it.
O 3. The insured can transfer the policy to his friend and then notify the insurer of the change.
Q4. The insured will need a written consent of the insurer.
Q4. The insured will need a written consent of the insurer.
Following a career change, an insured is no longer required to perform many physical activities,
so he has implemented a program where he walks and jogs for 45 minutes each morning. The
insured has also eliminated most fatty foods from his diet. Which method of dealing with risk
does this scenario describe?
(Choose from the following options)
©1. Transfer
© 2. Avoidance
03. Retention
Q4. Reduction
Reduction
Which of the following is TRUE regarding variable annuities?
(Choose from the following options)
O1. A person selling variable annuities is required to have only a life agent’s license.
02. The annuitant assumes the risks on investment.
03. The funds are invested in the company’s general account.
O 4. The company guarantees a minimum interest rate.
The annuitant assumes the risks on investment.
Which concept is associated with “exclusion ratio”»
(Choose from the following options)
01. Dividend distribution
O2. How exclusion riders affect an insurance premium
03. Policy provisions
R4. Annuity payments
R4. Annuity payments
Which of the following is NOT true regarding policy loans?
(Choose from the following options)
O1. An insurer can charge interest on outstanding policy loans.
© 2. A policy loan may be repaid after the policy is surrendered.
©3. Money borrowed from the cash value is taxable.
© 4. Policy loans can be repaid at death.
A policy loan may be repaid after the policy is surrendered.
so.Steven prints a pamphlet to advertise his life insurance business In the pamphlet he includes
the full name of his insurance agency and the type of insurance that he offers What else must
he include?
(Choose from the following options)
O1. There is nothing else that Steven must include
02. List of his credentials as a producer
03. State licensing information
4 Address of his principal office
4 Address of his principal office
The Waiver of Cost of Insurance rider is found in what type of insurance? (Choose from the following options) 01. Juvenile Life R2. Universal Life 03. Whole Life 0 4. Joint and Survivor
Universal life
Which of the following employees insured under a group life plan would be allowed to convert to
individual insurance of the same coverage once the plan is terminated?
(Choose from the following options)
O1. Those who have worked in the company for at least 3 years
© 2. Those who have dependents
© 3. Those who have no history of claims
Q4. Those who have been insured under the plan for at least 5 years
Q4. Those who have been insured under the plan for at least 5 years
In a single employer group plan, what is the name of the policy issued to the employer? (Choose from the following options) 01. Certificate of authority (R2. Master contract © 3. Certificate of insurance 0 4. Employer-insurer contract
Master contract
insured has a life insurance policy from a participating company and receives quarterly
dividends. He has instructed the company to apply the policy dividends to increase the death
benefit. The dividend option that the insured has chosen is called
(Choose from the following options)
01. One-year term purchase.
02. Accumulation at interest.
©3. Reduction of premiums.
R4. Paid-up additions.
R4. Paid-up additions.
an insured continually uses the automatic premium loan option to pay the policy premium,
(Choose from the following options)
O1. The policy will terminate when the cash value is reduced to nothing.
O2. The face amount of the policy will be reduced by the automatic premium loan amount.
03. The cash value will continue to increase.
O 4. The insurer will increase the premium amount.
O1. The policy will terminate when the cash value is reduced to nothing.
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT (Choose from the following options) R1. Signed waiver of premium. 02. Statement of good health. O 3. Payment of premium. O 4. Delivery receipt.
Signed waiver of premium.
An insurance producer who by contract is bound to write insurance for only one company is classified as a/an (Choose from the following options) 01. Solicitor. O 2. Broker. 03. Independent producer. O 4. Captive agent.
Captive agent
A domestic insurer issuing variable contracts must establish one or more (Choose from the following options) O1. Liability accounts. 02. Annuity accounts. 03. General accounts. (4 Separate accounts
Separate account
- A tax-sheltered annuity is a special tax-favored retirement plan available to
(Choose from the following options)
O1. Certain groups depending on factors such as race, gender, and age.
R2. Certain groups of employees only.
©3. Anyone.
© 4. Certain age groups only.
R2. Certain groups of employees only.
In comparison to consumer reports, which of the following describes a unique characteristic of
investigative consumer reports?
(Choose from the following options)
O1. They provide additional information from an outside source about a particular risk.
O 2. They provide information about a customer’s character and reputation.
© 3. The customer has no knowledge of this action.
O 4. The customer’s associates, friends, and neighbors provide the report’s data.
- The customer’s associates, friends, and neighbors provide the report’s data.
The law states that an insurer is allowed to pay the entire Death Benefit to the insured if they qualify to use the Accelerated Death Benefit Rider; however, most insurers limit the amount of the Death Benefit paid to (Choose from the following options) 01.75% 02.30% 03.50% 04.60%
50%
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select? (Choose from the following options) O1. Life with period certain ©2. Fixed amount 03. Interest only 0 4. Fixed period
Fixed period
Which of the following can surrender a deferred annuity contract?
(Choose from the following options)
O1. A deferred annuity cannot be surrendered.
O 2. Only the annuity owner
O 3. Only the insurance company for nonpayment of premiums
O 4. The beneficiary after the owner’s death
O 2. Only the annuity owner
How are contributions to a tax-sheltered annuity treated with regards to taxation?
(Choose from the following options)
O1 They are taxed as income for the employee, but are tax free upon withdrawal.
O 2. They are not included as income for the employee, but are taxable upon distribution.
03. They are never taxed.
O 4. They are taxed as income for the employee.
They are not included as income for the employee, but are taxable upon distribution.
