New York Life

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New York Quizzes & Trivia

New York being one of the largest and busiest cities in the world, has its specific traits and ways of survival and living which residents and visitors should know of. Find out more on New York Life below.


Questions and Answers
  • 1. 
    Which of the following is NOT true of Section 1035 Policy Exchanges?
    • A. 

      It is an IRS Code which permits like kind exchanges of property

    • B. 

      It is typically used when exchanging or replacing a less competitive life policy with a more competitive life policy

    • C. 

      Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days

    • D. 

      It requires an absolute assignment of the existing policy to the replacing company who surrenders the contract and issues a replacement policy

  • 2. 
    All of the following are examples of risk retention EXCEPT
    • A. 

      Self-insurance

    • B. 

      Premiums

    • C. 

      Deductibles

    • D. 

      Copayments

  • 3. 
    A projection of insurance needs that is based upon the capitalization of an applicant's future earnings is
    • A. 

      Needs approach.

    • B. 

      Blackout approach

    • C. 

      Lump-sum approach

    • D. 

      Human life value approach

  • 4. 
    Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
    • A. 

      The remainder of the principal

    • B. 

      Nothing; the payments will cease

    • C. 

      Guaranteed minimum benefit

    • D. 

      The amount paid into the annuity

  • 5. 
    Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
    • A. 

      Implied

    • B. 

      Apparent

    • C. 

      Assumed

    • D. 

      Express

  • 6. 
    An employer offers group life insurance to its employees for the amount of $10,000. Which of the following is true?
    • A. 

      The value of insurance will be deducted from the employees’ compensation.

    • B. 

      The cost of coverage paid by the employer is taxed to the employees.

    • C. 

      The cost of coverage paid by the employer is tax deductible by the employees.

    • D. 

      The cost of coverage is a deductible expense by the employer.

  • 7. 
    A father owns a life insurance policy on his 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?
    • A. 

      Payout of the entire death benefit.

    • B. 

      Equal payments to all recipients.

    • C. 

      Income for 2 or more recipients until they die.

    • D. 

      Payment of interest on death proceeds.

  • 8. 
    Which of the following is NOT true regarding Equity Indexed Annuities?
    • A. 

      They have guaranteed minimum interest rates.

    • B. 

      They are less risky than variable annuities.

    • C. 

      They earn lower interest rates than fixed annuities.

    • D. 

      The insurance company keeps a percentage of the returns.

  • 9. 
    A projection of insurance needs that is based upon the capitalization of an applicant's future earnings is
    • A. 

      Needs approach.

    • B. 

      Blackout approach

    • C. 

      Lump-sum approach.

    • D. 

      Human life value approach

  • 10. 
    Equity Indexed Whole Life is policy with what kind of index as its investment feature?
    • A. 

      Equity

    • B. 

      Consumer investment

    • C. 

      Universal

    • D. 

      Consumer Price

  • 11. 
    The risk management technique that is used to prevent a specific loss by not exposing yourself to that activity is called
    • A. 

      Sharing.

    • B. 

      Avoidance.

    • C. 

      Transfer.

    • D. 

      Reduction.

  • 12. 
    Which of the following best describes annually renewable term insurance?
    • A. 

      It is a level term insurance.

    • B. 

      It requires proof of insurability at each renewal.

    • C. 

      Neither the premium nor the death benefit is affected by the insured’s age.

    • D. 

      It provides annually increasing death benefit

  • 13. 
    Which of the following features is NOT a unique advantage to the Roth IRA?
    • A. 

      Contributions may continue beyond attainment of age 70½.

    • B. 

      Distributions may be deferred beyond the attainment of age 70½.

    • C. 

      Qualified distributions at the time of retirement are not taxed as income.

    • D. 

      Contributions are tax deductible.

  • 14. 
    Your client has a life insurance policy that requires that the policyowner only pays premiums for a specified number of years or until death. What kind of policy is it?
    • A. 

      Graded Premium Life Policy

    • B. 

      Limited-pay Life Insurance Policy

    • C. 

      Modified Life Insurance Policy

    • D. 

      Industrial Life Insurance Policy

  • 15. 
    Which statement is NOT true regarding a Straight Life policy?
    • A. 

      It has the lowest annual premium of the three types of Whole Life policies.

    • B. 

      Its premium steadily decreases over time, in response to its growing cash value.

    • C. 

      The face value of the policy is paid to the insured at age 100.

    • D. 

      It usually develops cash value by the end of the third policy year.

  • 16. 
    Which of the following would most directly affect the purchasing power of benefits paid on a fixed annuity?
    • A. 

      Economic inflation

    • B. 

      Interest rates

    • C. 

      Company investment performance

    • D. 

      Guaranteed minimum payout

  • 17. 
    Any licensed person who knowingly makes false material statements related to the business of insurance may be fined and imprisoned for up to
    • A. 

      3 years.

    • B. 

      5 years

    • C. 

      10 years

    • D. 

      12 years

  • 18. 
    Which of the following is NOT true of Section 1035 Policy Exchanges?
    • A. 

      It is an IRS Code which permits like kind exchanges of property

    • B. 

      It is typically used when exchanging or replacing a less competitive life policy with a more competitive life policy

    • C. 

      Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days.

    • D. 

      It requires an absolute assignment of the existing policy to the replacing company who surrenders the contract and issues a replacement policy

  • 19. 
     All of the following are examples of risk retention EXCEPT
    • A. 

      Self-insurance

    • B. 

      Premiums

    • C. 

      Deductibles

    • D. 

      Copayments

  • 20. 
    Which of the following would be considered a non-medical insurance application?
    • A. 

      An application that does not ask any questions about the applicant's medical history

    • B. 

      An agent's report

    • C. 

      An application for life insurance

    • D. 

      An application on which the medical information is completed by the applicant and the agent only

  • 21. 
    An employer offers group life insurance to its employees for the amount of $10,000. Which of the following is true?
    • A. 

      The cost of coverage is a deductible expense by the employer

    • B. 

      The value of insurance will be deducted from the employees’ compensation.

    • C. 

      The cost of coverage paid by the employer is taxed to the employees.

    • D. 

      The cost of coverage paid by the employer is tax deductible by the employees.

  • 22. 
    At a hearing, the person has the opportunity to do all of the following EXCEPT
    • A. 

      File for dismissal of charges.

    • B. 

      Appear in person and by counsel

    • C. 

      Give evidence why an order should not be made

    • D. 

      Obtain witnesses on his or her own behalf.

  • 23. 
     In which of the following situations is it legal to limit coverage based on marital status?
    • A. 

      It is never legal to limit coverage based on marital status

    • B. 

      Excessive number of divorces, as defined by the Insurance Code

    • C. 

      Legal separation during the application process

    • D. 

      Divorce within the last six months of applying for insurance

  • 24. 
    An insured purchases a policy in 2000 and dies in 2005. The insurance company discovers at that time that the insured concealed information during the application process. What can they do?
    • A. 

      Sue for the right to not pay the death benefit

    • B. 

      Pay the death benefit

    • C. 

      Refuse to pay the death benefit because of the fraud

    • D. 

      Pay a decreased death benefit

  • 25. 
    Which component must increase in the increasing term insurance?
    • A. 

      Interest on the proceeds

    • B. 

      Premium

    • C. 

      Death benefit

    • D. 

      Cash value

  • 26. 
    Our client has a life insurance policy that requires that the policyowner only pays premiums for a specified number of years or until death. What kind of policy is it?
    • A. 

      Modified Life Insurance Policy

    • B. 

      Industrial Life Insurance Policy

    • C. 

      Graded Premium Life Policy

    • D. 

      Limited-pay Life Insurance Policy

  • 27. 
    Which of the following insurance providers would be considered a risk sharing arrangement?
    • A. 

      Reciprocal

    • B. 

      Stock

    • C. 

      Mutual

    • D. 

      Surplus lines

  • 28. 
    All of the following information about a customer must be used in determining annuity suitability EXCEPT
    • A. 

      Beneficiary’s age

    • B. 

      Tax status

    • C. 

      Financial experience

    • D. 

      Annual income

  • 29. 
    Which of the following is NOT a characteristic of pure risk?
    • A. 

      The loss exposure must be large

    • B. 

      The loss must be catastrophic

    • C. 

      The loss must be due to chance

    • D. 

      The loss must be measurable in dollars.

  • 30. 
    Which of the following riders provides for a waiver of premium when the policyowner and the insured are NOT the same person?
    • A. 

      Conditions for payment

    • B. 

      Payor benefit

    • C. 

      Waiver of premium

    • D. 

      Waiver of the cost of insurance

  • 31. 
    After what age could a Roth IRA distribution be classified as "qualified"?
    • A. 

      50

    • B. 

      59½

    • C. 

      70

    • D. 

      70½

  • 32. 
     What type of annuity can be purchased with a single premium and provides benefit payments immediately?
    • A. 

      Fixed

    • B. 

      Immediate

    • C. 

      Single premium

    • D. 

      Deferred

  • 33. 
    Which of the following determines the length of time that benefits will be received under the Fixed Amount settlement option?
    • A. 

      Size of each installment

    • B. 

      Predetermined length of time stipulated in the contract

    • C. 

      Length of income period

    • D. 

      Amount of interest

  • 34. 
    Which nonforfeiture option provides coverage for the longest period of time?
    • A. 

      Extended term

    • B. 

      Paid-up option

    • C. 

      Accumulated at interest

    • D. 

      Reduced paid-up

  • 35. 
    Which of the following statements is NOT true concerning insurable interest as it applies to life insurance?
    • A. 

      Business partners have an insurable interest in each other.

    • B. 

      A husband or wife has an insurable interest in their spouse

    • C. 

      An individual has an insurable interest in his or her own life

    • D. 

      A debtor has an insurable interest in the life of a lender

  • 36. 
    When a policy is surrendered for its cash value
    • A. 

      It can only be reinstated as a term policy

    • B. 

      Coverage ends and the policy cannot be reinstated.

    • C. 

      Coverage ends but the policy can be reinstated at anytimed

    • D. 

      It can be reinstated by paying back all policy loans and premiums

  • 37. 
     If a consumer requests additional information concerning an Investigative Consumer Report, how long does the insurer or reporting agency have to comply?
    • A. 

      5 days

    • B. 

      7 days

    • C. 

      10 days

    • D. 

      3 days

  • 38. 
    All of the following could own group life insurance EXCEPT
    • A. 

      A group needing low-cost life insurance

    • B. 

      A group sponsored by an employer

    • C. 

      An alumni group

    • D. 

      A debtor group

  • 39. 
    In a group life insurance policy, the employer may select all of the following EXCEPT
    • A. 

      The premium payor

    • B. 

      The beneficiary

    • C. 

      The type of insurance

    • D. 

      The amount of insurance.

  • 40. 
    Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
    • A. 

      For 20 years or until death, whichever occurs first

    • B. 

      Until the policyowner's age 65

    • C. 

      For 20 years

    • D. 

      Until the policyowner's age 100, when the policy matures.

  • 41. 
    Which of the following will NOT be an appropriate use of a deferred annuity?
    • A. 

      Accumulating funds in an IRA

    • B. 

      Funding a child’s college education

    • C. 

      Creating an estate

    • D. 

      Accumulating retirement funds

  • 42. 
    A projection of insurance needs that is based upon the capitalization of an applicant's future earnings is
    • A. 

      Lump-sum approach

    • B. 

      Human life value approach

    • C. 

      Needs approach

    • D. 

      Blackout approach

  • 43. 
    The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the business is called
    • A. 

      Dividend accumulation

    • B. 

      Premium tax

    • C. 

      Expenses

    • D. 

      Legal reserve

  • 44. 
    Which of the following statements is correct regarding Adjustable Life?
    • A. 

      The type of coverage may be changed only if the new form of coverage has decreasing premiums

    • B. 

      Evidence of insurability may be required when insurance is increased

    • C. 

      It is a form of a variable annuity

    • D. 

      It is most appropriate for people who purchase insurance at older ages.

  • 45. 
    Which of the following is correct concerning the taxation of a Key Person Life Insurance Policy premiums and death benefit?
    • A. 

      Premiums are tax deductible as a business expense and the death benefit is taxable to the company

    • B. 

      Premiums are tax deductible as a business expense and the death benefit is not taxable to the company

    • C. 

      Premiums are not deductible as a business expense and the death benefit is taxable to the company

    • D. 

      Premiums are not deductible as a business expense and the death benefit is not taxable to the company

  • 46. 
    • A. 

      It is an IRS Code which permits like kind exchanges of property

    • B. 

      It is typically used when exchanging or replacing a less competitive life policy with a more competitive life policy

    • C. 

      Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days.

    • D. 

      It requires an absolute assignment of the existing policy to the replacing company who surrenders the contract and issues a replacement policy.

  • 47. 
    Which of the following individuals must pass the written examination to be licensed as an agent?
    • A. 

      A ticket selling airline representative for one-time issuance of baggage or accident insurance

    • B. 

      An individual seeking to be a representative of a fraternal benefit society as its agent.

    • C. 

      A producer previously licensed in New Jersey who is applying for a New York license 120 days after becoming a resident of this state

    • D. 

      A licensee who was licensed on July 1, 1987, to represent any assessment corporation.

  • 48. 
    All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
    • A. 

      Lower

    • B. 

      Higher

    • C. 

      As high

    • D. 

      Half the amount

  • 49. 
    Which of the following is NOT a registration requirement for a life settlement intermediary?
    • A. 

      Submit a set of fingerprints

    • B. 

      Submit proof of being licensed as a life agent for a period of at least one year

    • C. 

      All the persons with controlling interest in life settlement transactions

    • D. 

      List all the states where the intermediary intends to do business

  • 50. 
    SIMPLE Plans require all of the following EXCEPT
    • A. 

      Employees must receive a minimum of $5,000 in annual compensation

    • B. 

      At least 100 employees

    • C. 

      No other qualified plan can be used

    • D. 

      Employers match up to 3% of employee's salary.

  • 51. 
    All of the following statements are components of a Credit Life program EXCEPT
    • A. 

      Benefits are paid to the borrower's beneficiary

    • B. 

      The amount of insurance permissible is limited per borrower

    • C. 

      Premiums are usually paid by the borrower

  • 52. 
    A Universal Life Insurance policy is best described as
    • A. 

      Flexible Premium Variable Life policy

    • B. 

      An Annually Renewable Term policy with a cash value account

    • C. 

      Variable Life with a cash value account

  • 53. 
    Why is an equity indexed annuity considered to be a fixed annuity?
    • A. 

      It has a fixed rate of return

    • B. 

      It is not tied to an index like the S&P 500

    • C. 

      It has a guaranteed minimum interest rate

  • 54. 
    An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of
    • A. 

      Third-party ownership

    • B. 

      A STOLI policy

    • C. 

      A prearranged funeral plan.

  • 55. 
    • A. 

      Unacceptable business practice

    • B. 

      Misrepresentation

    • C. 

      Twisting

  • 56. 
    If a hearing is scheduled for a producer who has violated regulations regarding unfair trade practices, the Superintendent must send a prior notice within how many days of the hearing?
    • A. 

      10 days

    • B. 

      14 days

    • C. 

      20 days

  • 57. 
    In this state, an agency license must be obtained when
    • A. 

      You have more than 50 clients

    • B. 

      You represent more than 7 companies

    • C. 

      You are writing over $50,000 in premium

    • D. 

      You are operating under a name other than your own name.

  • 58. 
    In a life settlement transaction, the owner must be made aware of his or her right to rescind the contract within how many days after the receipt of the life settlement proceeds?
    • A. 

      10 days

    • B. 

      15 days

    • C. 

      30 days

  • 59. 
    The requirement that an agent not co-mingle insurance monies with their own funds is known as
    • A. 

      Accepted accounting principal

    • B. 

      Fiduciary responsibility

    • C. 

      Premium accountability

  • 60. 
    If an agent converts premium he collects for his personal use, he can be charged with
    • A. 

      Embezzlement

    • B. 

      Unethical conduct

    • C. 

      Fraud

  • 61. 
    All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
    • A. 

      The employer pays a bonus to a selected employee to fund the policy

    • B. 

      It is considered a nonqualified employee benefit

    • C. 

      The policy is owned by the company

  • 62. 
    Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
    • A. 

      Nothing; the payments will cease

    • B. 

      Guaranteed minimum benefit

    • C. 

      Amount paid into the annuity

  • 63. 
    Which of the following would be deducted from the death benefit paid to a beneficiary, if a partial accelerated death benefit had been paid while the insured was still alive?
    • A. 

      There are no deductions taken from death benefits

    • B. 

      Penalty imposed for early withdrawal of the death benefit, plus the amount of earnings lost by the insurance company in interest income

    • C. 

      Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit

  • 64. 
    What company produces evaluations of insurer financial status often used by the Insurance Department?
    • A. 

      AM Best

    • B. 

      NAIC

    • C. 

      SEC

  • 65. 
    Which of the following is NOT allowed in credit life insurance?
    • A. 

      Creditor requiring that a debtor buys insurance from a certain insurer

    • B. 

      Creditor having a collateral assignment on the policy

    • C. 

      Creditor requiring that a debtor has a life insurance

    • D. 

      Creditor becoming a policy beneficiary

  • 66. 
    Individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?
    • A. 

      Misrepresentation

    • B. 

      Selective bias

    • C. 

      Discrimination

  • 67. 
    Which of the following applicants could the insurer charge a higher rate and not be charged with unfair discrimination?
    • A. 

      An applicant who has been a victim of domestic abuse

    • B. 

      An applicant that smokes cigarettes as opposed to one that does not

    • C. 

      An applicant that was born in another country

    • D. 

      An applicant who is legally blind

  • 68. 
    Jason wants to advertise his life insurance practice. Which of the following must he include in his advertisements?
    • A. 

      The name of all cities in which he has offices

    • B. 

      His insurance certification

    • C. 

      The name of the city in which he has his principal office

  • 69. 
    A life insurance policyowner skips her premium 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?
    • A. 

      Whole life

    • B. 

      Universal life

    • C. 

      Adjustable life

  • 70. 
    An agent wants to include an illustration written by his insurance company. Which of the following best describes the conditions under which he may use the illustration?
    • A. 

      The illustration must stay exactly as it is

    • B. 

      All changes must be submitted to the insurer before approval

    • C. 

      The illustration can only be used for a month before it requires re-approval

  • 71. 
    What is the major difference between a Stock Redemption Plan and a Cross Purchase Plan?
    • A. 

      In a Stock Redemption Plan, the policies are owned by an entity, and in a Cross Purchase Plan, the policies are owned by a corporation.

    • B. 

      In a Stock Redemption Plan, the policies are owned by a corporation, and in a Cross Purchase Plan, the policies are owned by an entity.

    • C. 

      In a Stock Redemption Plan, the policies are owned by an entity, and in a Cross Purchase Plan, the policies are owned by individuals

  • 72. 
    Which of the following characteristics applies to defined benefit plans but not defined contribution plans?
    • A. 

      Employers can choose not to make contributions for a particular year.

    • B. 

      They are subject to the rules of ERISA

    • C. 

      The amount of contributions made by the employer is determined by an actuarial formula

  • 73. 
    An insured is involved in a car accident that damages his cervical vertebrae and surrounding nerves. As a result, the insured become quadriplegic. If the policy contains a Waiver of Premium rider, which of the following statements is true regarding the policy premiums?
    • A. 

      The insured will have to pay regular premiums for 1 year, after which a reduced rate will apply

    • B. 

      The insured will have to pay regular premiums for 6 months, after which the premiums will be reimbursed and subsequent premiums will be waived.

    • C. 

      The premium rate will be substantially reduced for the rest of the insured's life.

  • 74. 
    Which of the following best describes the aleatory nature of an insurance contract?
    • A. 

      Only one of the parties being legally bound by the contract

    • B. 

      Exchange of unequal values

    • C. 

      Policies are submitted to the insurer on a “take it or leave it” basis

  • 75. 
    In life insurance policies, cash value increases
    • A. 

      Grow tax deferred

    • B. 

      Are sales-taxable

    • C. 

      Are taxed annually

  • 76. 
    Units with the same or similar exposure to loss are referred to as
    • A. 

      Homogeneous

    • B. 

      Catastrophic loss exposure

    • C. 

      Insurable risks

  • 77. 
    Which of the following applicants would NOT qualify for a Keogh Plan?
    • A. 

      Someone who works 400 hours per year

    • B. 

      Someone who has been employed for more than 12 months

    • C. 

      Someone who is over 25 years of age

  • 78. 
    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 method of dealing with risk does this scenario describe?
    • A. 

      Avoidance

    • B. 

      Reduction

    • C. 

      Retention

  • 79. 
    Which of the following statements about group life is correct?
    • A. 

      The cost of coverage is based on the ratio of men and women in the group.

    • B. 

      The policy can be converted to an individual term insurance policy

    • C. 

      The group sponsor receives a Certificate of Insurance

  • 80. 
    The annuity purchased with multiple payments, whose benefit is paid more than one year after the purchase is known as which type of annuity?
    • A. 

      Flexible Premium Immediate Annuity

    • B. 

      Flexible Premium Deferred Annuity

    • C. 

      Single Premium Immediate Annuity

  • 81. 
    Which of the following statements concerning buy-sell agreements is true?
    • A. 

      Benefits received are considered income taxable

    • B. 

      Buy-sell agreements pay in the event of a medical emergency

    • C. 

      Buy-sell agreements are normally funded with a life insurance policy

  • 82. 
    A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called
    • A. 

      Living need rider

    • B. 

      Payor rider

    • C. 

      Cost of living rider

  • 83. 
    Which of the following would NOT be considered rebating?
    • A. 

      Giving a client a $15 pen with the insurer's logo during the insurance application process

    • B. 

      Sending a gift certificate to the insured's employee after the insurance has been effected as a thank you for the referral

    • C. 

      Sharing commission with the insured

  • 84. 
     A new insurer receives a large amount of applications for life insurance. The company wants to know how much to charge in premiums so that premium amounts will be greater than the death benefits that it will pay. What tool can the insurer use to help determine premium costs?
    • A. 

      Risk chart

    • B. 

      Morbidity Index

    • C. 

      Mortality table

  • 85. 
    Which of the following would be deducted from the death benefit paid to a beneficiary, if a partial accelerated death benefit had been paid while the insured was still alive?
    • A. 

      10% federal death benefit income tax, plus the amount of the accelerated benefit

    • B. 

      Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit

    • C. 

      There are no deductions taken from death benefits

  • 86. 
    What is the major difference between a Stock Redemption Plan and a Cross Purchase Plan?
    • A. 

      In a Stock Redemption Plan, the policies are owned by an individual, and in a Cross Purchase Plan, the policies are owned by an entity.

    • B. 

      In a Stock Redemption Plan, the policies are owned by an entity, and in a Cross Purchase Plan, the policies are owned by individuals

  • 87. 
    An insured purchased an insurance policy 5 years ago. Last year she received a dividend check from the insurance company which was not taxable. This year she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
    • A. 

      Mutual

    • B. 

      Reciprocal

    • C. 

      Nonprofit Service Organization

  • 88. 
    In life insurance policies, cash value increases
    • A. 

      Are only taxed when the owner reaches age 65

    • B. 

      Grow tax deferred

    • C. 

      Are taxed annually

  • 89. 
     In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?
    • A. 

      The annuitant will receive the higher of either the guaranteed minimum rate or current rate

    • B. 

      The annuitant will always receive the current interest rate

    • C. 

      The annuitant will receive the lower of either the guaranteed minimum rate or current rate

  • 90. 
    At age 30, a man wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?
    • A. 

      Adjustable Life

    • B. 

      Single Premium Whole Life

    • C. 

      Modified Lifed

  • 91. 
    Which of the following statements about group life is correct?
    • A. 

      The cost of coverage is based on the ratio of men and women in the group

    • B. 

      The premiums are higher than in an individual policy because there is no medical exam

    • C. 

      The group sponsor receives a Certificate of Insurance

  • 92. 
    All of the following are true of Key Person insurance EXCEPT
    • A. 

      The key employee is the insured

    • B. 

      The plan is funded by permanent insurance only

    • C. 

      There is no limitation on the number of key employee plans in force at any one time

  • 93. 
    In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?
    • A. 

      The annuitant will always receive the current interest rate

    • B. 

      The annuitant will receive the lower of either the guaranteed minimum rate or current rate

    • C. 

      The annuitant will receive the higher of either the guaranteed minimum rate or current rate

  • 94. 
    What insurance concept is associated with the words "Weiss" and "Fitch"?
    • A. 

      Index used by stock companies

    • B. 

      Guides describing company financial integrity

    • C. 

      Policy dividends

  • 95. 
    In Modified Life policies, what happens to the premium?
    • A. 

      It is level at the beginning and increases after the first few years

    • B. 

      It varies at the beginning, but levels out by the end of the third year

    • C. 

      It always remains level

  • 96. 
    What is the maximum fine for violating a cease and desist order?
    • A. 

      $5,000

    • B. 

      $2,500

    • C. 

      $10,000

  • 97. 
    When would a 20-pay whole life policy endow?
    • A. 

      When the insured reaches age 100

    • B. 

      In 20 years

    • C. 

      After 20 payments

  • 98. 
    An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?
    • A. 

      Tax-sheltered account plan

    • B. 

      Profit sharing plan

    • C. 

      401(k) plan

  • 99. 
    All agents, brokers, and reinsurance intermediaries have a
    • A. 

      Fiduciary responsibility to their clients

    • B. 

      Controlled responsibility to their clients

    • C. 

      Financial relationship with their clients

  • 100. 
    What kind of policy allows withdrawals or partial surrenders?
    • A. 

      Universal life

    • B. 

      Variable whole life

    • C. 

      20-pay life

  • 101. 
    In insurance, an offer is usually made when
    • A. 

      The application is submitted

    • B. 

      The insurer approves the application and receives the initial premium

    • C. 

      The agent hands the policy to the policyholder

  • 102. 
    Which of the following are NOT fundable by annuities?
    • A. 

      Death benefits

    • B. 

      A person's retirement

    • C. 

      Cash accumulation for any reason

  • 103. 
    Which of the following statements is true concerning the Accidental Death Rider?
    • A. 

      If the death occurs within 6 months of an accident, the policy will pay a multiple of the face amount

    • B. 

      Triple indemnity policies must insure 3 individuals

    • C. 

      The policy may pay a benefit of 2 or 3 times the face amount

  • 104. 
    How does reinsurance benefit the insurer?
    • A. 

      Reinsurance frees the insurer of all liabilities

    • B. 

      With reinsurance, premiums are higher

    • C. 

      It helps protect against catastrophic losses

  • 105. 
    Randy transfers his life insurance policy to his son Andy two years before Randy's death. Which of the following is true?
    • A. 

      The interest portion of the policy will be included in Randy's taxable estate

    • B. 

      The unpaid premiums on the policy will be deducted from Randy's taxable estate

    • C. 

      The entire face value of the policy will be included in Randy's taxable estate