State exam life insurance Exam
Questions with Answers
What is the prerequisite for receiving a commission from an insurance
transaction? - -License for same type of insurance transaction.
- When would life ins. proceeds be taxable by the Federal government? - -If
there is a transfer for value (policy is sold to another person)
- A qualified plan may not: - -Favor shareholders and top executives
- Policyholder who is the insured named a primary beneficiary and
contingent beneficiary. Prior to the insured's death, primary and contingent
dies by a common disaster. Who will receive the proceeds? - -The insured's
estate
- After insured dies, it is discovered that the policy was rated based upon an
incorrect age. The insured misstated age on application 8 years ago. What
effect will this have on the benefit? - -Proceeds will be adjusted to correct
age.
- When it comes to the attention of the Dept. of Ins. that a producer has
committed a violation or engaged in an unfair trade practice, before issuing
a cease and desist order, the head of the Dept. of Ins. must? - -Hold a
hearing
- What is NOT true about the survivorship life policy? - -The premium is
based on the age of each insured.
- How does the incontestability clause benefit the insured? - -It prevents the
policy from being cancelled if, after several years, it is discovered that there
was a misrepresentation by the policy owner.
- In an adjustable life policy, what can NOT be changed by policy owner? - -
The type of investment.
- What is NOT an unfair claims settlement practice? - -Suggesting
negotiations in settling the claim
- What policy rider would an insured use to protect against the negative
effect of inflation on the future purchasing power of a life policy? - -Cost of
living rider. The amt. of increase is tied to an increase in the inflation index,
such as the Consumer Price Index
, - Statements made by an applicant for life ins. which are true to the best of
their knowledge are? - -Representations
- Who can make fully deductible contributions to a traditional IRA. - -An
individual NOT covered by employer-sponsored plan who has earned income.
- What is true regarding the annuity period? - -It may last for the lifetime of
the annuitant
- To avoid violating the state ins. code regarding unfair claims settlement
practices, insurers must pay a claim within how many days of the final
agreement to the settlement? - -FIVE days
- What settlement option provides a single beneficiary with income for the
rest of his/her life? - -Single life option
- Cameron is purchasing a permanent life ins. with face value of $25,000.
This is all the ins. he feels he can afford at this time. he wants to be sure that
additional coverage will be available in the future. He should include in this
policy? - -Guaranteed insurability options. It allows insured to purchase
specific amts. of additional ins. at specific times w/o proof of insurability.
- An insured has a life policy with face amt. of $500. He pays a premium
every week to the agent who sold his the policy. What kind of policy does he
have? - -Industrial life. It is written on an individual basis in small amts.
usually face value less than $1,000, with premium payable weekly or
monthly. Generally policies are written non-medically.
- What is NOT used in determining annuity suitability? - -Beneficiaries age
- In Ohio, a temporary license may NOT be issued for the - -Agent's
retirement
- Based on the Human Life Value Approach, what is NOT used to calculate an
individual's life value? - -Predicted needs of the family after insured's death.
- A viatical settlement is arranged between a viator company and a/an? - -
Terminally ill insured who transfers his/her life ins. in return for an immediate
cash settlement.
- A couple receives a set amt. of income from their annuity. When the wife
dies, husband no longer receives annuity payments. What type of annuity
did the couple buy? - -Joint life annuity option
- Insurance transactions include - -Solicitation, negotiations, sale, advising
an individual concerning coverage/claims.
, - Loss - -Reduction, decrease or disappearance of value caused by a peril
- Methods of handling risks include - -Avoidance, Retention, Sharing,
Reduction, Transfer
- Elements of insurable risks - --due to chance outside the insured control
-definite and measurable specific to a cause, time, place and amt.
- Private insurances are classified by: - --ownership
-authority to transact business
-location
-marketing and distribution systems
-rating financial strength
- Types of insurers include - --Stock companies
-Mutual companies
-Fraternal benefits societies
-Reciprocal Ins. companies
-Risk retention group
-Lloyd's Association
-Surplus Lines
- Law of large numbers - --larger # of people with similar exposure to loss,
more predictable actual loss will be
-sharing risk among large pool of people
- Who oversees the implementation of the provisions related to private
health insurance and works with states to establish new Health Ins.
Marketplaces? - -CCIIO (Center for Consumer Information and Insurance
- Disregarding all other variables, rank the initial premium paid by the
insured for the ins. policy from lowest to highest - -Modified whole life,
traditionally/ordinary whole life, single premium whole life
- What ins. is known for having level premiums with a fixed rate of return
resulting in guaranteed cash value? - -Whole life
- What settlement option does the insurer retain the death benefit but pays
the beneficiary the earnings on the death benefit? - -Interest only
- An individual wants to buy a life ins. policy in which he can count on
guaranteed minimum benefits. What type of ins. would best suit his needs? -
-Fixed life ins. that offers minimum guaranteed or fixed benefits stated in the
contract.
Questions with Answers
What is the prerequisite for receiving a commission from an insurance
transaction? - -License for same type of insurance transaction.
- When would life ins. proceeds be taxable by the Federal government? - -If
there is a transfer for value (policy is sold to another person)
- A qualified plan may not: - -Favor shareholders and top executives
- Policyholder who is the insured named a primary beneficiary and
contingent beneficiary. Prior to the insured's death, primary and contingent
dies by a common disaster. Who will receive the proceeds? - -The insured's
estate
- After insured dies, it is discovered that the policy was rated based upon an
incorrect age. The insured misstated age on application 8 years ago. What
effect will this have on the benefit? - -Proceeds will be adjusted to correct
age.
- When it comes to the attention of the Dept. of Ins. that a producer has
committed a violation or engaged in an unfair trade practice, before issuing
a cease and desist order, the head of the Dept. of Ins. must? - -Hold a
hearing
- What is NOT true about the survivorship life policy? - -The premium is
based on the age of each insured.
- How does the incontestability clause benefit the insured? - -It prevents the
policy from being cancelled if, after several years, it is discovered that there
was a misrepresentation by the policy owner.
- In an adjustable life policy, what can NOT be changed by policy owner? - -
The type of investment.
- What is NOT an unfair claims settlement practice? - -Suggesting
negotiations in settling the claim
- What policy rider would an insured use to protect against the negative
effect of inflation on the future purchasing power of a life policy? - -Cost of
living rider. The amt. of increase is tied to an increase in the inflation index,
such as the Consumer Price Index
, - Statements made by an applicant for life ins. which are true to the best of
their knowledge are? - -Representations
- Who can make fully deductible contributions to a traditional IRA. - -An
individual NOT covered by employer-sponsored plan who has earned income.
- What is true regarding the annuity period? - -It may last for the lifetime of
the annuitant
- To avoid violating the state ins. code regarding unfair claims settlement
practices, insurers must pay a claim within how many days of the final
agreement to the settlement? - -FIVE days
- What settlement option provides a single beneficiary with income for the
rest of his/her life? - -Single life option
- Cameron is purchasing a permanent life ins. with face value of $25,000.
This is all the ins. he feels he can afford at this time. he wants to be sure that
additional coverage will be available in the future. He should include in this
policy? - -Guaranteed insurability options. It allows insured to purchase
specific amts. of additional ins. at specific times w/o proof of insurability.
- An insured has a life policy with face amt. of $500. He pays a premium
every week to the agent who sold his the policy. What kind of policy does he
have? - -Industrial life. It is written on an individual basis in small amts.
usually face value less than $1,000, with premium payable weekly or
monthly. Generally policies are written non-medically.
- What is NOT used in determining annuity suitability? - -Beneficiaries age
- In Ohio, a temporary license may NOT be issued for the - -Agent's
retirement
- Based on the Human Life Value Approach, what is NOT used to calculate an
individual's life value? - -Predicted needs of the family after insured's death.
- A viatical settlement is arranged between a viator company and a/an? - -
Terminally ill insured who transfers his/her life ins. in return for an immediate
cash settlement.
- A couple receives a set amt. of income from their annuity. When the wife
dies, husband no longer receives annuity payments. What type of annuity
did the couple buy? - -Joint life annuity option
- Insurance transactions include - -Solicitation, negotiations, sale, advising
an individual concerning coverage/claims.
, - Loss - -Reduction, decrease or disappearance of value caused by a peril
- Methods of handling risks include - -Avoidance, Retention, Sharing,
Reduction, Transfer
- Elements of insurable risks - --due to chance outside the insured control
-definite and measurable specific to a cause, time, place and amt.
- Private insurances are classified by: - --ownership
-authority to transact business
-location
-marketing and distribution systems
-rating financial strength
- Types of insurers include - --Stock companies
-Mutual companies
-Fraternal benefits societies
-Reciprocal Ins. companies
-Risk retention group
-Lloyd's Association
-Surplus Lines
- Law of large numbers - --larger # of people with similar exposure to loss,
more predictable actual loss will be
-sharing risk among large pool of people
- Who oversees the implementation of the provisions related to private
health insurance and works with states to establish new Health Ins.
Marketplaces? - -CCIIO (Center for Consumer Information and Insurance
- Disregarding all other variables, rank the initial premium paid by the
insured for the ins. policy from lowest to highest - -Modified whole life,
traditionally/ordinary whole life, single premium whole life
- What ins. is known for having level premiums with a fixed rate of return
resulting in guaranteed cash value? - -Whole life
- What settlement option does the insurer retain the death benefit but pays
the beneficiary the earnings on the death benefit? - -Interest only
- An individual wants to buy a life ins. policy in which he can count on
guaranteed minimum benefits. What type of ins. would best suit his needs? -
-Fixed life ins. that offers minimum guaranteed or fixed benefits stated in the
contract.
