Practice Exam 8 - Life Insurance

42 Questions | Total Attempts: 132

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Practice Exam Quizzes & Trivia

Questions and Answers
  • 1. 
    The rules regarding life insurance policy illustraitions are intended to ensure all of the following , except:
    • A. 

      Ensure that illustrations are understandable by prescribing standard formats to be followed when illustrations are used

    • B. 

      Ensure that illustration do not mislead purchasers of life insurance and annuities

    • C. 

      Ensure that the disclosures that are required in connection to illustrations are specified

    • D. 

      Ensure that the illustration specifies that both guaranteed and non-guaranteed elements will continues unchanged for all years shown

  • 2. 
    If an insurer inadvertently is found guilty of unfair trade practices while issuing renewing, and servicing a policy, the issurer could be prosecuted for how many violations?
    • A. 

      4

    • B. 

      3

    • C. 

      1

    • D. 

      0

  • 3. 
    An insurer owned by a parent company that provides insurance to voer the parent company's loss exposures is a:
    • A. 

      Reciprocal insurer

    • B. 

      Captive insurer

    • C. 

      Mutual insurer

    • D. 

      Stock insurer

  • 4. 
    Which of the following is not excluded by group life?
    • A. 

      War

    • B. 

      Military service

    • C. 

      Aviation

    • D. 

      Accidental injury

  • 5. 
    The MINIMUM number of employees for group life insurance in California is:
    • A. 

      10

    • B. 

      50

    • C. 

      2

    • D. 

      100

  • 6. 
    Which of the following could be used to pay off the mortgage on a home, providing a death benefit that equals the amount of outstanding debt on the home, no more and no less?
    • A. 

      Home service insurance

    • B. 

      Decreasing insurance

    • C. 

      Home warranty

  • 7. 
    What does the phrase "life insurance creates an immediate estate" mean?
    • A. 

      The total death benefit will be paid to a beneficiary on the death of the insured

    • B. 

      The death benefit will always be paid to the estate of the insured

    • C. 

      The total premium must be paid to the insurer

    • D. 

      The policy creates cash value

  • 8. 
    Every insurer offering individual life insurance policies or annuities to senior citizens that use none-guaranteed elements in illustrations must provide a statement to that effect. Which of the following is correct regarding this statement?
    • A. 

      Non-guaranteed elements must be in bold print

    • B. 

      Guaranteed and non-guaranteed elements must be in bold print, at the discretion of the agent.

    • C. 

      Guaranteed elements must be in bold print and non-guaranteed elements must be in plain type

    • D. 

      All statements must be in plain type

  • 9. 
    The usual amount of death benefit in an industrial life insurance policy is
    • A. 

      $10,000 to $25,000

    • B. 

      $50,000-$100,000

    • C. 

      Less than $2,000

    • D. 

      $100,000

  • 10. 
    Which of the following allows employees to share in the financial success of the company?
    • A. 

      Tax-sheltered account

    • B. 

      Simplified employee pension plan

    • C. 

      Keogh plan

    • D. 

      Profit-sharing plan

  • 11. 
    In which of the following qualified pension plans are benefits linked tot he employee's years of service and / or amound of compensation?
    • A. 

      Defined benefit plan

    • B. 

      Keogh plan

    • C. 

      Defined contribution plan

    • D. 

      Tax-sheltered account

  • 12. 
    The Social security age of retirement is dependent upon:
    • A. 

      The individual's date of birth

    • B. 

      The amount of compensation earned prior to retirement

    • C. 

      The number of quarters earned

  • 13. 
    Life insurance illustrations showing premiums, values, credits or charges that are not determined at issue demonstrate:
    • A. 

      Non-Guaranteed elements

    • B. 

      Guaranteed elements

    • C. 

      Minimum assumed expenses

    • D. 

      Supplemental illustrations

  • 14. 
    An ESOP invests in:
    • A. 

      Employer stock

    • B. 

      Mutual funds

    • C. 

      Corporate bonds

    • D. 

      Employer's investments

  • 15. 
    When an insurer presents an illustration for life insurance, all of the following are prohibited, except:
    • A. 

      Stating that the amount of non-guaranteed elements is guaranteed

    • B. 

      Using the insurer's "disciplined current scale" in the illustration

    • C. 

      Including a description of a "vanishing premium"

    • D. 

      Providing the applicant with an incomplete illustration

  • 16. 
    In a group lofe plan, unmarried children may be covered as dependents until age:
    • A. 

      19

    • B. 

      20

    • C. 

      21

    • D. 

      22

  • 17. 
    An insurance company which is owned by individuals who purchase shares of stock, in the company, share in profits in proportion to shares owned, and vote for a board of directors is known as what type of insurer?
    • A. 

      Lioyd's of London

    • B. 

      Fraternal insurer

    • C. 

      Mutual insurer

    • D. 

      Stock insurer

  • 18. 
    Eligibility for Social Security retirement benefits is based on:
    • A. 

      The worker's age at retirement

    • B. 

      The number of quarters earned

    • C. 

      The worker's date birth

  • 19. 
    All of the following apply to an insurance broker (not an insurance agent), Except:
    • A. 

      A broker represents the insured

    • B. 

      A broker can charge a fee to the insured

    • C. 

      A broker is appointed by an insurer to transact insurance

    • D. 

      A broker acts on behalf of an insurer

  • 20. 
    In order ot qualify for social security retirement benefits the worket must be:
    • A. 

      Fully insured

    • B. 

      Disability insured

    • C. 

      Currently insured

    • D. 

      Partially insured

  • 21. 
    All of the following are covered by the CLHIGA, except:
    • A. 

      Individual annuities

    • B. 

      Employer self-funded plans

    • C. 

      Group term insurance

    • D. 

      Disability income

  • 22. 
    Which of the following is NOT covered by the CLHIGA?
    • A. 

      Direct group life insurance

    • B. 

      Individual (non group) health insurance

    • C. 

      Group stop loss plans

    • D. 

      Individual term life

  • 23. 
    In a group life policy with a death benefit of more than $50,000:
    • A. 

      Premium cost is not taxable

    • B. 

      Premium cost for insurance above $50,000 is taxable as income tot he insured

  • 24. 
    When a corporation ceases to exsit entirely, their insurance license:
    • A. 

      Is suspended temporarily

    • B. 

      Becomes inactive

    • C. 

      Terminates unless the corporation files an application to continue to transact within 30 days

    • D. 

      Terminates

  • 25. 
    If a insurer knowingly allows one of its agents to misled a member of public in order to induce the person to change thier existing insurance, the Commissioner may:
    • A. 

      Suspend the insurer's certificate of authority for the class of business involved

    • B. 

      Impose a $1,500 fine

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