questions I got wrong Flashcards by official kj

An applicant who pays the initial premium at the time of application is typically given a(n)

A. conditional receipt
B. certified receipt
C. official receipt
D. binding receipt

A. conditional receipt

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What would be an accurate definition of “controlled business”?

A. Insurance business that is obtained by replacing an existing policy through misrepresentation
B. Insurance business that is obtained through false advertising
C. Insurance business obtained by an agent through coercion, intimidation, or boycotting
D. Insurance business that is written on the agent’s own life, property, or interests

D. Insurance business that is written on the agent’s own life, property, or interests

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Which two entities regulate variable annuities?

A. Department of Financial Services; and Securities Exchange Commission
B. National Association of Insurance and Financial Advisors; and Securities Exchange Commission
C. Financial Industry Regulatory Authority; and Department of Financial Services
D. National Association of Insurance Commissioners; and Department of Financial Services

A. Department of Financial Services; and Securities Exchange Commission

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Which of the following is NOT an unfair claim settlement practice?

A. Failing to acknowledge and act promptly with respect to an insurance claim
B. Failing to accept or deny a claim within reasonable time after proof of loss is submitted
C. Compelling an insured to initiate a lawsuit by offering less on an insurance claim
D. Needing written documentation of claim details

D. Needing written documentation of claim details

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Every resident agent must have and maintain at their place of business the usual and customary records pertaining to transactions under their license for at least how long?

1 year
5 years
7 years
3 years

5 years

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Florida resident insurance agents must complete __ hours of law and ethics continuing education every two years.

5
3
6
4

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A life insurance policyowner may sell their policy to a(n) _____ in order to receive a percentage of the policy’s face value.

viator agent
viatical settlement provider
broker
insurer

viatical settlement provider

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Which department oversees ‘Market Conduct Examinations’ in Florida?

Department of Revenue
Department of Markets
Office of Financial Regulation
Office of Insurance Regulation

Office of Insurance Regulation

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In Florida, what is the maximum percentage of controlled business an agent may produce?

60%
50%
40%
30%

50%

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According to Florida law, an additional lapse notice must be issued after the standard grace period has expired for policyowners age

69 or older
64 years or older
21 and under
59 1/2 or older

64 years or older

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All of the following are eligibility requirements for an association group EXCEPT

A. Must have been organized for some reason other than to obtain group insurance
B. Group must hold regular meetings at least on an annual basis
C. Contributory plans require a minimum of 25 participants
D. Group must have been in existence for two years

C. Contributory plans require a minimum of 25 participants

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Group Life policies in Florida are required to contain a conversion privilege that allows for conversion

A. to an individual policy at anytime
B. with evidence of insurability
C. only if the premiums are paid by the employer
D. to an individual policy for a stated period of time

D. to an individual policy for a stated period of time

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A 55 year old recently received a $30,000 distribution from a previous employer’s 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?

A. Income taxes plus a 10% penalty tax on $30,000
B. Only income taxes on $30,000
C. Income taxes plus a 10% penalty tax on $24,000
D. Only income taxes on $24,000

A. Income taxes plus a 10% penalty tax on $30,000

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Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?

A. Adjustable
B. Modification
C. Exchange
D. Conversion

D. Conversion

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A life insurance application must be signed by all of these, EXCEPT:

the policyowner
the insured (if an adult)
the agent
beneficiary

beneficiary

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When is the face amount paid under a Joint Life and Survivor policy?

A. upon death of the first insured
B. when one of the insureds becomes disabled and no longer able to make premium payments
C. upon death of the last insured
D. when policy reaches maturation

C. upon death of the last insured

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T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that T is an acceptable risk, what item is given to T?

A. Warranty receipt
B. Binding receipt
C. Conditional receipt
D. Backdated receipt

C. Conditional receipt

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A statement made by an insured in an insurance application that must be true to the best of one’s knowledge and which becomes a part of the contract is known as:

a mutual assent
a warranty
an insuring agreement
a representation

a representation

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An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?

65
59 1/2
70 1/2
55

59 1/2

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Which of the following statements is CORRECT about an agent who is taking an insurance application?

A. The agent should avoid asking the applicant questions that may cause embarrassment
B. The agent may answer routine questions on the application for the applicant
C. The agent may allow a member of the applicant’s immediate family to sign the application if the applicant is not available
D. The agent should have the applicant initial any changes made on the application

D. The agent should have the applicant initial any changes made on the application

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S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase?

Return of premium policy
Graded whole life policy
Endowment
Equity index insurance

Equity index insurance

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Stranger-Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a(n):

A. relative with insurable interest
B. third-party with no insurable interest
C. underwriter
D. sole proprietor with insurable interest

B. third-party with no insurable interest

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Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?

Split-dollar plan
Key employee plan
Deferred compensation plan
Employer purchase plan

Split-dollar plan

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A policy loan is made possible by which of these life insurance policy features?

Extended term provision
Owner’s rights provision
Consideration clause
Cash value provision

Cash value provision

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Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? policyowner insured beneficiary insurer

policyowner

All of these statements concerning Settlement Options are true, EXCEPT: A. Rapid depletion of proceeds can be avoided B. Proceeds can be administered by the insurance company C. Increased proceeds can be provided through accumulation of interest D. Only the beneficiary may select

D. Only the beneficiary may select

What type of employee welfare plans are not subject to ERISA regulations? Qualified plans Major medical plans Corporate Church plans

Church plans

Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary? A. All proceeds are considered taxable income in the year they are received B. All proceeds are income tax free in the year they are received C. The proceeds which exceed the amount paid in premiums are taxable D. The proceeds are taxable only if the beneficiary's tax bracket has changed from the payout

B. All proceeds are income tax free in the year they are received

B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of A. additional Whole Life coverage at any time B. additional Term Life coverage at specified intervals C. additional Term Life coverage at any time D. additional Whole Life coverage at specified times

D. additional Whole Life coverage at specified times

How long does the coverage normally remain on a limited-pay life policy? A. age 100 B. at the discretion of the insurer C. when premium payments stop D. age 65

A. age 100

A(n) _____ rider may be used to include coverage for children under their parents' life insurance policy. Payor Conversion Term Parent

Term

A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid: A. ever paying income taxes on the distributions B. paying trustee fees C. mandatory income tax withholding on the transfer amount D. paying transfer fees

C. mandatory income tax withholding on the transfer amount

In life insurance, the needs approach is used mostly to establish: A. which company a client should use when applying for life insurance B. which type of life insurance a client should apply for C. how much life insurance a client should apply for D. what the maximum amount the client can spend on life insurance

C. how much life insurance a client should apply for

The combination of Whole Life and _______ Term insurance is referred to as a Family Income Policy Universal Variable Level Decreasing

Decreasing

Dividends paid from a life insurance policy are issued by the insurer issued by the Department of Insurance guaranteed taxable

issued by the insurer

Y purchased $100,000 worth of permanent protection on himself and $50,000 worth of 10-year Term coverage for his wife on the same policy. Which of these policies did Y purchase? A. Family Income policy B. Endowment with Extended Term C. Whole Life policy with an Other Insured Rider D. Endowment with a Payor Benefit

C. Whole Life policy with an Other Insured Rider

An underwriter determines that a life insurance applicant's risk should be reclassified due to a health issue. This policy may be issued with a(n): A. extended Contestable period B. Concealment clause C. extra premium D. exclusion for the medical condition

C. extra premium

The Accelerated Death Benefit provision in a life insurance policy is also known as a(n): A. 1035 exchange B. Non-forfeiture option C. Inter vivos gift D. Living Benefit

A. Living Benefit

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will: A. pay the death benefit in full B. adjust the death benefit to an increased amount C. adjust the death benefit to a reduced amount D. deny the claim

C. adjust the death benefit to a reduced amount

Before a life insurance policy is issued, which of these components of the contract is required? A. A conditional receipt B. Applicant's signature on application C. Beneficiary's signature D. Attending Physician Statement (APS)

B. Applicant's signature on application

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? A. Survivor Policy B. Family Income Policy C. Family Survivor Policy D. Family Maintenance Policy

D. Family Maintenance Policy

The USA Patriot Act was enacted in: 2001 2002 2004 2003

2001

How are policyowner dividends treated in regards to income tax? A. Dividends are not taxable B. Interest on accumulations is taxed C. Taxed as ordinary income D. Taxed as capital gains

B. Interest on accumulations is taxed

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount? A. Consideration clause B. Accelerated Benefits provision C. Entire Contract D. Accidental Death and Dismemberment clause

D. Accidental Death and Dismemberment clause

Life and health insurance policies are: A. Unilateral contracts B. Multi-lateral contracts C. Bilateral contracts D. Non-lateral contracts

A. Unilateral contracts

Which statement is true regarding a minor beneficiary? A. Normally, a guardian is required to be appointed in the Beneficiary clause of the contract B. Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21 C. The minor is entitled to receive the death proceeds immediately D. The minor must pay the debts of the insured's estate before receiving any of the proceeds

A. Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

How are surrender charges deducted in a life policy with a rear-end loaded provision? A. Deducted from the death benefit B. Deducted when assigned to another policyowner C. Deducted from policy's cash value D. Deducted when the policy is discontinued

D. Deducted when the policy is discontinued

At what point does a Whole Life Insurance policy endow? A. In 30 years or age 65, whichever comes first B. At age 65 C. When the cash value equals the death benefit D. When premium paid equals the death benefit

C. When the cash value equals the death benefit

What benefit does the Payor clause on a Juvenile Life policy provide? A. Allows payor to increase face amount without providing evidence of insurability B. Premiums are waived if payor becomes disabled C. Premiums are waived if juvenile becomes disabled D. Allows payor to assign ownership in the event payor becomes disabled

B. Premiums are waived if payor becomes disabled

Which of the following is considered an element of a Variable Life Policy? A. Underlying equity investment B. Little or no risk to insured C. Insurer assumes all the risk D. Guaranteed dividends

A. Underlying equity investment

When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take? A. Void the policy only if it is discovered during the Contestable period and proven to be material B. Void the policy if found during the Contestable period C. Void the policy, no matter when it is discovered D. Void the policy at any time only if it is found to be material

A. Void the policy only if it is discovered during the Contestable period and proven to be material

Which of these is NOT a type of agent authority? A. Principal B. Implied C. Express D. Apparent

A. Principal

Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE? A. Taxed as ordinary income B. Partially taxable C. Nontaxable D. Tax deductible

A. Taxed as ordinary income

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period? A. Company pays twice the face amount under the double indemnity clause B. Claims are denied under the Suicide clause of the policy C. Claims are paid in full D. Premiums are returned under the Consideration clause

B. Claims are denied under the Suicide clause of the policy

A policyowner is able to choose the frequency of premium payments through what policy feature? Assignment provision Consideration Premium Mode Payor benefit

Premium Mode

A policyowner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need? Primary Contingent Irrevocable Revocable

Irrevocable

N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? Claim will be decided by an arbitrator Claim will be partially paid Claim will be denied Claim will be paid in full

Claim will be denied

A life insurance arrangement which circumvents insurable interest statutes is called: an indemnity contract key person insurance a contract of adhesion Investor-Originated Life Insurance

Investor-Originated Life Insurance

The reason for backdating a policy is A. to decrease the face amount B. to decrease the Contestable period C. to obtain a premium rate based on an earlier age D. to avoid being considered a substandard risk due to a recent cancer diagnosis

C. to obtain a premium rate based on an earlier age

S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? Grace Period Waiver of Premium Assignment Automatic Policy Loan

Automatic Policy Loan

What type of life policy covers two lives and pays the face amount after the first one dies? Joint Life Policy Last Survivor Policy Family Income Policy Group Life

Joint Life Policy

Which statement is TRUE regarding a Variable Whole Life policy? A. It has guaranteed dividends B. It is a combination of an Endowment and a Increasing Term policy C. A minimum guaranteed Death benefit is provided D. Its premiums and benefits are variable

A minimum guaranteed Death benefit is provided

On a life insurance policy, who is qualified to change the beneficiary designation? Payer Policyowner Insurer Primary beneficiary

Policyowner

The advantage of reinstating an original life policy is A. the premiums are based on a younger age B. the premiums are based on the current age of the insured C. the interest charged on policy loans will be lowered D. a new incontestable period will begin

A. the premiums are based on a younger age

At what point does an informal agreement become a binding contract? A. When consideration is provided by one of the parties to the contract B. When one party makes an invitation and the other makes an offer C. When an offer is made by one party and the other party rejects the offer and makes a counteroffer D. When one party makes an offer and the other party accepts that offer

A. When consideration is provided by one of the parties to the contract

Insurance policies are offered on a "take it or leave it" basis, which make them: Unilateral Contracts Contracts of Adhesion Conditional Contracts Aleatory Contracts

Contracts of Adhesion

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? Variable Life Adjustable Life Universal Life Modified Whole Life

Variable Life

Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? Legal Purpose (Insurable Interest) Competent Parties Consideration Offer/Acceptance

Legal Purpose (Insurable Interest)

A(n) ________ contained in a life insurance policy states that the policy will NOT cover certain risks. curtailment elimination limitation exclusion

exclusion

The Consideration clause of an insurance contract includes: A. the buyer's guide B. the named beneficiaries C. the schedule and amount of premium payments D. a summary of the coverage provided

C. the schedule and amount of premium payments

A level premium indicates: A. the premium is fixed for the entire duration of the contract B. the premium can only be changed with the consent of the insurer C. the premium stays level until the policy's renewal date D. the premium is fixed for a period stated in the contract, then becomes variable

A. the premium is fixed for the entire duration of the contract

Which of the following is an important underwriting principle of group life insurance? A. Employer must pay for the entire premium B. Everyone must be covered in the group C. The group must be formed for the purpose of getting affordable insurance D. Physical examinations are required

Everyone must be covered in the group

A non-contributory plan requires ____ participation of all eligible employees. 25% 50% 75% 100%

100%

Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? Adhesion Aleatory Unilateral Consideration

Aleatory

J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used? Revocable Contingent Primary Irrevocable

Revocable

T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide? A. Income for a fixed period stated in the contract B. Income that cannot be outlived by the owner C. Inflation protection D. Tax-free income

B. Income that cannot be outlived by the owner

P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy? A. A straight life deferred annuity B. A straight life annuity C. An immediate annuity D. A deferred annuity

An immediate annuity

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? Installment Refund Fixed Certain Joint and Full Survivor Life Annuity with Period Certain

Life Annuity with Period Certain

Which of the following statements about noncontributory employee group life insurance is FALSE? A. All eligible employees must be covered B. No evidence of insurability required C. Must have conversion rights D. A minimum number of employees is required to participate

D. A minimum number of employees is required to participate

Group life insurance policies are generally written as: group whole life increasing term a term rider annually renewable term

annually renewable term

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n) Joint Refund annuity Equal Value annuity Straight Refund annuity Installment Refund annuity

Installment Refund annuity

questions I got wrong Flashcards

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