NY Life Insurance Exam Review Questions and
Answers
Based on the Human Life Value Approach, which of the following is NOT used to calculate an individual's
life value?
A. Insured's annual expenses
B. Effect of inflation on income over time
C. Predicted needs of the family after the insured's death
D. Insured's current and future income - =C. Predicted needs of the family after the insured's death.
The Human Life Value Approach to determining the value of an individual's life requires the calculation
of probable future earnings of the insured, which involves wages, expenses, inflation, amount of time
until retirement, and the time value of money. Predicted needs of the family after the insured's death
are used in the needs approach
Can the Superintendent investigate fraudulent claims if they occurred outside of the resident's state
according to the Insurance Fraud Prevention Act?
A. Yes. The Superintendent has the power to make an investigation within this state or outside of the
state
B. Yes, but only if it is a violation of another state's insurance law
C. No. Because insurance is regulated by the state, all claims must occur within state boundaries
D. No. If fraudulent acts are believed to have been committed, the Superintendent must notify the
state's Superintendent or Commissioner. It will then become a federal matter - =A. Yes. The
Superintendent has the power to make an investigation within this state or outside of the state
If the insurance frauds bureau has reason to believe that a person is engaged or is about to engage in a
fraudulent act, the Superintendent has the power to make an investigation within this state or outside
the state
Which settlement option allows the insurer to retain the face amount but pay some income based on
gain on the proceeds to the beneficiary at regular intervals?
A. Interest only
B. Life income
C. Fixed amount
D. Fixed period - =A. Interest only
,Within the "interest only" option, the insurer retains policy proceeds and pays interest on the proceeds
to the beneficiary at regular intervals. The insurer will usually guarantee an interest rate and even pay in
excess of the rate quoted
In order to be a licensed life settlement broker, a person must complete which of the following
requirements?
A. Post a surety bond
B. Submit to a drug test
C. Submit fingerprints
D. Have been a licensed life producer for at least 6 months - =C. Submit fingerprints
How long does a licensee have to notify the Superintendent of a change of address?
A. 90 days
B. Immediately
C. 30 days
D. 60 days - =C. 30 days
The Superintendent must be notified within 30 days upon any of a change of primary residence or
business address
Which of the following would be deducted from the death benefit paid to a beneficiary, if a partial
accelerated death benefit had been paid while the insured was still alive?
A. Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest
income from the accelerated benefit
B. There are no deductions taken from death benefits
C. Penalty imposed for early withdrawal of the death benefit, plus the amount of earnings lost by the
insurance company in interest income
C. 10% federal death benefit income tax, plus the amount of the accelerated benefit - =A. Amount paid
with the accelerated benefit, plus the earnings lost by the insurance company in interest income from
the accelerated benefit
If an insured withdraws a portion of the death benefit by the use of this rider, the benefit payable at
death will be reduced by that amount, plus the amount of earnings lost by the insurance company in
interest income
, Which of the following statements concerning a Simplified Employee Pension plan (SEP) in INCORRECT?
A. SEPs allow the employer to make annual tax deductible contributions up to 25% of an employee's
earned income
B. SEPs have a higher tax deductible contribution limit than an IRA
C. Employer contributions are not included int he employee's gross income
D. SEPs are suitable for large companies - =D. SEPs are suitable for large companies
An employee is joining a group insurance plan. In order to avoid having to prove insurability, what must
the employee do?
A. Join during the open enrollment period
B. Provide medical records to the insurer
C. Sign a statement of contributed good health
D. Nothing: proof of insurability is never required in group policies - =A. Join during the open enrollment
period
If one applies for coverage after the open enrollment period, proof of insurability may be required in
order to avoid adverse selection
Which of the following best describes the MIB?
A. It is a nonprofit organization that maintains underwriting information on applicants for life and health
insurance
B. it is a government agency that collects
C. It is a member organization that protects insured against insolvent insurers
D. It is a ranking organization for health insurance - =A. It is a nonprofit organization that maintains
underwriting information on applicants for life and health insurance
The Medical Information Bureau (MIB) is a nonprofit trade organization which receives adverse medical
information from the insurance companies and maintains confidential medical impairment information
on individuals
A lucky individual won the state lottery, so the state will be sending him a check each month for the next
25 years. What type of annuity products are they likely to use to provide these benefits?
A. Variable annuity
B. Flexible payment annuity
Answers
Based on the Human Life Value Approach, which of the following is NOT used to calculate an individual's
life value?
A. Insured's annual expenses
B. Effect of inflation on income over time
C. Predicted needs of the family after the insured's death
D. Insured's current and future income - =C. Predicted needs of the family after the insured's death.
The Human Life Value Approach to determining the value of an individual's life requires the calculation
of probable future earnings of the insured, which involves wages, expenses, inflation, amount of time
until retirement, and the time value of money. Predicted needs of the family after the insured's death
are used in the needs approach
Can the Superintendent investigate fraudulent claims if they occurred outside of the resident's state
according to the Insurance Fraud Prevention Act?
A. Yes. The Superintendent has the power to make an investigation within this state or outside of the
state
B. Yes, but only if it is a violation of another state's insurance law
C. No. Because insurance is regulated by the state, all claims must occur within state boundaries
D. No. If fraudulent acts are believed to have been committed, the Superintendent must notify the
state's Superintendent or Commissioner. It will then become a federal matter - =A. Yes. The
Superintendent has the power to make an investigation within this state or outside of the state
If the insurance frauds bureau has reason to believe that a person is engaged or is about to engage in a
fraudulent act, the Superintendent has the power to make an investigation within this state or outside
the state
Which settlement option allows the insurer to retain the face amount but pay some income based on
gain on the proceeds to the beneficiary at regular intervals?
A. Interest only
B. Life income
C. Fixed amount
D. Fixed period - =A. Interest only
,Within the "interest only" option, the insurer retains policy proceeds and pays interest on the proceeds
to the beneficiary at regular intervals. The insurer will usually guarantee an interest rate and even pay in
excess of the rate quoted
In order to be a licensed life settlement broker, a person must complete which of the following
requirements?
A. Post a surety bond
B. Submit to a drug test
C. Submit fingerprints
D. Have been a licensed life producer for at least 6 months - =C. Submit fingerprints
How long does a licensee have to notify the Superintendent of a change of address?
A. 90 days
B. Immediately
C. 30 days
D. 60 days - =C. 30 days
The Superintendent must be notified within 30 days upon any of a change of primary residence or
business address
Which of the following would be deducted from the death benefit paid to a beneficiary, if a partial
accelerated death benefit had been paid while the insured was still alive?
A. Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest
income from the accelerated benefit
B. There are no deductions taken from death benefits
C. Penalty imposed for early withdrawal of the death benefit, plus the amount of earnings lost by the
insurance company in interest income
C. 10% federal death benefit income tax, plus the amount of the accelerated benefit - =A. Amount paid
with the accelerated benefit, plus the earnings lost by the insurance company in interest income from
the accelerated benefit
If an insured withdraws a portion of the death benefit by the use of this rider, the benefit payable at
death will be reduced by that amount, plus the amount of earnings lost by the insurance company in
interest income
, Which of the following statements concerning a Simplified Employee Pension plan (SEP) in INCORRECT?
A. SEPs allow the employer to make annual tax deductible contributions up to 25% of an employee's
earned income
B. SEPs have a higher tax deductible contribution limit than an IRA
C. Employer contributions are not included int he employee's gross income
D. SEPs are suitable for large companies - =D. SEPs are suitable for large companies
An employee is joining a group insurance plan. In order to avoid having to prove insurability, what must
the employee do?
A. Join during the open enrollment period
B. Provide medical records to the insurer
C. Sign a statement of contributed good health
D. Nothing: proof of insurability is never required in group policies - =A. Join during the open enrollment
period
If one applies for coverage after the open enrollment period, proof of insurability may be required in
order to avoid adverse selection
Which of the following best describes the MIB?
A. It is a nonprofit organization that maintains underwriting information on applicants for life and health
insurance
B. it is a government agency that collects
C. It is a member organization that protects insured against insolvent insurers
D. It is a ranking organization for health insurance - =A. It is a nonprofit organization that maintains
underwriting information on applicants for life and health insurance
The Medical Information Bureau (MIB) is a nonprofit trade organization which receives adverse medical
information from the insurance companies and maintains confidential medical impairment information
on individuals
A lucky individual won the state lottery, so the state will be sending him a check each month for the next
25 years. What type of annuity products are they likely to use to provide these benefits?
A. Variable annuity
B. Flexible payment annuity
