Any insurance agent who engages in the insurance business and violates the Code with respect to insurance replacement shall on the first violation
Be fined a sum of $1,000.
What is the purpose of a conditional receipt?
It is intended to provide coverage on a date prior to the policy issue.
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the appli
Ancestry.
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
Conditional
Which of the following is INCORRECT concerning a noncontributory group plan?
The employees receive individual policies.
Under a pure life annuity, an income is payable by the company
Only for the life of the annuitant.
When a discontinued policy contained a death benefit, what term is used in the CIC to describe the length of the applicable extension of benefits?
Reasonable
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
Pay the policy proceeds only if it would have issued the policy.
What are the continuing education requirements for life-only agents in California?
24 hours every 2 years
Which of the following annuity riders ensures that the owner will receive from an annuity at least the amount paid for the annuity?
Guaranteed Lifetime Withdrawal
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing term
All of the following topics may be included in the continuing education requirement for long-term care insurance EXCEPT
Sales techniques and overcoming client objectives in the purchase of long-term care insurance.
A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?
Joint and survivor
Graded-Premium Whole Life policy premiums are typically lower initially, but gradually increase for a period of 5 to 10 years. After the period of increase the premiums will
Be level thereafter.
All of the following are true regarding a qualified annuity EXCEPT
At distribution, all amounts received by the employee are tax free.
The initial amount of credit life insurance may NOT exceed
The amount to be repaid under the contract.
Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase?
Withdrawn amounts are taxed on a last in, first out basis.
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
Convertible Term Policy.
Which of the following statements is TRUE concerning irrevocable beneficiaries?
They can be changed only with the written consent of that beneficiary.
Which of the following is NOT the consideration in a policy?
The application given to a prospective insured
What type of insurance would be used for a Return of Premium rider?
Increasing Term
Which of the following statements regarding Business Overhead Expense policies is NOT true?
Benefits are usually limited to six months.
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become
Larger.
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report.
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
Nothing; the payments will cease.
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
Which of the following elements in an Indexed Universal Life policy is tied to an index?
Cash values
No person can act as an administrator in this state unless he or she
Holds a certificate of registration issued by the Commissioner.
If a business owner becomes totally disabled, a Business Overhead Expense policy will pay all of the following EXCEPT
Loss of the owner's income.
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
The date of medical exam
To achieve the profitable distribution of exposures,
Preferred risks and poor risks are balanced, with average risks in the middle.
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
Every expressed warranty made at or before the execution of a policy must be
Contained in and referred to in the policy or other document and signed by the insured.
Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which met
Reduction
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated
Which of the following is NOT considered personally identifiable information?
Government records
The act of revoking or terminating an insurance policy is called
Cancellation.
The insurer may suspect that a moral hazard exists if the policyholder
Is not honest about his health on an application for insurance.