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LIFE PRODUCER GUARANTY EXAM | ALL
QUESTIONS AND CORRECT ANSWERS |
ALREADY GRADED A+ | VERIFIED
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During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of ------CORRECT ANSWER--------------- Defamation Which of the following is NOT a duty of the existing insurer when replacement is involved? ------CORRECT ANSWER---------------Provide notice to the policy owner the right to return the policy within 30 days of delivery and receive a full refund An insurer decided to terminate a producer. The insurer just notified the Commissioner of this decision. How long does the insurer have to mail a copy of the notification to the producer? ------CORRECT ANSWER------------ ---15 days All of the expenses of an examination must be paid for by the insurer being examined. To which fund are payments remitted ------CORRECT ANSWER---------------Insurance regulation fund Which of the following types of life insurance policies include a conversion of termination provision? ------CORRECT ANSWER---------------Whole life
An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request? ------CORRECT ANSWER---------------3 days An IRA owner who is 57 years old wants to make a withdrawal from her traditional IRA. What penalty will be imposed ------CORRECT ANSWER----- ----------10 percent (before 59 1/2 = 10 percent penalty) What does the application of contract of adhesion mean? ------CORRECT ANSWER---------------Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured— The insurer prepares the policy and submits it to the insured on a take-it-or- leave-it basis. Because the insured does not have input in drafting the policy but simply adheres to the terms of the policy, the policy is classified as a contract of adhesion. Any uncertain terms in the policy will be interpreted in favor of the insured. What is the purpose of key-person insurance? ------CORRECT ANSWER--- ------------A To cover decreased business revenues as a result of the death of a key employee In a life insurance application, all of the following signatures will be required EXCEPT.... ------CORRECT ANSWER---------------home office underwriter If a life insurance company uses HIV testing as a part of its underwriting, when must an applicant be notified of the procedure? ------CORRECT ANSWER---------------Prior to performance of test
the insured's death is called the ------CORRECT ANSWER--------------- Insuring clause 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? ------CORRECT ANSWER---------------Paid up addition Policy loan requests, except for loan requests for payment of due premiums, may be deferred for a period of up to. ------CORRECT ANSWER---------------6 months A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will... ------CORRECT ANSWER---------------continue to increase Which of the following policies would NOT offer a policy loan option? ------ CORRECT ANSWER---------------Term life A loss resulting from which of the following would qualify for the accidental death rider coverage? ------CORRECT ANSWER----------------an automobile accident A new homebuyer wants to purchase a life insurance policy that would protect his family against losing the home, should he die before the mortgage was paid. The most inexpensive type of policy that would accomplish this need would be ------CORRECT ANSWER--------------- Decreasing term
According to the Fair Credit Reporting Act, all of the following statements are true EXCEPT... ------CORRECT ANSWER---------------If an applicant is declined for an insurance policy, he or she has no right to know what was in the report Contributions to Roth IRA.. ------CORRECT ANSWER---------------Are not tax deductible If an applicant's health is poorer than that of an average applicant, the policy may be issued.. ------CORRECT ANSWER---------------A substandard Which of the following would NOT trigger the payment of Accelerated Death Benefits?.. ------CORRECT ANSWER---------------A Being permanently disabled Which of the following will NOT be included in the buyer's guide? ------ CORRECT ANSWER---------------A Specific information about the policy Which of the following losses would likely be covered under the Accidental Death rider? ------CORRECT ANSWER---------------death caused by head on collision With Adjustable Life, the owner can change all of the following EXCEPT.. -- ----CORRECT ANSWER---------------The insured
Cash Value guarantees in a whole life policy are called ------CORRECT ANSWER---------------Nonforfeiture Values Life insurance creates an immediate estate. Which of the following best explains this statement? ------CORRECT ANSWER---------------The face value of the policy is payable to the beneficiary upon the death of the insured Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value? ------CORRECT ANSWER---------------variable whole life A married couple wants to include the entire family in their whole life policy under one rider. Which of the following riders will help them achieve that goal? ------CORRECT ANSWER---------------Family term The entire contract includes all of the following EXCEPT ------CORRECT ANSWER---------------A buyer's guide Which of the following would NOT be eligible for coverage under key person? ------CORRECT ANSWER---------------owner of a shop In order for a business partner to be eligible for a Keogh plan, he/she must work full-time and own at least how much of the business? ------CORRECT ANSWER---------------10%
Which of the following are characteristics of term life insurance? ------ CORRECT ANSWER---------------Renewable,low cost What is the maximum loan amount a policyowner may withdrawal from a variable universal life insurance policy? ------CORRECT ANSWER------------ ---An amount not exceeding the cash value Under which of the following conditions would life insurance proceeds be taxable by the federal government? ------CORRECT ANSWER---------------If taken in lump sum Which of the following would be TRUE of both the fixed-period and fixed- amount settlement options? ------CORRECT ANSWER---------------Both gurentee interest and principal will be paid A married couple wants to include the entire family in their whole life policy under one rider. Which of the following riders will help them achieve that goal? ------CORRECT ANSWER---------------Family term According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed ------CORRECT ANSWER---------------The primary beneficiary died before the insured Which of the following is guaranteed under a variable whole life insurance policy? ------CORRECT ANSWER---------------min death benefit
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 retirement plan does S have? ------CORRECT ANSWER---------------Simplified employee plan An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request? ------CORRECT ANSWER---------------Within 3 days What happens to the face amount of a whole life policy if the insured reaches the age of 100? ------CORRECT ANSWER---------------The face amount is paid to the insured J's retirement plan meets all federal requirements and entitles him to certain tax benefits as the owner of the plan. What term best describes J's retirement plan? ------CORRECT ANSWER---------------Qaulified Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application? ------ CORRECT ANSWER---------------The application contains material misstatements. Because of an injury, an insured has been unable to work for 7 months. When his life insurance premium came due, he was unable to pay, yet the policy remained in force. The policy includes ------CORRECT ANSWER----- ----------Waiver of premium
In whole life insurance, when is the policy cash value scheduled to equal the face amount? ------CORRECT ANSWER---------------At the insured's age 100 What effect will the long-term care (LTC) rider have on the death benefit of a life insurance policy if LTC benefits were paid to the insured? ------ CORRECT ANSWER---------------Reduce the death benefit Which of the following would NOT be eligible for coverage under key person? ------CORRECT ANSWER---------------The owner of a shop In contrasting stock insurers with mutual insurers, which statement is true? ------CORRECT ANSWER---------------Stock insurers are owned by the shareholders and issue nonparticipating policies. Under which of the following conditions would life insurance proceeds be taxable by the federal government? ------CORRECT ANSWER---------------If there is transfer if value Which of the following bears the investment risk in a variable life insurance policy? ------CORRECT ANSWER---------------The policy owner What guarantees that the information explained in the insurance contract is true? ------CORRECT ANSWER---------------A warranty
the area of the insurance laws and rules? ------CORRECT ANSWER--------- ------ 3 According to the life insurance replacement regulations, which of the following would be an example of policy replacement? ------CORRECT ANSWER---------------policy is reissued with a reduction in cash value. Which of the following reduces opportunity for misrepresentation, protects the interests of the policyholders by establishing minimum standards, and establishes penalties for failure to comply with requirements? ------ CORRECT ANSWER---------------Replacement— Replacement rules reduce opportunity for misrepresentation, protect the interests of the policyholders by establishing minimum standards, and establish penalties for failure to comply with requirements All the following are true regarding qualifications for licensing in Hawaii EXCEPT ------CORRECT ANSWER---------------The applicant can apply if he or she has been convicted of a felony all of the following are true of credit life EXCEPT ------CORRECT ANSWER---------------The insured names the beneficiary Guaranteeing future dividends is considered to be an unfair or deceptive act known as ------CORRECT ANSWER---------------Misrepresentation An aleatory contract is based on what kind of exchange?.. ------CORRECT ANSWER---------------A Unequal exchange of values
An agreement that is enforceable by law is known as what kind of contract? ------CORRECT ANSWER---------------Legal What guarantees that the information explained in the insurance contract is true? ------CORRECT ANSWER---------------A warranty An applicant may challenge information discovered as a result of an investigative consumer report under which of the following Acts?... ------ CORRECT ANSWER---------------Fair credit reporting When life insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as.. ------CORRECT ANSWER--------------- Estate conservation Cash Value guarantees in a whole life policy are called.. ------CORRECT ANSWER---------------nonforfeiture values According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?- ------CORRECT ANSWER---------------The primary beneficiary died before the insured An Equity Indexed Annuity will grow based upon- performance of a recognized index - ------CORRECT ANSWER---------------An Equity Indexed Annuity grows based upon a specific recognized index such as the Dow Jones or the Standard and Poor's 500
—The existing insurer must retain all replacement notifications received by the replacing insurer for at 5 years or until the next examination, whichever is later; send a letter to the policy owner of the right to receive information regarding the values of the existing policy within 5 business days; and if the policy owner requests to borrow, surrender or withdraw any policy values, the insurer must send a notice advising the effect of policy values An example of an alien insurer doing business in this state is one formed under the laws of.. ------CORRECT ANSWER---------------MEXICO— An alien insurer is a company chartered outside the United States. Insurance companies incorporated in territorial possessions, such as Puerto Rico, are considered foreign. All of the following statements about mutual insurance companies are correct EXCEPT... ------CORRECT ANSWER---------------Policy dividends issued by mutual companies are guaranteed and not taxable.
- Insurance policy dividends are not guaranteed and are not taxable. An insurer decided to terminate a producer. The insurer just notified the Commissioner of this decision. How long does the insurer have to mail a copy of the notification to the producer ------CORRECT ANSWER------------- --15 days
- After notifying the Commissioner, the insurer must mail a copy of that notification to the producer within 15 days According to the life insurance replacement regulations, which of the following would be an example of policy replacement? ------CORRECT ANSWER---------------A policy is reissued with a reduction in cash value.
- Replacement refers to any transaction in which new life insurance or an annuity is purchased, resulting in reduced paid-up insurance, continuation
of extended term insurance or otherwise reduced in value by the use of nonforfeiture benefits or other policy values All of the following are true of credit life EXCEPt ------CORRECT ANSWER- --------------The insured names the beneficiary. With Credit Life the lending institution is the owner and names the beneficiary. Anna has been working for her current employer for 4 years. The company's group whole life insurance policy is terminated. What will she need to do in order to obtain a new, individual policy? ------CORRECT ANSWER---------------She will need to apply and provide proof of insurability—-The conversion on termination of a policy is offered to insured individuals when the master contract is terminated. Then the contract must allow every person insured for at least 5 years prior to the termination to convert to an individual policy. In this case, Anna had only been insured for four years prior to the policy's termination, so she is not covered by this provision. A temporary producer license could be issued, without examination, to all of the following, EXCEPt ------CORRECT ANSWER---------------Spouse of retiring producer—There is no provision in the insurance code that allows for a temporary license to be issued on behalf of a retired producer.
