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What is an insurance contract that identifies individuals by relationship to a specific organization? - ✔✔group insurance When an insured under a group life insurance plan in NM elects the conversation option, the new policy is issued - ✔✔Without requiring evidence of insurability What is another name for a Keogh plan - ✔✔HR 10 plan An insurance policy may be issued with a preferred insurance premium in all these situations EXEPT - ✔✔Living in a rural area All of these statements concerning group credit life insurance are false EXEPT - ✔✔The face amount is based on the outstanding loan balance Risk is the process of analyzing exposures that create risk and designing programs to handle them - ✔✔management XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums? - ✔✔implied authority
When the superintendent believes an agent is causing substantial and material harm, the superintendent has the authority to - ✔✔issue a cease and desist order against the agent Who normally pays the premiums for group credit life insurance? - ✔✔borrower For policyholders in the same risk classification, it is unlawful to - ✔✔Charge different premiums What happens to the cash value of a market value adjusted annuity if it's surrendered prior to the end of the stated guarantee period - ✔✔Subject to market value adjustment What must be given to a life insurance applicant when the agent receives an application and the initial premium - ✔✔Conditional receipt Which situation would not require the insureds consent when a life insurance policy is issued - ✔✔A policy is purchased by a parent for a minor child A business becoming incorporated is an example of risk. - ✔✔to transfer The Superintendent may suspend an agent's license when the agent - ✔✔Rebates a portion of the commission to the insured What would be considered an advantage of purchasing term life insurance? - ✔✔The initial premium is lower compared to an equivalent amount of whole life coverage When an insurance appointment with an agent is terminated, the party must notify the agent of the termination is the - ✔✔Insurer
A life insurance policyowner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen? - ✔✔Reduction of premium payment With life insurance, the needs approach is used primarily in determining - ✔✔how much life insurance a client should apply for Which life insurance policy provision prohibits a beneficiary from "commuting, encumbering, withdrawing,or assigning" any portion of the proceeds prior to actual receipt from the company? - ✔✔Spendthrift clause Kevin has an existing life insurance policy and assigns it to another insurer for a new contract. How would this transaction be treated for tax purposes? - ✔✔As a Section 1035 exchange If a basic illustration is not provided, an insurer MUST provide a policy summary to a prospective insured at which of the following times? - ✔✔When the policy is delivered Which of the following would most likely purchase an immediate annuity? - ✔✔Retiree having a lump sum to invest A life insurance policy in NM becomes incontestable after it has been force for - ✔✔ 2 years A retired couple would like to maximize the income derived from their combined life savings and have it payable until they both die. Which annuity would be their best choice? - ✔✔Joint and survivor annuity If an agent misleads or fails to adequately disclose the title and true nature of a policy offered to a potential insured, it may be considered - ✔✔misrepresentation
Which life insurance policy would be eligible to include an automatic premium loan provision - ✔✔whole life Sylvia purchased an annuity for $100,000 from the proceeds of an inheritance. No further payments are permitted and the income stream begins in 15 years. This contract is a(n) - ✔✔Single Premium Deferred Annuity Traditional individual retirement annuity (IRA) distributions must start by - ✔✔April 1st of the year following the year the participant attains age 70 1/ Which statement regarding a single premium life insurance policy is NOT correct? - ✔✔Additional premiums may be required under certain conditions What effect can a long term care benefit rider have in a life insurance policy? - ✔✔Reduced death benefit The annuitant in a single premium deferred annuity (SPDA) - ✔✔Makes only one premium payment A transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered is called - ✔✔replacement What is payable to the policyowner if a whole life policy is surrendered prior to its maturity date - ✔✔cash value A hold-harmless clause is an example of risk - ✔✔to transfer
What happens to the purchasing power of benefit payments from a fixed life annuity when the cost of living goes up - ✔✔decreases Which of these must be disclosed in a universal life policy? - ✔✔The policy's surrender charges Replacing a policy when it is NOT on the best interest of the client is known as - ✔✔Twisting Two agents are licensed in the same line of insurance. One agent provides the other with a referral that resultin a sale. How will the commission on this sale likely be paid - ✔✔Absents will share commision Which statement is INCORRECT about the interest-only settlement option in a life insurance policy? - ✔✔Interest on proceeds must be paid by the beneficiary A signed good health statement may be collected by a life producer at the time of - ✔✔Policy delivery In NM, who would be eligible for a temporary agents license - ✔✔A designated employee who is replacing a deceased agent All of the following are unfair claims settlement practices EXCEPT - ✔✔An attempt to settle a claim by arbitration A licensee who is required to take continuing education must include how many ethics coursework hours? - ✔✔ 1
How are level term policies able to provide level premiums - ✔✔Premiums are averaged over the term of the policy According to Federal Fraud and False Statements Act, which of these is considered to be an intentional violation? - ✔✔Making false entries in a company's books The automatic premium loan provision can be accurately described as a - ✔✔provision that provides a policy loan to pay any premiums by the end of the grace period When does the insured stop making payments under a third-payment whole life policy? - ✔✔At the time of death or 30 years after the policy's inception, which ever comes first An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? - ✔✔When the conditions of the receipt are met Which term refers to insurance written on the interests of the licensee, the licensee's employer, or the licensee's immediate family? - ✔✔Controlled business Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends - ✔✔equal the net single premium for the same face amount at the insured's attained age Which life insurance policy clause prohibits an insurance company from questioning the validity of the contract after stated period of the time has passed? - ✔✔Incontestable clause
Which is an accurate description of the premium in a graded premium life insurance policy? - ✔✔Annual increases in premium for a stated number of years then levels off for the remainder of the contract Security laws passed by Congress are enforced by which Federal agency? - ✔✔Security and Exchange Commission (SEC) The irs has a minimum coverage rule regarding qualified retirement plans. This rule states that each qualified plan is required to - ✔✔Benefit a broad cross-section of employees The premiums paid by an employer for his employee's group life insurance are usually considered to be - ✔✔Tax deductible to the employer A life insurance illustration showing future premiums being paid out of nonguaranteed values must disclose that - ✔✔The policyowner may need to resume premium payments depending on actual results A life insurance policy's contingent beneficiary is the - ✔✔Person who receives the death benefits of the primary beneficiary dies before the insured Why do insurers require a minimum number of employees participate in a group insurance plan? - ✔✔Minimize adverse selection All of these are considered features of whole life insurance EXCEPT - ✔✔Initial premium is lower than for an equivalent amount of term insurance
Under Federal Law, which of the following actions may result in a producer becoming imprisoned? - ✔✔Producer embezzling funds from insurer An agent who makes an agreement that unreasonably restrains the business of insurance may have violated regulations against - ✔✔Boycott, coercion and intimidation At what point are death proceeds paid in a joint life insurance policy? - ✔✔When the first insured dies An individual who purchases a modified life insurance policy expects - ✔✔an improvement in future income How may an insurance company classify an accidental death benefit on a life policy? - ✔✔As an optional policy rider What is considered the collateral on a life insurance policy loan? - ✔✔The policy's cash value Which life insurance provision allows a policyowner to cancel the policy and receive a full refund within a limited time period after policy delivery? - ✔✔Free look period Which provision makes the application part of the annuity contract? - ✔✔Entire contract clause How does the cost for a survivorship life policy compare to the cost of combining two separate individual life insurance policies - ✔✔Survivorship life policy is lower
A life insurance policy provision that has ability to reduce the death benefit is called the - ✔✔Accelerated benefit (living) Which of these is NOT relevant when determining the amount of personal life insurance needed? - ✔✔Local unemployment rate Which of the following is NOT guaranteed in a whole life policy? - ✔✔Dividend scale A life insurance agent licensed in NM is authorized to - ✔✔Solicit receive and forward application to insurer What would be valid reason for naming a trust as the beneficiary of a life insurance policy as opposed to naming an individual? - ✔✔Management of proceeds would be provided Which of these is NOT used as selection criteria in the underwriting process of a life insurance application? - ✔✔national origin A cease and desist order issued by the superintendent against an agent - ✔✔Prohibits a specific practice listed in the order When a ten year renewable term life insurance policy issued at age 45 is renewed, the premium rate will be the current rate for - ✔✔Ten year term insurance for a person aged 55 When a sum of money undergoes capital liquidation, that sum will - ✔✔decrease in size
A terminally ill policyowner decides to sell his life insurance policy at a discount to help support his family. This scale is called a(n) - ✔✔Viaticle settlement The grace period for a life insurance policy with an annual premium is usually - ✔✔ 30 says An insurance application requires an applicant to make a full, accurate disclosure of the risk factor involved. Using this criteria, an insurance policy is considered what type of contract? - ✔✔Contract of utmost good faith What is the face amount of a $50,000 graded death benefit life insurance policy when the policy issued? - ✔✔Under 50k initially, but increases overtime Which of the following outlines the authority given to the producer on behalf of the insurer? - ✔✔Producer contract A policyowner is permitted to take out a policy loan on a whole life policy at what point? - ✔✔When the policy has a cash value In a speech to a local association, an agent incorrectly stated that XYZ insurance company is in financial difficulty and not paying claims. The agent is guilty of - ✔✔Deflamation
