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40 Cards in this Set

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  • Back
Which of the following would be the basic source of information used by the company in the risk selection process?
Application
A 27-year old professional has limited income and can only budget $15 per month for life insurance. Which of the following life insurance policies would provide the largest face amount for the amount of premium?
Term insurance
A 403(b) plan, commonly referred to as a TSA, is available to be used by
Teachers and not-for-profit organizations
A businessowner went to the bank to obtain a loan in order to fund the purchase of a doughnut shop, but the bank needed more in trade than she had expected. Since the businessowner has a $250,000 life insurance policy, she decided to use it to secure the loan. Which provision makes this possible?
Collateral assignment
A claimant, who is totally and permanently disabled, is eligible for Social Security Disability benefits after an elimination period of
5 months
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then
The amount received is tax-free
A couple owns a life insurance policy with a Children’s Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
Proof of insurability is not required.
A father owns a life insurance policy on this fifteen-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’s premiums will be waived until she is 21.
A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?
If the father is disabled for more than 6 months
A group life insurance policy written for a Financial institution (state or federally regulated financial institution) to insure the depositors or depositor members of the financial institution for the benefit of persons other than the financial institution or its officers, must have a minimum of
100 eligible members insured
A key person insurance policy can pay for which of the following?
Costs of training a replacement
A legally acceptable attempt by an existing insurer, or its agent, to continue existing life insurance in force when a Comparative Information Form has been received from a replacing insurer is called
Conservation
A license may be denied, suspended, or revoked if the licensee
All of the above
A life insurance policy used to fund an agreement that contractually establishes the intent of someone to purchase a business upon the insured business owner's death is a
Buy-sell agreement
A life insurance policyowner has the flexability to increase the amount of premium and then decrease it at a later date. The person is also allowed to skip permium payments, privided that there is enough cash value in the policy to cover the premuim amount. What type of policy is this?
Universal life
A life insurance policyowner skips her permium payment, but the policy does not lapse. Instead, the premium amount is deducted from the cash value of the policy. What type of policy is this?
Universal life
A limited lines respresentative is an individual, partership, or corporation who
Is authorized by the Commissioner to solicit contract for a particular line of insurance, which does not require the level of professional compentency demanded for an insurance license.
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that this policy
Required a premium increase each renewal
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
A partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called a
Cross-purchase plan
A party wishing to buy an annuity that will advance with economic and market conditions should buy a
Variable annuity
A period of a producer's license suspension cannot exceed
12 months
A policy states that it will pay the face amount if the insured dies during the 20 year permium paying period and nothing if death occurs after the 20 year peroid. What type of policy is this?
20-year level term policy
A policyowner borrowed a portion of cash value from his whole life policy. When he died six months later, the loan had not been repaid. How will that affect the death benefit to the beneficiary?
The death benefit will be reduced by the amount of any unpaid loans and interest
A policyowner fails to pay the premium due on this whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?
Automatic premium loan
A policyowner of an Adjustable Life policy can increase premium payments and
Have a limited pay policy
A premature distribution from a Roth IRA made before the individual reaches age 59 1/2 is subject to a 10% penalty tax unless the distibution was for
A first-time home purchase
A primary beneficiary discovers upon the death of her uncle that he chose the interest only option. What does this mean?
The beneficiary will only receive payments of the interest earned on the death benefits
A producer in another state wants to become a producer in Washington. The other state gives the same privileges to Washington producer wanting to be licensed in that state as it does its own producer. WA therefore extends the privileges o its producers to the prosepective producer of the other state. What is this called?
Reciprocity
A producer is selling a client a Variable Life Insurance policy and as an inducement shows that client a projection based upon shares or dividends paid on a similar policy. This is
Misrepresentation
A producer who gives special favors or advantages in dividends or other benefits is guilty of
Rebating
A producer who omits a statement which may mislead or deceive the persons addressed has committed
Misrepresentation
A prospective insured receives a conditional receipt and dies before the policy is issued. The company will
Pay the policy proceeds only if it would have issued the policy
A rider attached to a life insurance policy that provides coverage on the insured’s family members is called the
Other-insured rider
A Straight Life policy changes
A level annual premium for the life of the insured
A tax sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only, such as public educators
A teacher may defer a portion of his earned income into a(n)
403(b) Plan (TSA)
A temporary license in this state is valid for
180 days
A Universal Life Insurance policy is best described as
An Annually Renewable Term policy with a cash value account
A variable annuity has a payout that is
Continent upon the profitability of the investment portfolio