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Illinois Statutes and Regulations + Taxes, Retirement and Other Insurance Concepts + Policy Rid Flashcards | StudBud
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Illinois Statutes and Regulations + Taxes, Retirement and Other Insurance Concepts + Policy Rid
Illinois Statutes and Regulations + Taxes, Retirement and Other Insurance Concepts + Policy Rid
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1
Which of the following statement concerning rebating is FALSE?
Both the offer and acceptance of a rebate are illegal
an unfair practice of rebating is not entitled to receive anycommission
Rebates may include special favors or services to a policyowner
Rebating is considered a Class 4 felony in the state of Illinois
2
An Immediate Annuity has no accumulation period which means it can only bepurchased
Within 30 days of the annuitant owner’s 65th birthday.
With a single premium.
With a flexible premium.
With a level premium.
3
The misstatement of age and gender provision gives the insurance company the right todo which of the following?
Refund premiums
Reject the claim
Cancel the contract
Adjust the death benefit
4
Offering to return a portion of the premium to an applicant as an inducement to buyinsurance is an illegal act known as
Intimidation
Coercion
Twisting
Rebating
5
An individual may obtain a temporary insurance producer’s license without passing thelicensing examination if the person
Is taking insurance courses at a university
Is a deceased licensed producer’s next of kin
Has met the minimum experience requirement
Holds a license in another state
6
Accelerated Death Benefit are Taxable
False
True
7
Which type of beneficiary designation cannot be changed without the consent of the beneficiary?
Primary
Contingent
Irrevocable
Revocable
8
Changes to a written life insurance application must be
Approved by the underwriters.
Approved by the company’s regional vice president.
Initialed by the agent only.
Initialed by the applicant.
9
presentation/depiction that includes nonguaranteed elements of a policysingle/group life insurance over period of years
Disclosure
Buyer’s Guide
Illustration
Policy Summary
10
Policy Loan are never taxable
True
False
11
Who must sign the application?
The insurer and the agent
The applicant and the insurer
The insured and the beneficiary
The Agent and the owner
12
After a hearin, a cease & desist order is issued, what penalty for violatingthe cease & desist order from the Director?
$5,000 for each violation
$2,500 for each violation
$10,000 for each violation
$1,000 for each violation
13
The type of policy that can be changed from one that does not accumulate cash value toone that does is a
Renewable term policy
Convertible term policy.
Level term policy.
Whole life policy.
14
What type of policy is considered temporary protection?
Whole life
Variable life
Universal life
Term life
15
An insured agreed to pay premiums for 20 years, after which she will still be covered toage 100. She purchased a
Whole life policy.
Adjustable life policy.
Endowment.
Limited pay policy.
16
Which of the following will receive the death benefit if the insured and the solebeneficiary both die together?
The next of kin of the insured
The insurer
The insured’s estate
The beneficiary’s estate
17
The most common type of whole life insurance where premiums are payable over thewhole life of the insured to age 100 is
Life paid up premium.
Singe Premium Whole life.
Limited Payment.
Ordinary Whole Life.
18
Fully insured-40 quarters of coverage(10 years of work)entitled toreceive SSI retirement,Medicare, and survivor benefits
True
False
19
A group life insurance program in which the employer pays all of the premium would beall of the following EXCEPT
An example of third-party ownership.
Noncontributory.
A conditional contract.
Contributory.
20
Social Security Benefits Provided all except
Disability
Retirement
Employment
Survivor
21
When must insurable interest exist?
When the agent helps the applicant complete the application
When the policy is delivered by the agent
When the executor sends the death certificate to the insurer
When the policy is approved by underwriting
22
The person who negotiates a viatical settlement contract on behalf of the insured is a/an
Viatical broker
Viatical provider
CPA
Viator
23
Which of the following life insurance policies will provide coverage beyond the end ofthe premium payment period?
Annually Renewable Term to Age 65.
20-Pay Whole Life.
Straight Life.
20 Year Term.
24
Which of the following is NOT a responsibility of an insurance producer whenconducting life insurance business?
Explaining the policy provisions, exclusions, and any ratings to the client
Delivering the insurance contract to the policyowner in a timely manner
Determining the insurability & risk classification of the proposed insured
Submitting the application to the insurance company for review
25
Are these true about life settlements?
True
False
26
Withdrawals _?_ penalty for monies withdrawn before age _?_
100%, 55
10% , 59 1/2
20%, 70
5% , 65 1/2
27
Which type of insurance would be most appropriate to use to pay off a mortgage in casethe insured dies prematurely?
Annually renewable term
Whole life
Decreasing term
Survivorship
28
What does the viator receive when selling a life policy to a viatical provider?
The death benefit minus the fees charged by the viatical provider
The cash surrender value of the policy
A percentage of the policy’s face value
The full face amount of the policy
29
An annuity whose return is based on an index like the S&P 500 is called a/an
Immediate annuity.
Indexed annuity
Variable annuity.
Deferred annuity.
30
an arraignment where investors persuade individuals to take outnew policies and name the investors as beneficiaries?
STOLI
Indexed Life
Variable Life
Survivorship Life
31
Statements believed to be true to the best of one’s knowledge are
Guarantees
Warranties
Representations
Waivers
32
If agent accepts a completed application without the first premium, when doescoverage become effective for the insured?
When the company approves the application
When the last outstanding medical requirement is completed
When the company receives the application
When the policy is delivered, and the first premium is paid
33
Who can designate the beneficiary of a Key Person Insurance policy?
Company
Insured
Family member
Insurer
34
The primary purpose of the Illinois life insurance and annuity replacement regulations isto
Stop insurers & producers from replacing existing life insurance policies.
the replacement is appropriate & in the best interests of the policyowner.
Prohibit the replacing of existing life insurance or annuity contracts.
Protect insurance companies from bankruptcy and insolvency.
35
Licensed producers must complete how many hours of ethics continuing educationbefore each license renewal?
8 hours
2 hours
3 hours
6 hours
36
If a policyowner transfers all rights to a policy to another party, what type of assignmentwould this be?
Bilateral
Collateral
Unilateral
Absolute
37
The Director of Insurance can do all of the following EXCEPT
Change the laws to better ensure that the companies remain solvent , etc
Examine the qualifications, financial status and conduct of insurers.
Conduct hearings & investigate the affairs of any person engaged insurance.
Regulate insurance companies, agents, brokers, and advisers.
38
A payor benefit rider is used to keep what type of policy in force?
Any term policy
Any permanent policy
A juvenile policy
A whole life policy
39
whole L.P and a waiver of premium rider suffers a disability causes her insurance company to waive her premium payments,
Her death benefit will be reduced by the amount of her unpaid premiums.
no change in her policy’s rates, & no longer has to pay the premuims
cash value will continue to grow, but at a slower rate
She will automatically become eligible for Accelerated Death Benefits.
40
The Illinois Life & Health Guaranty Association affect life and health insurancecompanies
That become insolvent due to bankruptcy of the insurance company
When producers refer to themselves as financial advisors
That are members of the Medical Information Bureau
That are not authorized to transact insurance business in Illinois
41
The life solicitation rule applies to all of the life insurance sales EXCEPT for
Limited Pay Whole Life
Annuities
Term Insurance
Universal Life
42
Selling which of the following polices would require a license issued by FINRA?
Interest Sensitive Whole Life
Universal Life
Convertible Term
Variable Universal Life
43
All of the following information must be contained in a Policy Summary EXCEPT
The name and address of the agent.
The generic name of the basic policy.
cash value/surrender value/death benefit figures for specific policy years.
A statement of guaranteed dividends available under the policy.
44
Which of the following is a Nonforfeiture Option that provides continuing cash valuebuildup?
Cash Surrender
Extended Term
Deferred Annuity
Reduced Paid-Up
45
The name of the federal law governing the collection, dissemination, and the use ofconsumer information is the:
The Consumer Privacy Act.
McCarran-Ferguson Act.
Fair Credit Reporting Act.
Consumer Protection Act.
46
A legal contract in which only one party makes a legally binding promise is
Unilateral.
Adhesion.
Conditional.
Aleatory.
47
In the formation of a legal contract, each party must give something of value. Undercontract law, this is referred to as
Indemnity.
Consideration.
Agreement.
Adhesion.
48
Who is first in line to receive the death benefit from a life insurance policy?
The Primary beneficiary
The Contingent beneficiary
The Secondary beneficiary
The Tertiary beneficiary
49
A person or an entity guilty of defamation will be subject to a penalty of a maximum of
$1,000
$5,000
$2,500
$10,000
50
Currently insured(or partially insured)–6 quarters of coverage during a13-quarter period; only entitled to some benefits
True
False
51
The term that refers to the unequal exchange of values given between the two parties in acontract is
Aleatory.
Adhesion.
Conditional.
Avoidable.
52
The process of taking financial proceeds from illegal activities and placing them into financial systems to disguise?
Funds Washing.
Money Laundering.
Dollar Cleaning.
Securities Scrubbing.
53
All of the following are Unfair Claims Settlement Practices EXCEPT
Denying a claim not covered under the policy
Forcing an insured to sue by offering less than what the claim is worth
Delaying payment by requiring duplicate proof of loss verification
Not responding promptly when a claim is submitted
54
Which one is not a part of CRAPPO?
Paid-up Insurance
Paid-up Additions
Reduced Paid-up
Accumulation at Interest
55
Universal life is a combination of
Indexed life and a cash account.
Annually renewable term and a cash account.
Level term and indexed life.
Whole life and a cash account.
56
the following retirement plans is a special tax favored plans for nonprofit,charitable, educational or religious groups?
Tax sheltered Annuity 403(B)
401k
Simplified Employee Pension
HR10/Keogh
57
The period of time during which money is paid into an annuity and interest is earned iscalled the
Annuity period.
Accumulation period.
Periodic premium payment period.
Installment refund period.
58
A life settlement option that pays out the death benefit incrementally, in a specified$until all proceeds are exhausted
Fixed-amount Installments.
Interest Only.
Life Income.
Fixed-period Installments.
59
Which of the following is NOT a duty of an insurance producer when replacing anexisting life insurance policy?
Provide the applicant with a copy of the signed replacement notice.
Obtain all existing life insurance and/or annuity policies to be replaced.
Cancel the existing policy for the policyowner to prevent over-insurance.
Submit a signed Notice Regarding Replacement to the insurance company.
60
Social security covers all of the following benefits EXCEPT
Retirement.
Disability.
Survivor benefit.
Unemployment.
61
An agreement between co-owners of a business allowing the surviving partners topurchase a deceased partner’s share is
Qualified Plan
Key Person Policy
Buy-Sell Agreement
Buy-Sell Agreement
62
a life insurance policy state that a copy of the application alongwith any riders and amendments is part of the contract
Insuring clause
Incontestable clause
Consideration clause
Entire contract clause
63
insured to purchase additional coverage $ at specifiedfuture dates or specific events without evidence of insurability
Guaranteed insurability
Payor rider
Waiver of premium
Accelerated death benefit
64
Which of the following is NOT a requirement for the reinstatement of a life insurancepolicy?
Pay interest on the past due premium
Pay all past due premium
Provide evidence of insurability
Make a collateral assignment of the C.V the policy to the insurance company
65
Any person making maliciously critical/derogatory statements about any personengaged in the insurance business is guilty
Defamation
Illegal inducement
Coercion
Discrimination
66
Which of the following is true about the Spouse Term Rider?
The coverage can continue until age 100.
There is no proof of insurability.
The coverage is usually level term insurance.
The amount of coverage is unlimited.
67
It is illegal to discriminate against a person for all of the following reasons EXCEPT
Gender
National origin
Poor risk
Race
68
wants to convert a lump sum of money to purchase an annuity that willprovide an immediate, guaranteed income for life is
A Deferred Premium Annuity
A Single Premium Annuity
A Straight-Life Annuity
A Level Premium Annuity
69
If a life policy does not pass the “seven-pay test”, that policy is considered
Null and void (N&V).
A Level Premium Deferred Annuity (LPDA).
A Modified Endowment Contract (MEC).
A juvenile policy (JP).
70
What is the continuing education requirement for life insurance producers?
24 hours every 2 years
20 hours every 2 years
12 hours every year
24 hours every 3 years
71
A contract that can provide income for life and protect against outliving your money isa/an
Investment contract.
Annuity.
Life insurance.
Indemnity contract.
72
All of the following are true about Long Term Care riders EXCEPT
LTC payments will reduce the death benefit to the beneficiary.
LTC takes care of expenses in a nursing or convalescent home.
LTC pays a portion of the death benefit in advance.
LTC will only pay benefits if the insured is under age 65.
73
Which element of contract law requires that contracts must no go against public policy,must have insurable interest, and
Legal purpose
Indemnity
Acceptance
Consideration
74
While soliciting insurance or transacting insurance business for insurancecompanies, agents represent
Themselves
The clients
The insurance agency
The insurer
75
Issuing/circulating illustrations/sales materials that are false/misleadingconcerning policy benefits/terms in order
Rebating
Misrepresentation
Replacement
Defamation
76
A life insurance death benefit paid in a lump sum to a beneficiary is
Subject to federal taxes only.
Not subject to estate taxes but subject to federal taxes.
Not subject to income taxes.
Subject to federal, state, and estate taxes.
77
The MIB is all of the following except
A membership corporation
A nonprofit trade organization
An independent investigating firm.
An aid to help insurers evaluate firm.
78
How often does the Director examine the insurer’s books & records to ensurecompanies remain solvent & conduct business
Every 5 years
At least once every 7 years
Each year
At least once every 10 years
79
The practice of terminating an existing policy or letting it lapse and exchanging it with a new one is called
Replacement.
Solicitation.
Transference.
Illustration.
80
In the Variable Life Policy, where are premiums deposited after expenses are deducted?
The Variable Fund account
The separate account
The SEC account
The general account
81
If an insured buys a life insurance policy and commits suicide within the time stipulatedin the suicide clause?
Pay a portion of the death benefit to the beneficiary
Return premium paid to the beneficiary
Pay the death benefit in full to the beneficiary
Return premium with interest to the beneficiary
82
The policy that covers 2 or more lives and pays on the death of the last insured is
Joint life.
Survivorship life.
Juvenile life.
Group life.
