Primerica Licensing Course Exam Questions And Answers Rated A+

The commissioner is required to examine every domestic insurer and every licensed rate service organization every _________ - 5 years In addition to any other forfeiture imposed, any person who violates an effective order may be required to pay ______________ - twice the amount of any profit gained from the violation General duties and powers of the insurance commissioner: The maximum penalty the may be assessed to a person for a willful violation of the insurance code of this state is _________ - 10,000 Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as Rebating Misleading advertising defamation coercion - Coercion Which of the following statements is incorrect: Misrepresenting the true nature or facts of a policy or its benefit in order to induce a policy holder to surrender one policy and replace it with another is illegal It is illegal to be involved in any activity of boycott, coercion, or intimidation that is intended to restrict fair trade or to create a monopoly discrimination in rates, premiums, policy befits, etc, for persons within the same class or with the same life expectancy is illegal replacing insurance policies for the purpose of making commissions is legal - replacing insurance policies for the purpose of making commissions is legal The commissioner issues an order without having conducted a hearing. Within how many days of recieving the order can the person aggrieved by the order request a trial? 90 15 30 60 - 30 The commissioner is required to examine every domestic insurer and every licensed rate service organization every 1 year 2 years 3 years 5 years - 5 years Within how many days of the original hearing and final issuance of an order (regarding an order issued by the commissioner) may an aggrieved person request a re-hearing 0 10 20 30 - 20 According to the fair credit reporting act, all of the following would be considered negative information about a consumer except tax delinquencies late payments failure to pay off a loan disputes regarding consumer report information - disputes regarding consumer report information An insurance policy is considered a "new policy" if it has been in effective for what maximum time period? 10 days 30 days 60 days 90 days - 60 days Which of the following is an intermediary who acts on behalf of the insurer? Insurance agent managing genreal representative managing general intermediary insurance broker - insurance agent Circulating deceptive sales material to the public is what type of unfair trade practice? coercion misrepresentation false advertising defamation - False advertising If reasonably possible, a notice of proof of loss claim must be provided to the insurer within what period of time after the time required by the policy? 3 months 6 months 9 months 12 months - 12 months The commissioner may issue a temporary license for an intermediary for a period of up to 24 months 3 months 6 months 12 months - 12 months If a person does not comply with an order issued within 2 weeks after the commissioner has given notice, for each day that the violation continues, the commissioner may issue a fine up to 5000 1,500 2000 Which of the following authorities decides whether a persons license should be revoked? Federal court system State court system commissioner Department of insurance - Commissioner According to the rule of readability of insurance policies in this state, what is the required minimum score on the Flesch Reading ease test for medicare supplement policies? 30 40 50 60 - 50 All of the following are correct regarding temporary Licenses EXCEPT: The commissioner may revoke temporary licenses if it is in the publics best interest Examinations are never required for the issuance of a temporary license They are granted to representatives of licensed intermediaries who cannot currently transact business the commissioner may limit the authority of a temporary license - Examinations are never required for the issuance of a temporary license How is the commissioner of insurance placed in office? through bid process an election at the same time that other state officials are elected an appointment by the governor by NAIC nomination - An appointment by the governor Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? Consumer Privacy act the fair credit reporting act the unfair trade policies law the guaranty Association - the fair credit reporting act Which of the following may not be included in an insurance company's advertisement? the policies' limitations or exclusions the name of a specific agent an identification of a limited policy as a limited policy that its policies are covered by state insurance security fund - that its policies are covered by state insurance security fund An intermediary holding a Wisconsin insurance license in any major line of insurance must complete how many credit hours of continuing education every 2 years? 12 20 22 24 - 24 All of the following would be considered rebate except: An agent offers the use of his lake house to a Client as an inducement to buy an insurance policy form him an agent offers to share his commission with a policy holder an agent offers tickets to a baseball game as an inducement to buy insurance an agent misrepresents policy benefits to convince a policy owner to replace policies - an agent misrepresents policy benefits to convince a policy owner to replace policies Which of the following statements is not true concerning insurable interest as it applies to life insurance An individual has an insurable interest in his or her own life a debtor has an insurable interest in the life of a lender business partners have an insurable interest in each other a husband or wife has an insurable interest in their spouse - a debtor has an insurable interest in the life of a lender 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: the type of policy requested which individual will pay the premium whether an insurable interest exists between the individuals the gender of the applicant - whether an insurable interest exists between the individuals Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? term permanent universal any form of life insurance - Any form Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? premiums are tax deductible as a business expense premiums are taxable to the employee premiums are not tax deductible as a business expense premiums are tax deductible by the key employee - premiums are not tax deductible as a business expense Who is the owner and who is the beneficiary on a key person life insurance policy the employer is the owner and beneficiary the employer is the owner and the key employee is the beneficiary the key employee is the owner and beneficiary the key employee is the owner and the employer is the beneficiary - the employer is the owner and beneficiary A key person insurance policy can pay for which of the following? Loss of personal income workers comp hospital bills of the key employee costs of training a replacement - costs of training a replacement When is the earliest a policy may go into effect? when the application is signed and a check is given to the agent when the first premium is paid and the policy has been delivered when the insurer approves the application after the underwriter reviews the policy - when the application is signed and a check is given to the agent A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will: Not pay the policy proceeds under any circumstances automatically pay the policy proceeds pay the policy proceeds only if it would have issued the policy pay the policy proceeds up to an established limit - pay the policy proceeds only if it would have issued the policy Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a premium receipt statement of good health backdated receipt warranty - premium receipt During the underwriting process and insurer obtains personal information about an applicant from the applicant, when must the insurer provide notice of its information practices? never since the information was obtained from the applicant at the time of application at the tine the insurer first collects the information at the time of policy delivery - at the time of the policy delivery When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by the agent a physician of the applicants choice and at his expense a home office underwriter a paramedic examining physician at the insurers expense - a paramedic examining physician at the insurers expense An insurer receives a report regarding a potential insured that includes the insured financial status, hobbies and habits. What type of a report is that? medical information bureau's report agents report underwriters report inspection report - inspection report Which is the primary source of information used for insurance underwriting private investigations application application interviews medical records - application An applicant signs an application for a 25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day which of the following is true? the death claim will be rejected the application will be voided the beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy the premium would be returned to the insured's estate because the policy was not issued - the beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy When Y applied for insurance and paid the full premium on august 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard .Y was killed in an automobile accident on august 22, before the policy was issued. In this case, the insurance company will return the premium to Y's estate, since it has no obligation to pay the death claim keep the premium and reject risk on the basis that the applicant died before the policy could be issued issue the policy anyway and pay the face value to the beneficiary negotiate a reduced settlement with the beneficiary due to the unusual circumstances involved - issue the policy anyway and pay the face value to the beneficiary When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy this is called; key person policy fraternal association aleatory contract executive bonus - executive bonus What must happen when an individual policy or annuity has been personally delivered to the policy owner? a notary public must witness the exchange the policy owner must sign a delivery receipt the policy owner must pay the annual premium in full the producer must go over the policy with the policy owner - the policy owner must sign a delivery receipt Which of the following is an example of liquidity in a life insurance contract? the money in a savings account the cash value available to the policy owner the death benefit paid to the beneficiary the flexible premium - the cash value available to the policy owner if someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should that person buy? Modified endowment contact term permanent an annuity - permanent Which of the following is usually true of a participating life insurance policy? it pays dividends to policy owners it may be converted to a term life policy it pays dividends to stock holders it assesses premiums against stockholders - it pays dividends to policy owners As a field underwriter, a producer is responsible for all of the following tasks except: issue the policy that is requested help prevent adverse selection solicit business that will fall within the insure's underwriting guidelines obtain appropriate signatures on the application for insurance - issue the policy that is requested A producer agent must do all of the following when delivering a new policy to the insured except: collect any premium due explain the rating procedures if the policy is rated differently than applied for disclose commissions earned from the sale of the policy explain the policy provisions, riders, and exclusions - disclose commissions earned from the sale of the policy An insurer want to obtain information from investigators regarding an applicant for insurance. What must the insurer do in order to legally acquire this information? receive a signed statement form the insured which authorizes the investigation sign a waiver that the information will be kept confidential present the insured with a disclosure authorization notice receive written permission from the Department of insurance - present the insured with a disclosure authorization notice Which of the following would least likely be considered a legitimate need that would be paid by insurance proceeds? debt cancellation day care vacation travel expenses travel expenses for family to come to the funeral - vacation travel expenses Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to the medical history and mortality factors? risk exposure morbidity life expectancy mortality rate - life expectancy All of the following are characteristics of group life insurance EXCEPT: individuals covered under the policy receive a certificate of insurance certificate holders may convert coverage to an individual policy without evidence of insurability premiums are determined by the age, sex and occupation of each individual certificate holder group life insurance is written as a master policy - premiums are determined by the age, sex and occupation of each individual certificate holder In terms of social security, what is the name for the time period after the youngest child of a family turns 16 and before the surviving spouse may state receiving retirement benefits? accumulation period blackout period nonpayment interval benefit reduction - Blackout period Which of the following is not an example of a valid insurable interest? employer in key employees life child parent's lives debtor in the life of the creditor business partners in each others lives - debtor in the life of the creditor Which of the following is not an example of a business use of life insurance? key person workers comp buy-sell funding executive bonuses - In the event the key employee quits or is terminated, what provision allows the policy owner to transfer coverage to the replacement employee, provided the new employee provides evidence of insurability? Change of insured consideration misstatement of age free look - Change of insured A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then ______ IRS has no jurisdiction the benefit is received as taxable income the benefit is received tax free the benefit is subject to the exclusionary rule - the benefit is received tax free Which of the following statements regarding differed compensation funds is incorrect? they can be established by employees they can be made with cash deposits to an annuity the generally provide additional retirement benefits they are usually qualified plans - They are usually qualified plans Which of the following is the best reason to purchase life insurance rather than annuities? the create regular income payments to liquidate a sum of money over a lifetime to create an estate to liquidate a dum of money over a period of years - to create an estate Which of the following individuals must have insurable interest in the insured? Policyowner beneficiary underwriter producer - Policyowner Which of the following is not an example of a valid insurable interest? debtor on the life of the creditor business partners in each others lives employer in key employees life child in parents lives - debtor on the life of the creditor Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources? term whole life annuity variable life - Term In term policies, what happens to the premium throughout the term of the policy? premium always remains level premium gradually increases premium gradually decreases premium fluctuates - premium always remains level What does level refer to in level term insurance? premium cash value interest rate face amount - Face amount A policy will pay the death benefit if the insured dies during the 20 year period. What type of policy is this? limited pay whole life level term term to specified age ordinary life policy - Level term in increasing and decreasing term policies, which policy fluctuated during the policy term? death benefit premium cash value nonforfeiture values - Death benefit Which of the following is INCORRECT regarding a $100,000 20 year level term policy? At the end of the 20 years, the policy's cash value will equal $100,000 the policy premiums will remain level for 20 years if the insured dies before the policy expired, the beneficiary will receive 100,000 the policy will expire at the end of the 20 year period - At the end of the 20 years, the policy's cash value will equal $100,000 Which of the following terms best describes the coverage provided by term policies, as compared to any other form of protection? longest greatest least most comprehensive - greatest An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it? Adjustable life graded premium life limited pay life variable life - Limited pay life 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 at least 20 years until the policy owners age 100, when the policy matures for 20 years or until the death, whichever occurs first until the policy owner reaches age 65 - for 20 years or until the death, whichever occurs first What characteristic makes whole life permanent protection? guaranteed death benefit guaranteed level premium living benefits coverage until death or age 100 - coverage until death or age 100 When would a 20-pay whole life policy endow? in 20 years when the insured reaches age 100 at the insured's age 65 after 20 payments - when the insured reaches age 100 Which of the following statements is correct regarding a whole life policy? the death benefit may increase or decrease during the policy period the policy owner is entitled to policy loans cash values are not guaranteed the policy premium is based on the attained age - the policy owner is entitled to policy loans What is the purpose of establishing a target premium for a universal life policy? to keep the policy in force to accumulate cash value faster to pay up the policy faster to cover all policy expenses - to keep the policy in force All of the following are true about variable products except: the premiums are invested in the insurers general account the minimum death benefit is guaranteed the cash value is not guaranteed policy owners bear the investment risk - the premiums are invested in the insurers general account What are two components of a universal policy? insurance and cash account insurance and investments mortality cost and interest separate account policy loans - insurance and cash account For variable products, underlying assets must be kept in a general account a separate account a revenue account a money market account - a separate account Which of the following is a key distinction between variable whole life and variable universal life products? variable universal life has a fixed premium variable whole life has a guaranteed death benefit variable universal life is regulated solely through FINRA variable whole life allows policy loans from the cash value - variable whole life has a guaranteed death benefit If an agent wishes to sell variable life policies, what license must the agent obtain? personal lines securities adjuster surplus lines - Securities Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit? Variable universal life universal life Option A Universal life option B equity indexed universal life - universal life option A All the following entities regulate life policies except: federal government the SEC the insurance department guaranty association - guaranty association If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this? modified life insurance single premium policy jumping juvenile policy limited pay whole life policy - jumping juvenile policy IF the owner of a whole life policy who is also insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary? 50% of the death benefit the face amount minus the premiums that would have been collected until the insured reached age 100 a full death benefit a death benefit equal to the cash value of the policy - a full death benefit In an adjustable life policy all of the following can be changed by the policy owner except: the length of coverage the premium the amount of insurance the type of investment - the type of investment Which of the following best defines target premium in a universal life policy? the maximum amount the policyowner may pay on a policy the minimum amount to make sure the policy is annually renewable the corridor of insurance the recommended amount to keep the policy in force throughout its lifetime - the recommended amount to keep the policy in force throughout its lifetime Which of the following in not type of whole life insurance? limited payment level term single premium straight life - level term Which of the following has the right to convert the existing term coverage to permanent insurance? Producer Policyowner Insurer Beneficiary - Policyowner The least expensive first year premium is found is which of the following policies? Annually renewable term Increasing term decreasing term level term - Annually Renewable Term Which component increases in the increasing term insurance? death benefit cash value interest on the proceeds premium - death benefit The policy owner of a universal life policy may skip paying the premium and the policy will not laps as long as: the policy owner cannot skip premiums without the policy lapsing the next months premium is sufficient to cover both the current premium amount and the skipped amount the policy contains sufficient cash value to cover the cost of insurance the previous premium payments were high enough to create an excess premium - the policy contains sufficient cash value to cover the cost of insurance Which of the following types of policies allows for a flexible premium and a variable investment component? variable universal life insurance guaranteed issue variable life insurance variable whole life insurance whole life insurance - variable universal life insurance The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? The death benefit can be increased only by exchanging the existing policy for a new one the death benefit can be increase by providing evidence of insurability the death benefit cannot be increased the death benefit can be increased only when the policy has developed a cash value - the death benefit can be increase by providing evidence of insurability Which of the following types of policies will provide permanent protection credit life term life group life whole life - whole life Which of the following policies would be classified as a traditional level premium contract? universal life variable universal life straight life adjustable life - straight life When an employee terminates coverage under a group insurance policy, coverage continues in force for 60 days until the employee can obtain coverage under a new group plan until the employee notifies the group insurance provider that coverage conversion policy is issued for 31 days - for 31 days An insured purchased a variable life insurance policy with a face amount of 50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out? 10,000 40,000 50,000 60,000 - The death protection component of universal life insurance is always decreasing term annually renewable term whole life adjustable life - annually renewable term An insurance policy that requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured age 100 is called single premium whole life modified endowment contract level term life graded premium whole life - single premium whole life Which policy component decreases in decreasing term insurance? cash value dividend premium face amount - Face amount The death benefit under the universal life option B gradually increases each year by the amount that the cash value increases decreases by the amount that the cash value increases increases for the first few years of the policy, and then levels off remains level - gradually increases each year by the amount that the cash value increases According to the entire contract provision, a policy must contain a copy of the original application for insurance a declaration's page with a summary of insureds a buyers guide to life insurance listing of the insureds former insurer(s) for incontestability provisions - a copy of the original application for insurance An absolute assignment is a transfer of all ownership rights in a policy transfer of some ownership rights in a policy change of beneficiary change of insurer - transfer of all ownership rights in a policy According to the entire contract provision, what document must be made part of the insurance policy? outline of coverage copy of the original application buyers guide agents report - copy of the original application the two types of assignments are complete and proportionate absolute and collateral absolute and partial complete and partial - absolute and collateral the ownership provision entitles the policy owner to do all of the following except designate a beneficiary set premium rates receive a policy loan assign the policy - set premium rates Which of the following explains the policy owners right to change beneficiary's, choose options, and receive proceeds of a policy? owners rights the entire contract provision the consideration clause assignments rights - owners rights if the policy owner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights? beneficiary insured policy owner the insured and the policy owner - Policy owner a business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible? modification clause ownership provision collateral assignment insurable interest - collateral assignment Which of the following is true about a policy assignment? it permits the beneficiary to designate the person to receive the benefits it authorizes an agent to modify the policy it transfers rights of ownership from the owner to another person it is the same as a beneficiary designation - it transfers rights of ownership from the owner to another person What is the advantage of reinstating a policy instead of applying for a new one? the original age is used for premium determination proof of insurability is not required the face amount can be increased the cash values have gained interest while the policy was lapsed - the original age is used for premium determination An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this? reinstatement provision waiver of premium provision incontestable clause grace period - reinstatement provision 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 the full death benefit pay nothing; there was a misrepresentation on the application pay the full death benefit and refund excess premium pay a reduced death benefit - pay a reduced death benefit The validity of coverage under a life insurance policy may not be contested except for nonpayment of premiu , after the policy has been in force for at least how many years? 1 2 5 7 - 2 years Which of the follwing statements about a suicide clause in a life insurance policy is true? suicide is excluded as long as the policy is in force suicide is - What type of account will most likely be established for a minor? estate planning trust annuity credit life - trust if a life insurance policy has an irrevocable beneficiary designation, the beneficiary cannot be changed the beneficiary can only be changed with written permission of the beneficiary the beneficiary cannot be changed for at least 2 years the owner can always change the beneficiary at will - the beneficiary can only be changed with written permission of the beneficiary An insured purchased a life insurance policy on his life naming his wife as a primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit? with the primary beneficiary's written consent if the insured died from accidental means if the primary beneficiary predeceased the insured when the insured dies, the primary and contingent beneficiaries share death benefits equally - if the primary beneficiary predeceased the insured All the following are beneficiary designations except tertiary contingent primary specified - specified The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the benefit protection clause incontestability clause beneficiary protection clause spendthrift clause - spendthrift clause Which of the following is true regarding the spendthrift clause in the life insurance policies? it can protect the policy proceeds from the creditors of the beneficiary it allows the beneficiary to select a different settlement option it is only used when the beneficiary is a minor it is the same as irrevocable settlement clause - it can protect the policy proceeds from the creditors of the beneficiary When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to receive payments for a fixed amount purchase a single premium policy for a reduced face amount purchase a term rider to attach to the policy pay back all premiums owed plus interest - purchase a single premium policy for a reduced face amount A father owns a life insurance policy on his 15 year old daughter. The policy contains the optional payor benefit rider. If the father becomes disabled, what will happen to the life insurance premiums? the insured will have to pay the premiums for 6 months. If at the end of his period the father is still disabled, the insured will be refunded the premiums the insured's premium will be waived until she is 21 the premiums will become tax deductible until the insured's 18th birthday since it is the policy owner, and not the insured, who has become disabled, the life insurance policy will not be affected - the insured's premium will be waived until she is 21 Nonforfeiture values guarantee which of the following for the policy owner? that the death benefit will be paid in a lump sum that the policy premiums will never increase that the cash value will not be lost that the dividends will be paid annually - that the cash value will not be lost What type of insurance would be used for a return of premium rider? annual renewable term increasing term level term decreasing term - increasing term All of the following are nonforfeiture options except reduced paid up interest only cash surrender extended term - interest only The dividend option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the accelerated endowment paid up additions one year term option paid up option - One year term option Which is true about a spouse term rider? the rider is decreasing term insurance coverage is allowed up to age 75 the rider is usually level term insurance coverage is allowed for an unlimited time - the rider is usually level term insurance After a back injury, an insured is disabled for a year. His insurance policy carries a disability income benefit rider. Which of the following benefits will be receive? monthly premium waiver and monthly income percentage of medical costs paid by the insurer payments for life yearly premium waiver and income - monthly premium waiver and monthly income When a life insurance policy was issued, the policy owner designated a primary and contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit? the insured's estate the primary beneficiary's estate the insured's contingent beneficiary the insurance company - the insured's contingent beneficiary An insured pays 1,200 annually for her life insurance premium. The insured applies this years 300 worth of accumulated dividends to the next years premium, thus reducing it to 900. What option does this describe? accumulation at interest cash option flexible premium reduction of premium - reduction of premium Under which of the following circumstances would an insurer pay accelerated benefits? a couple is nearing retirement and needs a steady stream of income an insured is looking for a way to put her daughter through college a couple wants to build a house and would like to make a larger down payment an insured is diagnosed with cancer and needs help paying for her medical bill - an insured is diagnosed with cancer and needs help paying for her medical bill What is the benefit of choosing extended term as a nonforfeiture option it allows for coverage to continue beyond maturity date it can be converted to a fixed annuity it has the highest amount of insurance protection it matures at age 100 - it has the highest amount of insurance protection if a life policy allows the policy maker to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a nonforfeiture option guaranteed insurability rider paid up additions option cost of living provision - guaranteed insurability rider 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? term life limited pay universal life adjustable life - universal life The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disables is called waiver of premium guaranteed insurability waiver of cost of insurance payor benefit - Waiver of premium Which of the following protects the insured for an unintentional policy lapse due to a nonpayment of premium? extended term reinstatement reduced paid up option automatic premium loan - automatic premium loan Which of the following statements is true about a policy assignment? it authorizes an agent to modify the policy it transfers rights of ownership from the owner to another person it is the same as a beneficiary designation it permits the beneficiary to designate the person to receive the benefits - it transfers rights of ownership from the owner to another person During partial withdrawal from a universal life policy, which portion will be taxed? cash value principal loan interest - Interest Which of the following is true regarding a single life settlement option it provides income the beneficiary cannot live without payments continue until the entire principal is exhausted proceeds are paid out in a lump sun it provides income for a specified period of time - it provides income the beneficiary cannot live without Which of the following products provides income for a specified period of years or for life, and protects a person against outliving his or her money? an annuity a survivorship life policy a universal life policy a group policy - An annuity If the annuitant dies during the accumulation period, who will receive the annuity benefits? the beneficiary the annuity owner the insurance company the annuitant's estate - The beneficiary Which of the following is not true regarding the annuitant the annuitant cannot be the same person as the annuity owner the annuitant's life expectancy is taken into consideration for the annuity the annuitant receives the annuity benefit the annuitant must be a natural person - The annuitant cannot be the same person as the annuity owner Annuities differ from life insurance in all of the following ways except they are purchased with premiums there is no stated amount of death benefit they can be used in a qualified retirement plan the annuitant must be living to collect - they are purchased with premiums Jack and Jill are twins. When their grandfather died, he left each of them 100,000, which they used to purchase an annuity. When they retire, since each select the life income option, which will receive the larger monthly annuity payment Because they are the same age, the payments will be the same jacks payment will be larger jills payment will be larger their payments will be based upon their health condition at the time payments begin - Jacks payments will be larger because Which of the following is a feature of a single premium immediate annuity? income payments start within one year it is purchased through periodic payments income payments start at age 65 it is also referred to as a deferred annuity - income payments start within one year All other factors being equal, which of the following individuals would recieve the largest monthly check from a single premium straight life immediate annuity? a 50 year old man a 50 year old woman a 60 year old man a 60 year old woman - a 60 year old man The annuity owner dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following is true? all benefits will be forfeited the cash value will be paid to the estate government the cash value will be paid to the annuitant's estate the premium value will be paid to the annuitant's estate - the cash value will be paid to the annuitant's estate before he died, an annuitant had received 12,500 in monthly benefits from his 25,000 straight life annuity. He was also insured under a 50,000 paid up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits? 50,000 62,500 75,000 nothing - 50,000 Life contingency options - Pure life vs life guaranteed minimum Which of the following best describes a pure life annuity settlement option Pure life provides payments for as long as the annuitant is alive pure life guarantees that all proceeds will be paid out benefits are paid for a fixed period of time specified when the policy begins to pay pure life provides payments for as long as both the annuitant and the spouse are living - Pure life provides payments for as long as the annuitant is alive Under a pure life annuity, an income is payable by the company until the principle and interest are exhausted for a guaranteed period of time, whether or not the annuitant survives to the end of that period for as long as either the annuitant or a named beneficiary is alive only for the life of the annuitant - only for the life of the annuitant Under a straight life annuity, the annuitant dies before the principal amount is paid out, the beneficiary will receive the amount paid into the annuity the remainder of the principal nothing, the payments will cease guaranteed minim benefit - nothing, the payments will cease The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called joint and survivorship joint life annuity life income with period certain life income with refund - life income with period certain Which of the following types of annuities will generally provide the highest monthly income? life with a ten year period certain straight life joint and survivor installment refund - straight life What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitants life and ceases at the annuitants death? Pure life life guaranteed minimum installment refund joint and survivor - Pure life Which of the following is not true regarding the life guaranteed minimum annuity settlement option? the beneficiary receives the remainder of the principal amount upon the annuitants death it is a life contingency option it does not guarantee that the entire principal amount will be paid out - it does not guarantee that the entire principal amount will be paid out Your client is planning to retire. She has accumulated 100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend straight life life income with period certain installment refund join and survivor - straight life If an annuitant selects the straight life annuity settlement option, in order to receive all of the money out of the contract, it would be necessary to name a beneficiary name another annuitant live at lease to his life expectancy die before his life expectancy - live at lease to his life expectancy Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long the will pay benefits? fixed period fixed amount variable period variable amount - Fixed amount