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The balance of the loan will be taken out of the death benefit - answer If a policy has a automatic loan provision, what happens if the insured dies before the loan is paid back? Inspection Report - answer An insurer receives a report regarding potential insured that includes financial status, hobbies, and habits. What type of report is that? Spendthrift Clause - answer The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as Term - answer Children's riders attached to whole life policies are usually issued as what type of insurance? Decreasing Term - answer An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation 24 total hours, including 8 hours approved for the line of licensing that the producer holds - answer How many hours of CE must be completed every 2 years? The creditors have rights to the proceeds if they can show evidence of valid assignment - answer Which of the following statements is true concerning the creditors of the deceased insured? Insurable interest and consent - answer A life insurance policy has a legal purpose if both of which of the following elements exist? Cost of Living Rider - answer A long stretch of national economic hardship causes a 7% rate of inflation. A policy owner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?
Universal Life - answer Which of the following Life Insurance policies would be considered interest- sensitive? Express Authority - answer The authority granted to an agent through the agent's contract is referred to as The policyowner must sign a delivery receipt - answer What must happen when an individual policy or annuity has been personally delivered to the policyowner? Reinsure policies of the insolvent insurer through other companies - answer In the event of an insurer's insolvency, the South Carolina Life and Health Guaranty Association will within 30 days - answer Once the Director issues a cease and desist order, how soon must an insurer comply with the order? It is reduced to the amount of what the cash value would buy as a single premium - answer When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy? Suggesting negotiations in settling the claim - answer All of the following are unfair claims settlement practices EXCEPT 3 - answer How many hours of continuing education in Ethics are required each compliance period The Broker - answer In the transaction of insurance, which of the following is considered to be representing the client? The beneficiary - answer In a group life insurance policy, the employer may select all of the following EXCEPT Lower - answer The premium of a survivorship life policy compared with that of a joint life policy would be
Single Premium - answer Which type of life insurance policy generates immediate cash value An agreement between a ceding insurer an assuming insurer - answer What is reinsurance Size of each installment - answer Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option? Policy Summary - answer What describes the specific information about a policy Creditor requiring that a debtor buys insurance from a certain insurer - answer Which of the following is NOT allowed in credit life insurance Variable Annuity - answer Which of the following products requires a securities license reciprocal - answer Which of the following insurance options would be considered a risk-sharing arrangement Rebates are allowed if it's in the best interest of the client - answer All of the following are true regarding rebates Except SEC Registration - answer To sell variable life insurance policies, an agent must receive all of the following Except Those who have been insured under the plan for at least 5 years - answer Which of the following employees insurance under a group of life plan would be allowed to covert to individual insurance of the same coverage once the is plan is terminated Annually Renewable Term - answer The death protection component of Universal Life Insurance is always Signed waiver of premium - answer Upon policy delivery, the producer may be required to obtain any of the following Except
Money borrowed from the cash value is taxable - answer Which of the following are NOT true regarding policy loans FINRA - answer An agent selling variable annuities must be registered with Universal Life - answer An insured owns a life insurance policy. To 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 of type of policy does this insured most likely have The insured may choose to convert to term or permanent individual coverage. - answer An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT Bail-out - answer Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level? At the time of application - answer When must insurable interest exist in a life insurance policy Regulates consumer reports - answer Federal Fair Credit Reporting Act Paid-Up Additions - answer An 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 benefits. The dividend option that the insured has chosen is called The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days - answer Which of the following is true regarding a waiver of a surrender charge on an annuity contract Yes, but not unfairly - answer Is the insurance company underwriters allowed to discriminate? Pay the policy proceeds only if it would have issued the policy. - answer A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
Inspection Report - answer What type of report provides information about the applicant's hobbies, habits, and financial status? Loss - answer The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what? When the insurer approves a prepaid application - answer In forming an insurance contract, when does an acceptance usually occur? Pure - answer What type of risk is insurable? The agent - answer If an applicant does not receive his or her insurance policy, who would be held responsible? Alien - answer What type of insurer is formed under the laws of another country? Express, Implied and apparent - answer What are the three types of agent authority? Insurer - answer When agents act within the scope of their contract, their actions will be assumed to be the acts of whom? Authorized or Admitted - answer If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer? Agreement (offer and acceptance), consideration, competent parties, and legal purpose - answer What are the four elements of an insurance contract? Moral - answer An applicant conceals relevant health information on the application. The applicant presents what type of hazard? Insurance - answer What do individuals use to transfer their risk of loss to a larger group?
Morale - answer A person who does not lock the doors to his or hers house shows an indifferent attitude. This person presents what type of hazard? Insurance Company - answer Whom does an insurance agent represent? Agent or Producer - answer According to the Law of Agency, a principal is represented by whom? Domestic, foreign, and alien - answer Insurers are classified according to their domicile. What are the 3 types of insurers? Restriction of coverage, refusal to accept a risk, and accepting a risk at a higher rate - answer What are the strategies used by underwriters to prevent adverse selection? When the policy is delivered and the premium is paid - answer When does an insurance policy go into effect? Loss - answer Insurance is a contract that protects the insured from what? Speculative - answer Wagering on a sporting event is known as what type of risk? Fiduciary - answer The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility? Insurable interest and consent - answer What two elements are necessary for a life insurance contract to have a legal purpose? Foreign - answer An insurance company is domiciled in California and transacts insurance in Nevada. What is this insurer's classification in Nevada? Insurer - answer In the agent/insurer relationship, who is considered the principal?
Stock Company - answer The insurer organized to return a profit to the stockholders is what type of insurer? Physical, moral and morale - answer What are three types of Hazards? An absolutely true statement upon which the validity of the insurance policy depends. - answer What is a warranty in an insurance contract? A level premium for the life of the insured - answer What type of premium is charged on a straight life policy? To prevent the policy from lapsing - answer What is the purpose of establishing the target premium for a universal life policy? 20 year level term - answer A policy states that it will pay a specified face amount if the insured dies during the 20 year premium-paying period and nothing if death occurs after the 20 year period. What type of policy is this? Face Amount - answer What policy component must decrease in decreasing term insurance? Group Policy - answer What type of policy is typically without proof of insurability from the insured Option A - answer What universal life option has a gradually increasing cash value and a level death benefit? The insured's attained age - answer In annually renewable term policies, what is the annual premium based upon The amount and payment period of the premium, the face amount, and the period for protection - answer What elements of an adjustable life policy can be changed by the policyowners?
Face Amount - answer What does level refer to in level insurance? Group Policy - answer What type of policy issues certificates of insurance to the insureds? Evidence of insurability - answer When the amount of insurance is increased in an adjustable life policy, what will the insurer require from the insured? Limited Pay Whole Life - answer A whole life policy that requires that the policy owner only pays premiums for a specified number of years is known as what kind of policy? Whole Life - answer What type of life insurance policy provides permanent protection? Variable - answer An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have? Cash value is paid to the policyowner - answer What happens to the cash value when a whole life insurance policy matures? Option A - level death benefit, and Option B - increasing death benefit - answer What are the death benefit options in universal life policies? For 20 years or until the insured's death, whichever occurs first. - answer Under a 20 - pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid for what time period? Universal Life - answer Between adjustable life and universal life policies, which one provides more flexibility to the policy owner? Universal Life - answer In what type of life insurance policies can the policy owner skip premium payments without the policy lapse?
The premium increases with each renewal - answer What happens to the premium in an annually renewable term life policy? Annually Renewable Term - answer Group life insurance policies are written as what type of insurance? Age 100 - answer The policy owner of a whole life insurance policy is also the insured. What age must the insured attain in order to receive the policy's face amount? Single Premium Whole Life - answer What type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of insured, endows at the insured's age 100? When the insured reaches age 100 - answer When would a 20-pay whole life policy endow? The employer (also known as the sponsor of the group) - answer Who owns a group life insurance contract? A minor - answer Who is insured under a juvenile life policy? term - answer What type of life insurance policy offers pure death protection? tax deferred - answer Regarding taxation, how does the cash value of a universal life policy accumulate? Evidence of insurability - answer If an employee want to join group insurance coverage outside of the open enrollment period, what would the employee have to provide? Group's purpose, size, financial strength and turnover - answer What are the characteristics of the group that underwriters will consider before issuing a group life policy? Annually Renewable Term - answer The death protection component of a universal life policy is expressed as what of coverage?
Premium Payment Mode - answer What is the major difference between the most common types of whole life policies: Straight life, Limited Payment, and Single Premium? Whole Life - answer i an insured terminates membership in group life insurance, to what type of insurance can the insured convert the coverage? Limited-pay Whole Life - answer What type of life insurance policy is Life Paid-up at Age 65? Cash value and death benefit - answer In variable universal life insurance, to what policy component does the term variable refer? Upon the first death - answer In a joint life policy, when is the death benefit paid? Guaranteed and current - answer Universal life policies have two types of interest rates. What are they? Decreasing Term - answer What type of life insurance is best suited to cover a mortgage? There is no cash value to borrow against - answer Why are policy loans not available on term insurance? Annuitant's estate - answer If there is no name beneficiary for the annuity benefits, to which entity will the benefits be paid? Variable Annuity - answer What type of annuity requires an agent to have a securities license? annuity - answer An individual has a contract that will provide him with a certain amount of income for the rest of his life. However, this is not a life insurance policy. What type of contract does this person have? Straight Life - answer What type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount only for as long as the annuitant lives?
A life insurance license and a securities license - answer What type of license(s) is/are required in order to sell variable annuities? For the life of the annuitant unless he/she dies within the first 15 years of the annuitization period: then the payments will last for 15 years. - answer How long will a life annuity with a 15-year period certain pay? No later than a year from the time of annuity purchase - answer How soon can income payments begin in an immediate annuity? Annuitant - answer Whose life expectancy is taken into consideration in an annuity contract? The number of payments that purchased the annuity - answer What is the difference between a single premium and a flexible premium payment options in a deferred annuity? In times of inflation, the benefit of a fixed annuity will have decreased purchase power - answer What is the disadvantage of owning a fixed annuity, as opposed to variable? current - answer If the current interest rate on an annuity is higher than the guaranteed rate, which rate will the annuity owner receive as part of the annuity payment? No, an annuitant must always be a natural person - answer Can a business or a corporation be an annuitant? Annuitant - answer who recieves income payments from an annuity? Amount of premium - answer In flexible premium payment annuities, the term "flexible " refers to what To provide income that the annuitant cannot outlive - answer What is the main reason for purchasing an annuity?
Equity Indexed Annuity - answer What type of annuity credits its interest-based upon an index such as S&P 500? Annuitization Period - answer In an annuity, the accumulated money is converted into a stream of income during which phase? Accumulation and annuitization for pay in and pay out - answer What are the two phases of an annuity? Either the amount paid into the annuity or the cash value, whichever is greater - answer If the annuitant dies before the annuitization period starts, what will the beneficiary receive? No sooner than a 1 year after the annuity purchase - answer With a single premium deferred annuity, when will the annuity payments become available? Single life and multiple life annuities - answer how are annuities classified depending on how many lives they cover? Life income with period certain - answer What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and also guarantees payment for a specified number of years? beneficiary - answer If the annuitant dies during the accumulation period, who will receive the annuity benefits? A modified endowment contract (MEC) - answer What is the name for an overfunded life insurance policy? No, lump-sum benefits are received tax free - answer Is the death benefit of a life insurance policy taxed to the beneficiary if it's received as a lump sum Cash value growth is tax deferred - answer according to the taxation rules of life insurance policies, how are cash value increases taxed?
warranty - answer Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract Law of Large Numbers - answer Which law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated? The broker - answer In the transaction of insurance, which of the following is considered to be representing the client? Signed waiver of premium - answer Upon policy delivery, the producer may be required to obtain any of the following EXCEPT The recommended amount to keep the policy in force throughout it's lifetime - answer Which of the following best defines target premium in a universal life policy? Misdemeanor - answer Conducting insurance in this state without a license would be considered a Equal to the original policy for as long as the cash value will purchase - answer When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? Grace Period - answer The automatic premium loan provision is activated at the end of the illegal - answer An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice No later than 5 years from now - answer The director has just finished examining a domestic insurer. When is the Director next required to examine the same insurer? The insurer does not have a Certificate of Authority in any other state - answer Before granting a Certificate of Authority to a company, the Director must be satisfied by proper evidence that all of the following are true EXCEPT
Surrendering the annuity for cash - answer What type of annuity activity will cause immediate taxation of the interest earned? To provide a guaranteed income for a certain amount of time - answer What is the purpose of a fixed- period settlement option? The payments will stop when the annuitant dies. - answer All of the following statements are true regarding installments for a fixed amount EXCEPT SEC Registration - answer To sell variable life insurance policies, an agent must receive all of the following EXCEPT The employees receive individual policies - answer Which of the following is Incorrect concerning a noncontributory group plan? Exchange of unequal values - answer Which of the following best describes the aleatory nature of an insurance contract? She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan. - answer An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy? 30 days - answer When a producer's appointment is canceled by the company, the Department of insurance must be notified within $100 - answer Anyone who willfully violates a cease and desist order can be fined what maximum amount per day? Reinsurance - answer What method do insurers use to protect themselves against catastrophic losses? The examined insurer - answer Who is responsible for covering the expenses associated with the examination of domestic insurers?
