1. It is the _________ who issues a Certificate of Authority enabling an insurer to conduct insurance business within a particular state.
A. Secretary of State
B. State Insurance Commissioner
C. State Congress
D. State Senate
2. Buying life insurance so that the death benefit will be available for paying estate taxes due upon the death of the insured is known as:
A. Survivor protection
B. Estate conservation
C . Estate creation
D. Preneed planning
3. With a Current Assumption Whole life policy, what can happen if the cash values increase too quickly?
A. The insurer will be forced to pay out the excess to the policyowner .
B. The policy could mature sooner than expected
C. The face amount of the policy will decrease
D. The policy will lapse
4. Which type of term protection has an increasing face value as the insured gets older?
A. Convertible Term
B. Level Term
C. Increasing Term
D. Renewable Term
5. Which of the following is designed for someone with a large insurance need but with limited cash flow?
A. Whole Life Insurance
B. Variable Life Insurance
C. Term Life Insurance
D. Home Service Life Insurance
6. A married couple purchases a $250,000 Joint Life Policy. When the older of the two dies, what is the amount payable to the survivor?
A. $250,000
B. $125,000
C. $500,000
D. Zero
7. Equity Universal, Variable, and Variable Universal all have which of the following characteristics in common?
A. The overall policy performance has something to do with the stock market in general
B. A securities license is required to sell each policy
C. All have a guaranteed death benefit
D. The owner chooses the separate account(s) to invest the cash values in
8. In a viatical settlement transaction, the life insurance policyowner is referred to as the _________.
A. Provider
B. Third party
C. Viator
D. Viatee
9. A is the insured under a $100,000 10 year term life insurance policy with her spouse named as her beneficiary. If she dies in year 9, what will her spouse receive?
A. The face amount of the policy
B. A refund of all premiums paid
C. The policy's cash values
D. Nothing since this is term insurance
10 . A mother with a teenage son purchases a life policy on his life. The policy includes an optional rider called the Payor Benefit. What will happen to the policy if the mother dies or is disabled before her son reaches age of majority?
A. The policy would pay out a modest lump sum to the beneficiary
B. The premiums would be suspended and later paid back by the son
C. The amount of coverage is reduced as the policy is paid up
D. The premiums on the son's policy would be waived until the son reaches a specified age
11. A client purchases an individual disability income policy and receives the policy from the insurer 45 days after application. Upon receipt of the policy, the client typically has ______days to review and return the policy to receive a full refund for any reason.
A. 20
B. 45
C. 35
D. 10
12.The ____________ provision prevents a Whole Life Policy from lapsing, as long as there is adequate cash value, if the insured/policyowner forgets to pay the premium by the end of the grace period.
A. Conservation
B. Automatic Premium Loan
C. Reinstatement
D. Mode of Premium
13. A universal life policy has a death benefit of $125,000 and a cash accumulation value of $15,000. Generally, what will happen to the policy if there is a $5,000 partial withdrawal?
A. The policy will immediately be voided by the insurer
B. The policy will become paid up
C. The death benefit or cash accumulation will be reduced by the partial withdrawal
D. The policy will be used as collateral for a loan from the insurer for which interest will be charged
14. In order to make sure that a creditor of the insured is not paid more than the outstanding loan at time of claim, the policyowner should:
A. Indicate the percentage of the face amount the creditor will receive
B. Specify a dollar amount the creditor should receive at time of claim
C. Purchase a decreasing benefit policy that matches the loan repayment schedule
D. Name the creditor as a primary beneficiary
15. When there is enough cash value within a life policy to pay the premium, the Automatic Premium Loan provision prevents the policy from:
A. Surrendering
B. Converting
C. Lapsing
D. Renewing
16. A universal life policy has a death benefit of $125,000 and a cash accumulation value of $15,000. Generally, what will happen to the policy if there is a $5,000 partial withdrawal?
A. The policy will immediately be voided by the insurer
B. The policy will become paid up
C. The death benefit or cash accumulation will be reduced by the partial withdrawal
D. The policy will be used as collateral for a loan from the insurer for which interest will be charged
17. In order to make sure that a creditor of the insured is not paid more than the outstanding loan at time of claim, the policyowner should:
A. Indicate the percentage of the face amount the creditor will receive
B. Specify a dollar amount the creditor should receive at time of claim
C. Purchase a decreasing benefit policy that matches the loan repayment schedule
D. Name the creditor as a primary beneficiary
18. When there is enough cash value within a life policy to pay the premium, the Automatic Premium Loan provision prevents the policy from:
A. Surrendering
B. Converting
C. Lapsing
D. Renewing
19. All of the following are situations in which the insurer is obligated to pay out a death benefit after the insured has died, except:
A. The insurer discovers the gender of the insured was misstated
B. The premiums have not been paid and have been overdue for 3 years
C. An insured commits suicide 7 years after the policy was issued
D .The insured was an experienced pilot who died in a plane crash but had a policy issued with an aviation rider for an additional premium
20. With respect to Fraternal Benefit Societies, which of the following statements is NOT correct?
A. The regulations that apply to producers do not apply to Society producers
B. A fraternal benefit society operates for the benefit of its members and their beneficiaries
C. A Society's license is continuous unless revoked or suspended
D. A fraternal benefit society is taxed only on real estate it owns and office equipment it purchases