California Life Insurance Practice
Which statement about life insurance code and ethics is not true see acts of fair and unfair discrimination are prohibited which statement best describes agreement as it relates to contracts be one party accepts the exact terms of the other party’s offer all of the following needs to be included on an application for life insurance except D disability income insurance an insurer invests the cash value of a fixed annuity in which of the following assets D general account which of the following riders would
provide for an insured to increase the face amount of their life insurance policy without proof of insurability a guaranteed insurability future purchase option in a group life policy with a death benefit of more than $50,000 d premium cost for insurance above $50,000 is taxable as income to the employee partial payment of proceeds to cover final expenses is paid to someone not designated as a beneficiary but acting in a legal or fiduciary capacity this is provided in which provision D
facility of payment a life settlement broker D negotiates life settlement contracts between the owner and providers in order to be financially solvent an insurer must accomplish all of the following except C contribute a specific amount of capital reserves to the state that protects the proceeds of a life-insurance policy from attachment by the beneficiaries creditors after the insurance death is known as the C spendthrift trust clause the Roth and traditional IRAs have some
similarities which of the following is not true B both are tax-deductible to the investor how does the incontestability Clause benefit the insured B it keeps the policy from being cancelled if after two years it is discovered that there was an error concealment or misrepresentation by the policy owner missioner can deny an applicant for a license after a hearing D if the applicant has permitted someone in their employment to violate the California Insurance Code in the insurance planning
processes the blackout period is be the period of time after the youngest child reaches 16 but before the widow reaches 60 in which the surviving spouse receives no Social Security benefits the following statements are true about participating in non-participating policies except D non participating policies issued evidence to policy owners according to the CIC life only agents must keep records of their transactions for C five years print the code the best definitions of shell and May
are C mandatory and permissive Pete who is 35 years old has a life insurance policy with a death benefit of $150,000 at the age of 65 the cash value of his policy will be $150,000 what policy does he have B an endowment to the age of 65 while collecting underwriting information certain rules must be followed which of the following is incorrect d post claims underwriting is a valid and necessary means of determining the insurability of a potential applicant which insurance is known for having a level
premium with a fixed rate of return resulting in guaranteed cash value d whole life in contrasting stock insurers with mutual insurers which statement is not floss D stock insurers are owned by the shareholders and issue non-participating policies has purchased an annuity with an annual bonus she received at the end of last year she has requested annual benefit payments to start at the end of this year what type of annuity did she purchase si single premium immediate annuity when a client is
declined after submitting a prepaid application for life insurance si the insurance company must refund the entire premium paid which best describes industrial insurance D $2,000 or less in coverage and premiums collected by agent which of the following statements is false in regard to a life paid up at 65 whole life policy a the policy will endow at age 65 for an insurance contract utmost good faith means C each party relies upon the truthfulness of the other which of the following
are characteristics of renewable term a allows the policy owner the opportunity to renew the policy at the end of term without evidence of insurability the premium will increase which of the following statements is not included in the entire contract clause be insurer agrees to provide life insurance protection for the named insured which will be paid to a designated beneficiary when proof of death is received by the insurer which of the following transactions would most likely be declined due to lack
of insurable interest d an employee insures their employer in the fear of losing their job of the following describe differences between binding receipts and conditional receipts except be no claim is paid with either receipt until a policy is issued in life insurance beneficiary succession is the method used to determine who will receive death proceeds if the primary beneficiary is not living upon the death of the insured who will receive the payment see contingent beneficiary how does the IRS
classify the two different types of retirement accounts be qualified and non-qualified mrs. Anderson need to invest the proceeds from her late husband’s life insurance she invests a portion of the money into an annuity since she is 62 and is still working she decides to purchase a single premium deferred annuity she won’t need an income for a few more years what should the agent make sure mrs. Anderson understands see she has a 30-day free look period in case she changes her mind which of
the following are common provisions found within many life insurance policies d reinstatement entire contract incontestability Sam has a $200,000 convertible life insurance policy if he chooses he can a convert to a whole life policy for the same face amount without proof of insurability which pair activities of daily living ADL’s be mobility and bathing for a flexible premium deferred annuity the time during which the owner makes premium payments and the time before benefit payments begin is
known as the be accumulation period which of the following becomes part of the contract is guaranteed to be true and if untrue may be grounds for rescinding the policy D warranty a client’s flexible premium is invested into a separate account what type of insurance product dizzi purchase a variable universal life starting from lowest to highest rank the initial premium paid by the client for these insurance policies below a modified whole life ordinary whole life single premium whole life a
policy pays the face amount if the insured dies before a specified date or lives to that specified date this best describes D an endowment policy which action by an insurer or its representatives is not considered an unfair claims violation d an agent advises a claimant to obtain the services of an attorney I has a history of duis to his insurer they see him as underscore hazard see morale rank from lowest to highest the amount of monthly income that would result from the following annuity settlement options a life with refund option life with 10 years certain straight life the person who will receive
the benefit of an annuity and whose life the payout is based upon when the contract is purchased is the a annuitant under which life settlement option does the insurer retain the death benefit but pays the beneficiary the earnings on the death benefit a interest only option which of the following is not a qualified 1035 exchange be a variable annuity exchanged for a variable universal life policy the future account value of the annuity Alex purchased is connected to the S&P 500 index what type of annuity did he purchase a equity indexed annuity who submits a request for life insurance to a company see the applicant all of the following statements about
life insurance policy illustrations and the senior market are correct except a guaranteed elements must be emphasized in bold print what non forfeiture option allows a policy owner to use the existing cash value to purchase a policy of the same face amount as the original policy but for a reduced amount of time a extended term insurance California rules for annuity cells require all agents to present a specific disclosure document in advance to any senior citizen who is not already a client whenever a sales appointment will be conducted in the person’s home how far in advance must the prospect receive the written notice see at least 24 hours in
comparing the purchase of individual life insurance to acquiring group life which statement is not true a group insurance has a non-deductible premium while individual insurance has a tax-deductible premium to the payer which is a false statement the California Insurance Commissioner is a selected by the governor as an appointee the definition of mortality and morbidity a odds of dying versus the odds of disability all of the following statements about assignments are not false except see assignments need not be filed with the insurer if notarized and filed in county records which of the following is not excluded from the California life and
annuity replacement law a purchasing a new policy that will take the place of an existing policy a universal life policy may be surrendered for its cash value B at any time an insured has a terminal illness and needs to access one third of his death benefit to pay mounting medical expenses which rider would meet the insured’s current needs D accelerated living benefit in a non-contributory group policy a 100% of eligible employees must participate which of the following is an incorrect statement about a client’s privacy rights be a client does not have access to there might be reports as it belongs to the members life insurers an employee has lost access to their group term life insurance plan but they are allowed to convert to a new plan which best describes this new plan B the new policy will be cash value
the employee pays all the premiums Roger who is 35 years old has a whole life insurance policy with a death benefit of $150,000 at the age of 65 he will no longer make premium payments when will the cash value of his policy be $150,000 B 100 a beneficiary decides to take the option that will the largest amount per payment knowing after death no monies will be paid out to any descendants the settlement option is d Life income straight life in disability insurance the period of time between when the disability started and the commencement of benefits is tha a elimination period variable insurance and variable annuity products are regulated by
B SEC FINRA and oi Brian purchased a variable life policy and died 25 months after the issue date it is then discovered that Brian understated his age on the application what will the insurer do in regard to the payment of the death benefit to the beneficiary see the death benefit will be reduced to reflect the age discrepancy all of the following are characteristics of the social insurance program known as Social Security except be full retirement ages 65 for all persons born after 1937 at what age does Social Security Medicare program Part B start providing benefits D 65 which qualified plan is characterized by having a non deductible contribution and tax-free distribution D Roth IRA of the following which is not one of the three major loss exposures faced by insured B financial losses a policy illustration may not include D vanishing premiums if the policy becomes paid up with non guaranteed
elements paying future premiums the term aleatory is best defined by which of the following see unequal exchange in value after the insured passes away it is discovered that the policy was rated based upon an incorrect age the client lied about their age when filling out the application eight years earlier what effect will this have on the benefit a the proceeds payable will be adjusted a and O coverage B protects an agent in the case of unintentional negligence and who knowingly misrepresenting information for the purpose of inducing a client elapsed forfeit change or surrender a life insurance policy or annuity has committed an illegal practice known as be twisting which of the following can be written as a group policy a credit life all of the following statements about a policy grace period are false except be grace periods are typically 31 days which of the following is
considered ordinary insurance see mortgage Redemption a client has missed her premium payment on her cash value policy and the grace period has also lapsed the policy is still enforced because her insurer has been deducting the cost of the premium from her cash value what provision allows this be automatic premium loan according to the code any person legally capable of making an insurance policy is considered C an insurer in insurance the agents have authorization to represent the company the producers may exercise this relationship through a Express Authority implied authority and apparent Authority Gloria owns an annuity in which she has invested five thousand dollars a year for ten years she is currently receiving
eight thousand dollars annually from her annuity by the time all of the principal and interest is paid out Gloria will have been paying $100,000 how much of the annual benefit is taxable d $4,000 all of the following statements about policy provisions are true except C death during the grace period results in a full death benefit being paid and follows the rules and terms of his agent contract he is exercising his underscore authority be Express which type of insurer requires an attorney in fact overseen by an advisory committee of subscribers d reciprocal insurer which of the following is not an acceptable underwriting classification d declined when an applicant makes a material statement believed to be true to the best of their knowledge the statement is
considered to be a and B representation under the cost-of-living adjustment writer the policy a will only increase with the inflation rate there will be an additional premium charged but no evidence of insurability is required statements about life insurance settlement options are false accept a life income with ten years certain provides at least 120 months of payments candy owns a participating whole life policy and uses her policy dividends to buy more of the same type of coverage for herself candy has chosen the D paid-up Editions option which of the following characteristics would not stop an insurance company from accepting an insurance risk the item to be insured B is part of a large group of homogeneous exposure units concerning qualified plans which statement is Floss C is ops invest in a portfolio of stocks elected by the employer which of the following statements about the process
of replacement is incorrect be copies of any written illustration or comparisons used in the process of making the replacement do not need to be included with the submitted application the following statements about survivorship life are true except D the face amount is payable after the first death what type of insurance would a person select as the most efficient method of paying the outstanding debt on their home in the event of death C mortgage redemption decreasing term mortgage protection in which type of policy does the insurer apply flexible premium to pay for the cost of insurance and expenses and then uses the remaining balance plus interest to build the cash value account C universal life the insured dies six months after the
policy issue date upon death of the insured it is determined that the applicant made a material misstatement on the application what is the most likely course of action for the insurer C rescind the policy Tommy Greene has a CLIA certification which of the following names would automatically approve for use as his agency’s name C none of the would ever be automatically approved an applicant for an insurance license has had a previous application for a professional license denied for cost within the last five years the Insurance Commissioner will D deny the application without hearing all of the following are true about key person insurance except D the death benefit is taxable to the business upon the death of a primary breadwinner who is fully insured under Social Security a dependent child is eligible to receive an income benefit until the age of B 18 or 19 if unmarried and a student in elementary or secondary school
members of the MIB are required to report D medical conditions found during underwriting which of the following would not be considered a speculative risk a any action that could do home to your clients well-being such as reckless driving any person to whom the Commissioner has issued a seizure order and who refuses to deliver any books records or assets of an insurer faces D a misdemeanor punishable by fine up to $1,000 a year in jail or both how many hours of continuing education are required per renewal for a life only agent B 24 hours four of the hours must be in ethics what is not likely to happen with the return of premium policy be the total premiums paid is returned to the insured when the policy is canceled is an accurate description of life insurance policy dividends D they are not taxable and are not
guaranteed all of the following statements about mutual insurance companies are correct except D policy dividends issued by mutual companies are guaranteed and not taxable which statement is false concerning insurance company regulations C and insurer suffering from an impairment of their minimum required paid in capital is labeled solvent the following statements about agents are true except be exclusive agents work for themselves at age 72 mrs. Smith is considering applying for medi-cal so she can afford her medical bills today agent Charles is visiting her home and wanting to sell her an annuity product which of the following is true d agent Charles
cannot allow mrs. Smith to purchase an annuity if after the purchase mrs. Smith wouldn’t qualify for medical afore Nia premiums paid into a variable annuity purchase which of the following d accumulation units a client receives the lump sum inheritance he’d like to use some of the money to create a lifetime income since he’ll be retiring soon he purchases an annuity and wishes to receive payments beginning in two months what did he buy B single premium immediate annuity your policy contains the guaranteed insurability writer when can you purchase additional insurance on you policy C without evidence of insurability at specified ages or dates which statement below is least correct regarding the type of insurance that fits best were the applicants needs a convertible term can be purchased by applicants who
may require a larger death benefit in the future the following our dividend options except the interest only option under the terms of the 10-day free look period a claim will be paid B if the premium has been paid and the policy has not been returned to authorize the release of an attending physicians report the applicants must be sign or consent form when a policy continues because of a payer benefit clause it means be the owner of the policy is disabled or has died what is the of members required for group life insurance D 10 the applicant works two different jobs the underwriter will rate him according to which job B the job that is most hazardous which of the following cannot be used in a policy illustration if non-guaranteed elements are intended to pay future premiums a vanishing premiums which statement about reinstatement is floss a the reinstated policy is incontestable if the first time it was in
force it already passed the two-year mark any person who misappropriates fiduciary funds for personal use is guilty of a theft agent Daren offers life insurance for no cost to people buying property in a local development when the Commissioner investigates his actions which of the following is not a likely consequence see Darren will be charged with a felony and/or up to ten years in jail what is the usual federal income tax treatment of individual life insurance d non deductibility of premiums non-taxable death benefits according to the California Insurance Code what information is the agent required to include on their business card see all of these a policy owner who cannot bro the equity change beneficiaries a sign of policy or stop paying premiums without the beneficiary’s written consent has designated the beneficiary as n C irrevocable beneficiary every admitted insurer in California must
maintain a unit or department responsible for investigating which of the following D possible fraudulent claims by the insured the entire contract can include many components which of the following cannot be a part of the entire contract a any document referenced by the policy a life only agent issues a binding receipt to his client since the client did include a check for the initial premium with his completed application which is true D the agent faces potential suspension or revocation of their license which party has the legal authority to name or change the beneficiary D policy owner according to the California toy an insurer whose Articles of Incorporation are registered in Oslo Norway is considered a an alien insurer profit-sharing plans D allow for a contribution of a specified proportion of company profits a 45 year old investor has been laid off from his job in order to pay bills he takes a premature distribution from his traditional IRA account what tax penalties if any will he face D he will be required to pay a 10% tax penalty on the amount withdrawn Bob and Neil are partners in a law firm together if one of them were to pass away they want to make
sure that their surviving family will receive a fair value for their stake in the business what life insurance arrangement would be most suited for transitioning the business during this time of loss a buy-sell agreement in a seven-year vesting schedule what percentage of employer contributions is vested after seven years see 100% which of the following statements about a resident life only agent licensing is incorrect a a licensee has 30 days to update a change in address which of the following is not a personal use of life insurance be a client buys insurance to fund a buy sell agreement which statement is not true about insurance sales see brokers represent insurers in negotiating coverage with various insurance where the risk is increased by slippery floors a habit of lying or reckless drunk driving are best described by which of the following a a hazard which rider pays a multiple of the original phase amount D
accidental death benefit term insurance is best described by which of the following D provides temporary protection builds no cash value is less expensive and may be renewed the right to know that the insurance company will collect certain personal information about their credit character and reputation the insurer may gain such information from a a consumer report which of the following is most likely to have a DSA a school district employee after 12 years the policy owner decides she no longer needs the large death benefit on her whole life policy she calls you her agent and you tell her she can use the reduced paid up non forfeiture option which of the following is not true about the new policy see the new policy will expire in ten years Ashley the
policy owner and insured named windowless primary beneficiary and Barbara as contingent beneficiary just six weeks prior to Ashley’s death Wendell and Barbara are killed in a common disaster the insurance proceeds will be received by whom a Ashley’s estate of the following which best describes the difference between life and shuriken and annuities D life insurance creates an instant estate while annuities liquidate a sum of money fishy airy chooses to receive the policy proceeds in the form of monthly income at the rate of $3,000 per month until principal and interest are exhausted what settlement option
