Extra Questions

Question 1

What rider allows the policyowner to purchase specific amounts of additional insurance at specific dates or events, without proving continued insurability?

Answer 1

Guaranteed Insurability rider

Question 2

As part of the continuing education requirement, what is the minimum number of hours of continuing education specific to long-term care insurance to be completed prior to each license renewal?

Answer 2

8

Question 3

The interest earned on policy dividends is ________

Answer 3

taxable

Question 4

a return of unused premiums on which the insured has already paid taxes

Answer 4

dividends

Question 5

Which policy component decreases in decreasing term insurance?

Answer 5

face amount

Question 6

What happens when a policy is surrendered for its cash value?

Answer 6

Coverage ends and the policy cannot be reinstated.

Question 7

An agent who violates the replacement provision of the Code will be fined a $____ for the first offense

Answer 7

$1,000

Question 8

An insurance company that violates the replacement provision of the Code will be fined $_____ for the first offense

Answer 8

$10,000

Question 9

considered refund of unearned premium

Answer 9

dividends

Question 10

Department that is responsible for developing mortality and morbidity tables, calculating premiums and dividends, and preparing annual reports

Answer 10

actuarial

Question 11

an increasing term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid.

Answer 11

Return of premium (ROP) life insurance

Question 12

court actions which increase the likelihood or size of a loss

Answer 12

Legal hazard

Question 13

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

Answer 13

3 days

Question 14

What component increases in the increasing term insurance?

Answer 14

death benefit

Question 15

availability of cash to the insured

Answer 15

liquidity

Question 16

Who’s general duty or power is it to develop laws?

Answer 16

State Legislature

Question 17

Who’s general duty or power is it to enforce laws?

Answer 17

Commissioner

Question 18

What 3 things are funded by annuities?

Answer 18

A person’s retirement, estate liquidation, cash accumulation for any reason

Question 19

What results from three basic desires of the insured: to reduce expenses and improve cash flow, to increase control of claim reserving and claims settlements, and to fund losses that cannot be insured.

Answer 19

retention

Question 20

What determines whether an insurance policy is “over-funded” or if it’s a Modified Endowment Contract

Answer 20

Seven-pay Test

Question 21

How often must every insurer doing business in California report its financial condition to the Commissioner?

Answer 21

Each year, on or before March 1

Question 22

The period of time during which a binding receipt covers a policyholder

Answer 22

temporary term period

Question 23

Units with the same or similar exposure to loss

Answer 23

homogeneous

Question 24

“by the head”

Answer 24

per capita

Question 25

Who is protected by a Temporary Insuring Agreement?

Answer 25

The applicant and the insurer

Question 26

What insurance option would be considered a risk-sharing arrangement?

Answer 26

Reciprocal

Question 27

Upon policy delivery, the producer may be required to obtain what 3 things?

Answer 27

Delivery receipt, statement of good health, payment of premium

Question 28

In a group life insurance policy, the employer may select three things?

Answer 28

The premium payor, the type of insurance, the amount of insurance

Question 29

Examples of risk retention

Answer 29

Deductibles, copayments, self-insurance.

Question 30

What kind of annuity is it when the owner is guaranteed a fixed interest rate for a specific period of time?

Answer 30

modified guaranteed annuity

Question 31

Why is an equity indexed annuity considered to be a fixed annuity?

Answer 31

It has a guaranteed minimum interest rate.

Question 32

The Waiver of Cost of Insurance rider is found in what type of insurance?

Answer 32

Universal Life

Question 33

In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?

Answer 33

Executive is the owner, and the executive pays the premium.

Question 34

According to CIC 783, after a hearing, the Commissioner may suspend the license of any such person for violating provision relating to misrepresentation for a period of ______

Answer 34

3 years

Question 35

Unassigned funds that are required to be reported on the insurer's annual statement.

Answer 35

Earned Surplus

Question 36

Any insurance agent who commits a repeated violation of the Insurance Code with respect to insurance replacement will be liable for _________.

Answer 36

An administrative penalty of no less than $5,000 and no more than $50,000 per violation.

Question 37

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

Answer 37

5 days

Question 38

only one of the parties to the contract is legally bound to do anything

Answer 38

unilateral insurance contract

Question 39

Another term for the cash payment settlement option

Answer 39

Lump sum

Question 40

intentional withholding of information by the insured that is material to the insurer

Answer 40

concealment

Question 41

The owner of an adjustable life policy has four privileges:

Answer 41

increasing or decreasing the premium, changing the premium-paying period, increasing or decreasing the face amount of coverage, or changing the period of protection

Question 42

collects any charges the insured owes, processes and settles claims, and acts as a fiduciary for the insured and the insurer

Answer 42

administrator

Question 43

The agent’s role to act in the insured’s best interest is called?

Answer 43

The fiduciary duty

Question 44

When can the frequency of premium payments be changed?

Answer 44

on the policy's anniversary date

Question 45

This rider annually adjusts the policy’s face value in accordance with the national rate of inflation or deflation

Answer 45

Cost of Living

Question 46

Retention usually results from three basic desires of the insured:

Answer 46

to reduce expenses and improve cash flow, to increase control of claim reserving and claims settlements, and to fund losses that cannot be insured

Question 47

A tax-sheltered annuity is a special tax-favored retirement plan available only to _____________

Answer 47

certain groups of employees

Question 48

The Human Life Value Approach to determining the value of an individual’s life requires the calculation of _____________

Answer 48

probable future earnings of the insured, which involves wages, expenses, inflation, amount of time until retirement, and the time value of money

Question 49

What type of risk will result in the highest premium

Answer 49

Substandard

Question 50

insures the life of a homeowner for an amount equal to his mortgage

Answer 50

Mortgage Redemption

Question 51

not securities, but these annuities invest on a relatively aggressive basis to aim for higher returns

Answer 51

Equity Indexed Annuities

Question 52

All records relating to insurance application must be maintained for _____

Answer 52

5 years after policy delivery or initial application

Question 53

The Medical Information Bureau (MIB) was created to protect

Answer 53

Insurance companies from adverse selection by high risk persons

Question 54

What rider pays 2 or 3 times the face amount if death is the result of an accident as defined in the policy and occurs within 90 days of such an accident.

Answer 54

Accidental Death rider

Question 55

What kind of policy issues certificates of insurance to insureds?

Answer 55

Group insurance

Question 56

According to CIC 16, the word “shall” describes ______ actions, and the word “may” describes _______ actions unless otherwise apparent from the context.

Answer 56

mandatory, permissive

Question 57

Beneficiary designations

Answer 57

primary or contingent, secondary and tertiary

Question 58

the agent may continue to operate under the expired license for a period of ______ as long as the application for renewal has been filed and renewal fee paid.

Answer 58

60 days

Question 59

In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse turns age 60 called?

Answer 59

Blackout Period

Question 60

closest term to an authorized insurer

Answer 60

admitted

Question 61

Any agent violating the misrepresentation provisions is guilty of a misdemeanor and punishable by a fine not to exceed

Answer 61

$25,000 (for losses less than $10,000), and/or by imprisonment not to exceed 1 year

Question 62

What is the purpose of a suicide provision within a life insurance policy?

Answer 62

To protect the insurer from persons who purchase life insurance with the intention of committing suicide

Question 63

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Answer 63

Waiver of premium

Question 64

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?

Answer 64

Insuring clause

Question 65

a short-term annuity that limits the amounts paid to a certain fixed period or until a certain fixed amount is liquidated

Answer 65

Annuity certain

Question 66

What law states that a deferred annuity must have a guaranteed surrender value that is available if the owner decides to surrender the annuity prior to annuitization

Answer 66

nonforfeiture law

Question 67

determined not by the event, but solely by the influence of the facts upon the party to whom the communication is due, in forming his/her estimate of the disadvantages of the contract.

Answer 67

Materiality

Question 68

Any domestic insurer issuing variable contracts must establish one or more ________ accounts

Answer 68

separate

Question 69

Which component increases in the increasing term insurance?

Answer 69

Death benefit

Question 70

The law will assume that the primary beneficiary dies first as long as the beneficiary dies within this specified period of time following the death of the insured (usually 30 days).

Answer 70

Common Disaster

Question 71

This settlement option provides a single beneficiary with income for the rest of his/her life.

Answer 71

Single Life

Question 72

When coverage is effective immediately

Answer 72

Written binder

Question 73

What two terms are associated directly with the premium?

Answer 73

level or flexible

Question 74

What individual must have insurable interest in the insured?

Answer 74

policyowner

Question 75

What is the waiting period on a Waiver of Premium rider in life insurance policies?

Answer 75

6 months

Question 76

For a retirement plan to be qualified, it must be designed for the benefit of

Answer 76

employees

Question 77

protection period offered by binding receipts

Answer 77

temporary term

Question 78

The dividend option in which the policyowner uses dividends to purchase a term policy for one year

Answer 78

One-year term option

Question 79

Section 10128.2 of the CIC uses the word _________ to refer to the length of such an extension.

Answer 79

“reasonable”

Question 80

The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured

Answer 80

Spendthrift clause

Question 81

This department is responsible for developing mortality and morbidity tables, calculating premiums and dividends, and preparing annual reports.

Answer 81

Actuarial