Exam FX Insurance- Wisconsin Life questions (Answered). 100% Accurate, Graded A

Exam FX Insurance- Wisconsin Life questions (Answered). 100% Accurate, Graded A An insurer decides to renew a policy but at a higher premium rate, starting on the renewal date. How many days in advance must the insured be notified? a) 30 b) 60 c) 90 d) 100 - -b How is the Commissioner of Insurance placed in office? a)By NAIC nomination b)Through a bid process c)An election at the same time that other state officials are selected d)An appointment by the Governor - -d An insurance producer who by contract is bound to write insurance for only one company is classified as a/an a)Captive agent. b)Solicitor. c)Broker. d)Independent producer. - -a Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? a)3 days b)5 days c)10 days d)14 days - -a Which of the following is NOT a characteristic of an insurable risk? a)The loss exposure must be large. b)The loss must be catastrophic. c)The loss must be due to chance. d)The loss must be measurable. - -b Which of the following is an example of a producer's fiduciary responsibilities? a)Promptly forwarding premiums to the insurance company b)Helping clients to file claims c)Doing a review of his/her client's coverage d)Offering additional coverage to his client - -a An individual's tendency to be dishonest would be indicative of a a)Moral hazard. b)Morale hazard. c)Pure hazard. d)Physical hazard. - -a In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? a)They provide additional information from an outside source about a particular risk. b)They provide information about a customer's character and reputation. c)The customer has no knowledge of this action. d)The customer's associates, friends, and neighbors provide the report's data. - -d The maximum civil penalty that may be assessed to a person for a willful violation of the Insurance Code of this state is a)$5,000. b)$10,000. c)$50,000. d)$100,000. - -a Which of the following is true regarding state regulations for record maintenance? a)Any records except for checks may be maintained electronically. b)Insurer's records must be maintained both electronically and in paper form. c)Insurer's records may be maintained electronically. d)Insurer's records must be maintained as hard copies of original records. - -c What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? a)Revocation of license b)$2,500 c)$1,000 d)$100 per violation - -b The Commissioner conducts an examination of a domestic insurer and believes that the costs of examination places an unreasonable financial burden on the insurer. Which of the following will happen? a)The federal government will absorb the full cost. b)The federal government will absorb part of the cost, and the state government will absorb the rest of the cost. c)The costs will be reduced to the amount that the examinee can reasonably pay; the rest will be paid by the federal government. d)The Commissioner's office may pay all or part of the costs. - -d An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act? a)Fraud b)Defamation c)Unfair discrimination d)Errors and omissions - -a The authority granted to an agent through the agent's contract is referred to as a)Express authority. b)Apparent authority. c)Implied authority. d)Absolute authority. - -a 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? a)0 b)10 c)20 d)30 - -c An insurer terminates an agent's appointment. Within how many days of termination must the intermediary be notified? a)15 b)20 c)30 d)10 - -a When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? a)Consideration b)Legal purpose c)Contract of adhesion d)Acceptance - -a All of the following benefits are available under Social Security EXCEPT a)Death benefits. b)Welfare benefits. c)Old-age and retirement benefits. d)Disability benefits. - -b What is the maximum life insurance coverage available to the state residents through the Wisconsin State Life Insurance Fund? a)$10,000 b)$50,000 c)$100,000 d)The amount of coverage is unlimited. - -a The minimum number of credits required for partially insured status for Social Security disability benefits is a)4 credits. b)6 credits. c)10 credits. d)40 credits. - -b hich of the following is NOT fundable by annuities? a)Death benefits b)Cash accumulation for any reason c)A person's retirement d)Estate liquidation - -a An agent selling variable annuities must be registered with a)The Guaranty Association. b)SEC. c)FINRA. d)Department of Insurance. - -c In the Executive Bonus plan, who is the owner of the policy, and who pays the premium? a)Company is the owner, but the executive pays the premium. b)Board of directors is the owner, and the board of directors pays the premium. c)Company is the owner, and the company pays the premium. d)Executive is the owner, and the executive pays the premium. - -d Which nonforfeiture option provides coverage for the longest period of time? a)Paid-up option b)Accumulated at interest c)Reduced paid-up d)Extended term - -c Which type of life insurance policy generates immediate cash value? a)Decreasing Term b)Continuous Premium c)Single Premium d)Level Term - -c A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as a)Juvenile protection provision. b)Survivor protection. c)Life planning. d)Survivorship insurance. - -b A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true? a)No taxes are due since the plan participant is over age 59 1/2. b)There is a 10% early withdrawal penalty. c)The amount distributed is subject to ordinary income tax. d)The amount of the distribution is reduced by the amount of a 20% withholding tax. - -d The Interstate Insurance Product Regulation Compact is a contract between a)Member states. b)Commissioners of Insurance in different states. c)Reciprocal states. d)Insurers and insureds. - -a Which of the following are generally NOT considered when underwriting group insurance? a)The nature of the group b)The group's past claim experience c)The size of the group d)The insureds' medical history - -d If the annuitant dies during the accumulation period, who will receive the annuity benefits? a)The annuity owner b)The insurance company c)The annuitant's estate d)The beneficiary - -d If a policy is marketed with an illustration, who must sign the illustration? a)Only the applicant b)The agent and the Commissioner c)The applicant and the agent d)Only the agent - -c All of the following would be different between qualified and nonqualified retirement plans EXCEPT a)IRS approval requirements b)Taxation on accumulation c)Taxation of withdrawals d)Taxation of contributions - -b Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client? a)Limited pay whole life b)Interest-sensitive whole life c)Life annuity with period certain d)Increasing term - -a Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? a)Waiver of Premium b)Payor Benefit c)Jumping Juvenile d)Juvenile Premium Provision - -b 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? a)The cash value will be paid to the state government. b)The cash value will be paid to the annuitant's estate. c)The premium value will be paid to the annuitant's estate. d)All benefits will be forfeited. - -b Which of the following policies would be classified as a traditional level premium contract? a)Adjustable Life b)Universal Life c)Variable Universal Life d)Straight Life - -d If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select? a)Fixed period b)Life with period certain c)Fixed amount d)Interest only - -a Which Universal Life option has a gradually increasing cash value and a level death benefit? a)Option A b)Juvenile life c)Term insurance d)Option B - -a The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE? a)The owner's estate will receive the money paid into the annuity. b)The insurance company will retain the cash value and pay back the premiums to the owner's estate. c)The money will continue to grow tax-deferred until the liquidation period, and then will be paid to the beneficiary. d)The beneficiary will receive the greater of the money paid into the annuity or the cash value. - -d How long must a life insurance policy be in force before the owner can enter into a viatical settlement contract? a)90 days b)6 months c)1 year d)2 years - -d Who can make a fully deductible contribution to a traditional IRA? a)Someone making contributions to an educational IRA b)A person whose contributions are funded by a return on investment c)An individual not covered by an employer-sponsored plan who has earned income d)Anybody; all IRA contributions are fully deductible regardless of income level - -c During a life insurance policy replacement, the insurer is required to provide the policyowner a free-look period of at least a)10 days. b)20 days. c)30 days. d)90 days. - -c Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to a)3 years. b)5 years. c)10 years. d)12 years. - -c 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 of up to a)$2,000. b)$3,000. c)$5,000. d)$1,500. - -c All of the following are examples of risk retention EXCEPT a)Copayments. b)Self-insurance. c)Premiums. d)Deductibles. - -c Which of the following would NOT be a violation of state insurance regulations? a)Agent B charges his clients a consulting fee, in addition to the premium for placing a policy. b)Agent C uses her license to write only business other than controlled. c)Agent D collects premiums due on policies and deposits the funds in his own personal account. d)Agent A uses her license to write only insurance for herself and her immediate family. - -b An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? a)Consideration b)Good faith c)Representation d)Adhesion - -a Which of the following is the best reason to purchase life insurance rather than annuities? a)To liquidate a sum of money over a period of years b)To create regular income payments c)To liquidate a sum of money over a lifetime d)To create an estate - -d If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may a)Require a higher premium. b)Prolong the open enrollment period. c)Increase medical requirements on existing members. d)Require evidence of insurability. - -d Which of the following best describes fixed-period settlement option? a)The death benefit must be paid out in a lump sum within a certain time period. b)Income is guaranteed for the life of the beneficiary. c)Both the principal and interest will be liquidated over a selected period of time. d)Only the principal amount will be paid out within a specified period of time. - -c Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit? a)Equity Indexed Universal Life b)Variable Universal Life c)Universal Life - Option A d)Universal Life - Option B - -c Which of the following statements concerning buy-sell agreements is true? a)Premiums paid are deductible as a business expense. b)Benefits received are considered income taxable. c)Buy-sell agreements pay in the event of a medical emergency. d)Buy-sell agreements are normally funded with a life insurance policy. - -d All of the following are required in a life insurance illustration EXCEPT a)Name and home address of agent. b)Name and age of proposed insured. c)Underwriting classification upon which the illustration is based. d)Name of insurer. - -a When replacing a policy, an insurer must maintain a file containing copies of all statements for a)5 years. b)10 years. c)As long as the insurer remains in business. d)3 years. - -a Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner? a)Cash surrender b)Reduced paid-up c)Paid-up options d)Extended term - -a An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy? a)$20,000 b)$25,000 c)$50,000 d)The face amount will be determined by the insurer. - -c All of the following are personal uses of life insurance EXCEPT a)Estate creation. b)Cash accumulation. c)Buy-sell agreement. d)Survivor protection. - -c Jack and Jill are twins. When their grandfather died, he left each of them $100,000, which they each used to purchase an annuity. When they retire, since each select the life income option, which will receive the larger monthly annuity payment? a)Jack's payment will be larger. b)Jill's payment will be larger. c)Their payments will be based upon their health condition at the time payments begin. d)Because they are the same age, the payments will be the same. - -a Any person who violates an insurance statute or rule of Wisconsin can be imprisoned for up to how many years? a)2 b)3 c)4 d)5 - -b Which statement regarding insurable risks is NOT correct? a)Insurance cannot be mandatory b)The insurable risk needs to be statistically predictable. c)An insurable risk must involve a loss that is definite as to cause, time, place and amount. d)Insureds cannot be randomly selected. - -d Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report a)Must be informed of the source of the report. b)Are entitled to obtain a copy of the report from the party who ordered it. c)Must be advised that a copy of the report is available to anyone who requests it. d)May sue the reporting agency in order to get inaccurate data corrected. - -a Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe? a)Express b)Implied c)Assumed d)Apparent - -d The XYZ Insurance Company markets standard accident and health policy as a Medicare supplement policy. The company is guilty of a)Nothing. b)Misrepresentation. c)Coercion. d)Rebating. - -b The Commissioner may issue a temporary license for an intermediary for a period of up to a)12 months .b)24 months. c)3 months. d)6 months. - -a What is the maximum number of insurance risks an agent can place with a single insurer in one calendar year if the agent is not listed with that insurer? a)7 b)10 c)3 d)5 - -d Which of the following persons is required to complete prelicensing education in Wisconsin? a)Limited lines title insurance applicant b)Resident applicant with a 2-year associate's degree in business management c)Any person who has completed a 4-year college degree in business with an insurance emphasis d)Any person who has completed a 2-year Wisconsin vocational school degree in insurance - -b