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MN life insurance With 203 Test Exam
Questions
Which statement best describes agreement as it relates to insurance contracts? -Correct Answer โ โ One party accepts the exact terms of the other party's offer.
Who is the annuity owner? -Correct Answer โ โ The person who purchases the annuity
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 -Correct Answer โ โ 60 days
Which of the following are characteristics of term life insurance? - Correct Answer โ โ Temporary protection, renewability, no cash value
Which of the following is true regarding pure life annuity settlement option? -Correct Answer โ โ It provides the highest monthly benefit
j works part time in her father's insurance agency but she doesn't have an insurance producer license. she may perform all of the following activities except? -Correct Answer โ โ Collect premium for in-force polices and explain coverages to clients that have existing polices written by her father
a producer's license lapses. it can be reinstated without requiring the producer pass to the licensing exam again, provided that the producer applies for reinstatement within -Correct Answer โ โ 12 months
an agreement that is enforceable by law is known as what kind of contract? -Correct Answer โ โ Legal
The reduction of premium option uses the dividend to reduce -Correct Answer โ โ Next year's premium
An insurer that operates for one or more social, educational, charitable, benevolent, or religious purposes for the benefit of its members is known as a -Correct Answer โ โ Fraternal Insurer
Which of the following best describes pure life of annuity? -Correct Answer โ โ It provides the highest monthly benefits.
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 โ โ 3 days
A producer's license lapses. it can be reinstated without requiring the producer pass to the licensing exam again, provided that the producer applies for reinstatement within -Correct Answer โ โ 12 months
An insured has 2 property policies in force covering the same risk. when a loss occurs, which of the following policy provisions states that each policy will pay the same proportion of its limits to the overall coverage? -Correct Answer โ โ Pro rata
dividends received on participating life insurance policies are -Correct Answer โ โ Not taxable because they are a return of unused premiums.
All of the following are true of the Survivorship Life policy EXCEPT - Correct Answer โ โ The premium is based on the age of each insured.
According to the common Disaster Clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who dies first, which of the following will be assumed? - Correct Answer โ โ The primary beneficiary died before the insured.
Insurers are forbidden to do all of the following with their advertisements EXCEPT -Correct Answer โ โ Promote interest in insurance coverage.
According to the Fair Credit Reporting Act, all of the following statements are true EXCEPT -Correct Answer โ โ If an applicant is declined for an insurance policy, he or she has no right to know what was in the report.
- Which of the following provisions is usually found in homeowners' policies and provides a replacement cost settlement to policyholders who carry adequate insurance? -Correct Answer โ โ Insurance to value
- Variable life insurance is regulated by all of the following entities EXCEPT -Correct Answer โ โ The U.S Department of Treasury.
- When may an insurer advertise its membership in the Minnesota Insurance Guaranty Association? -Correct Answer โ โ At no time
- Which of the following policies would NOY offer a policy loan option? -Correct Answer โ โ Term life
- an insured has a life insurance policy in the amount of 250 000 naming his wife as beneficiary. upon his death, his beneficiary decides not to received the death benefit for some time, when she finally receives the death benefit check it's in the amount of 250530. is any portion of the proceeds that the beneficiary receives taxable? -Correct Answer โ โ Yes, proceeds in excess of face amount are taxable as interest.
When an insurer examination is ordered by the Commissioner, who pays for the cost of the examination? -Correct Answer โ โ The insurance company that is examined
At what point would an automatic premium loan be generated? - Correct Answer โ โ Following the grace period
An insured decides to surrender his whole life insurance policy. The cash value at surrender is higher than the premiums paid into the policy, due to interest. What part of the surrender value would be
Which of the following is true regarding the cash value in term life insurance policies? -Correct Answer โ โ There are no cash values
What is the maximum loan amount a policyowner may withdraw from a variable universal life insurance policy? -Correct Answer โ โ An amount not exceeding the cash value
Insurers Insurer CANNOT transact insurance in this state without a - Correct Answer โ โ Certificate of authority
If an applicant submits the initial premium with an application, which action constitutes acceptance? -Correct Answer โ โ The underwriters approve the application
Which of the following is/are correct regarding SIMPLE plans? -Correct Answer โ โ Contributions and earnings are tax-deferred until funds are withdrawn.
Which of the following is true regarding the cash value life insurance policies? -Correct Answer โ โ There are no cash value
What is the maximum penalty per offense for transacting insurance without a certificate of authority? -Correct Answer โ โ $1,
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 โ โ Decreasing term
Licensees must report of any action taken against them in another jurisdiction or by another government agency in Minnesota within how many days of the final disposition of the matter? -Correct Answer โ โ 30 days
All of the following are true of credit life EXCEPT -Correct Answer โ
โ The insured names the beneficiary.
Which distribution from a modified endowment contract would be taxable as income at the time received to the extent that the cash value of the contract immediately before the payment exceeds the investment in the contract? -Correct Answer โ โ Both partial surrender and policy loan
Variable insurance and variable annuities are regulated by -Correct Answer โ โ SEC, FINRA, and Departments of Insurance.
An annuitant pays the annuity premium on the 14th of each month. Which best describes the arrangement? -Correct Answer โ โ Level
How does insurance distribute the financial consequences of individual losses? -Correct Answer โ โ It transfers the risk to all people insured
A whole-life policy that will generate immediate cash value is a - Correct Answer โ โ Single premium policy
Which of the following is NOT a power held by the commissioner? - Correct Answer โ โ Set the premium rates for insurance sold in this state.
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option? -Correct Answer โ โ Extended term
As a part of the policy approval process the commissioner may require the insurer to provide all of the following EXCEPT -Correct Answer โ
โ The producer's commissioner schedule
Which riders pays a beneficiary a death benefit that is double or triple the face amount if the insureds death was caused by an accident as defined in the policy? -Correct Answer โ โ An accidental death rider
Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination? -Correct
Which of the following is not true regarding the accumulation period of an annuity? -Correct Answer โ โ It would not occur in a deferred annuity.
What is the purpose of a free-look period in insurance policies? - Correct Answer โ โ It allows the insured to reject the policy with a full refund.
An insurance contract must contain all of the following to be considered legally binding EXCEPT: -Correct Answer โ โ Beneficiary's Consent
Which of the following would be considered an unfair claims settlement practice? -Correct Answer โ โ A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered.
All of the following are true regarding insurance policy loans EXCEPT - Correct Answer โ โ Policy loans can be made on policies that do not accumulate cash value
What is the purpose of a conditional receipt?
a. it serves as proof that the applicant has been determined insurable.
b. it is given only to applicants who fully prepay the premium.
c. It is intended to provide coverage on a date prior to the policy issue.
d. it guarantees that a policy will be issued in the amount applied for. -Correct Answer โ โ c. It is intended to provide coverage on a date prior to the policy issue.
A license Minnesota insurance producer must notify the Commissioner of a change of address within
If the producer's license lapses, how much time to apply for reinstatement without taking exam? -Correct Answer โ โ 12 months
In Minnesota, policy issued without containing, bold-face type, the policy owner's right to cancel (free look), to get full refund, the policy must be return within -Correct Answer โ โ 1 year
Accumulation at interest option except -Correct Answer โ โ The interest is not taxable since it remains inside the insurance policy
Life settlement broker represents -Correct Answer โ โ The owner
Another name for interest-sensitive whole life insurance -Correct Answer โ โ Current assumption life
Under the nonforfeiture option, the policy cash value is converted to - Correct Answer โ โ Same face amount as the whole life policy
Not a power given to the commissioner -Correct Answer โ โ Set the insurance rate to be charged
Example of liquidity in life insurance -Correct Answer โ โ Cash value available to policyowner
The insured can return the policy for a full refund if the insured is dissatisfied with the policy. -Correct Answer โ โ Free-look period
If the consumer challenges the accuracy of the information contained in the consumer or investigative report, the reporting agency must - Correct Answer โ โ Respond to the consumer's complaint
Statements are true regarding installments for a fixed amount except -Correct Answer โ โ Payment stops when the annuitant dies
Change need to make to the application for insurance, the agent may do all the following except -Correct Answer โ โ Erase the incorrect answer and record the correct answer
In which instances would the premium be tax deductible -Correct Answer โ โ Premium paid by an employer on 30,000 group term life insurance plans for employees
