Final Exam- Louisiana Life Only- Pre-licensing course Final Exam 100% Complete Answers!!!

Which of the following is considered to be an alternative to a life settlement? - ANS Accelerated death benefit rider What is created after policy proceeds are obtained in a lump sum and then immediately invested? - ANS Estate Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. His insurance agent told him the policy would be paid up if he reached age 100. The present cash value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be - ANS $500,000(In this situation, the death benefit would be the $500,000 face amount.) Fixed annuities provide each of the following (guaranteed interest, retirement funds, hedge against inflation, and tax advantage) EXCEPT: - ANS Hedge against inflation (Fixed annuities do NOT provide for a hedge against inflation) What is an insurance policy's grace period? - ANS Period of time AFTER the premium is due but the policy remains in force(The grace period is a period of time AFTER the premium is due but the policy remains in force.) Within how many days must a Traditional IRA be rolled over to another IRA in order to avoid tax consequences? - ANS 60 days (To avoid tax consequences, a rollover from a Traditional IRA to another IRA must be done within 60 days. A distribution received from a Traditional IRA is eligible for a tax-free rollover if it is reinvested in another IRA within 60 days following receipt of the distribution and if the plan participant does NOT actually take physical receipt of the distribution) A life insurance policyowner was injured in an automobile accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability? - ANS Disability income rider (the rider which pays a life insurance policyowner a monthly amount in the event of total and permanent disability is called a disability income rider) An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? - ANS Grace period (the amount of time an insurer continues coverage in full force and will accept the premium from the insured as though it was NOT late) An annuitant is guaranteed to NOT outlive their benefits will a(n) - ANS Guaranteed lifetime withdrawal benefit (A guaranteed lifetime withdrawal benefit (GLWB) is a rider on a variable annuity that allows min withdrawals from the invested amount without having to annuitize the investment. This rider guarantees that a certain percentage (often based on age) of the amount invested can be withdrawn each year for as long as the contract holder lives. a producer must notify the commissioner within ___ days of a felony conviction. - ANS 30 (a producer has 30 days to report the administrative action to the commissioner) a policyowner who anticipates death or develops a life-threatening condition may obtain proceeds from a life insurance contract. These proceeds are known as - ANS Accelerated benefits (Proceeds payable to a policyowner under a life insurance contract in anticipation of death or upon the occurence of specified life-threatening conditions as defined by the policy are best described as accelerated benefits) what happens when an insurance policy is backdated? - ANS The policy's effective date is earlier than the present (Backdating makes the policy effective on an earlier date than the present) Variable life insurance and Universal life insurance are very similar. Which of these feature are held exclusively by variable universal life insurance? - ANS Policyowner has the right to select the investment which will provide the greatest return (The right to select the investment which will provide the greatest return pertains only to variable universal life insurance) maria the producer would like to advertise an annuity product on a highway billboard. Which of the following must be included in the advertisement? - ANS Her name (In this situation, the advertisement must contain the name of the producer) Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose? - ANS Guaranteed lifetime withdrawal benefit. (The guaranteed lifetime withdrawal benefit normally requires a fee, but it ensures that the income benefit will be paid for life without actually annuitizing the contract If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies? - ANS A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age an insurer has ___ days to file a notice of appointment to the commissioner. - ANS 15 The required grace period for a life insurance policy sold in louisiana is ___ days. - ANS 30 The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid - ANS minus indebtedness and without interest(The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid minus indebtedness and without interest.) What is the name of the provision which states that a copy of the application must be attached to the policy when issued? - ANS Entire Contract A professional liability for which producers can be sued for mistakes of putting a policy into effect is called - ANS errors and omissions A life insurance policy that has premiums fully paid up within a stated time period is called - ANS limited payment insurance (Limited payment insurance is characterized by premiums that are fully paid up within a stated period, after which no further premiums are required.) Life insurance policies will normally pay for losses arising from - ANS commercial aviation (Life insurance policies routinely cover losses arising from commercial aviation.) Which of these is considered to be a document that describes the critical segments of a life insurance policy? - ANS Policy summary (document that specifies the critical segments of an insured's life insurance policy) What does the word "level" in the Level Term describe? - ANS the face amount ("Level" in level term refers to the face amount.) Decreasing term life insurance is often used to - ANS provide coverage for a home mortgage (A common use for decreasing term life insurance is to cover a home mortgage.) How does one qualify as a fully-insured individual under Social Security disability coverage? - ANS Individual has been credited with the appropriate number of quarters of coverage(Under Social Security disability coverage, a fully-insured individual is one who has been credited with the appropriate number of quarters of coverage. When the principal gives the agent authority in writing, it's referred to as - ANS express authority Which of these (cash surrender; extended term insurance; reduced paid-up insurance; life income annuity) is NOT considered to be a common life insurance nonforfeiture option? - ANS life income annuity Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? - ANS 4,000 (Ron may increase the face value of his policy by $4,000. $100,000 X .04 = $4,000 Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE? (Net death benefit will be reduced if the loan is not repaid; No interest will be charged on loan balance; Term life policies are the only type of insurance that allows policy loans; A loan can be taken out for up to the face amount of the policy) - ANS Net death benefit will be reduced if the loan is not repaid (If the loan is NOT repaid, the net death benefit will be reduced by the outstanding loan balance) when a producer is replacing an existing ordinary life insurance policy, the producer must take all of the following actions except - ANS Obtain the beneficiary's signature (All of the other actions are required when a producer is replacing an existing ordinary life insurance policy-actions such as: provide the applicant with a copy of the sales proposal, submit to the producer's insurance company a copy of the signed notice regarding replacement, and providing the applicant with a notice regarding replacement)