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
What describes a situation when poor risks are balanced with preferred risks, and average risks are in the middle?
Profitable distribution of exposures
In which of the following instances would the premium be tax deductible?
Premiums paid by an employer on a $30,000 group term life insurance plan for employees
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.
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid-up
In case of a loss, the indemnity provision in insurance policies
Restores an insured person to the same financial state as before the loss.
What is the purpose of annuity riders?
To allow investors to obtain additional benefit
Which of the following riders would NOT cause the Death Benefit to increase?
Payor Benefit Rider
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?
Insuring clause
Which of the following statements regarding deferred compensation funds is INCORRECT?
They are usually qualified plans.
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
The interest is not taxable since it remains inside the insurance policy.
Which is TRUE about the cash surrender nonforfeiture option?
Funds exceeding the premium paid are taxable as ordinary income.
What is the term for a sales campaign conducted through the mail?
Direct-response
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called
Avoidance.
What is a wrongful act or the violation of someone's rights that leads to legal liability called?
Tort
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium.
When would a 20-pay whole life policy endow?
When the insured reaches age 100
To achieve the profitable distribution of exposures,
Preferred risks and poor risks are balanced, with average risks in the middle.
The term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy.
The insured provides a proof of claim to the
Insurer.
Insurance is a contract by which one seeks to protect another from
Loss.
Any insurance agent who commits a repeated violation of the Insurance Code with respect to insurance replacement will be liable for
An administrative penalty of no less than $5,000 and no more than $50,000 per violation.
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
The type of investment.
The LEAST expensive first-year premium is found in which of the following policies?
Annually Renewable Term
Which statement is NOT true regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value.
Which of the following is true regarding the spendthrift clause in life insurance policies?
It can protect the policy proceeds from creditors of the beneficiary.
Which of the following is INCORRECT concerning a noncontributory group plan?
The employees receive individual policies.
In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?
The annuitant will receive the higher of either the guaranteed minimum rate or current rate.
One of the advantages of a family life insurance policy that provides coverage for children is that it
May be converted to permanent insurance for the children without requiring evidence of insurability.
One of the advantages of a family life insurance policy that provides coverage for children is that it
May be converted to permanent insurance for the children without requiring evidence of insurability.
Which of the following would provide an underwriter with information concerning an applicant's health history?
The Medical Information Bureau
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
What type of insurance would be used for a Return of Premium rider?
Increasing Term
Which of the following is NOT a characteristic of pure risk?
The loss must be catastrophic.