Homework Lance
PRIMERICA LIFE INSURANCE EXAM ANSWERS
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that 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
d. stock
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. retention
b. reduction
c. transfer
d. avoidance
In insurance, an offer is usually made when
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial premium
c. the agent hands the policy to the policyholder
d. an agent explains a policy to a potential applicant
the causes of loss insured against in an insurance policy are known as
a. perils
b. losses
c. risks
d. hazards
what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions
which of the following best describes an insurance company that has been formed under the laws of this state?
a. domestic
b. sovereign
c. alien
d. foreign
which of the following factors is NOT considered by an underwriter when determining the premium rates for an individual seeking insurance?
a. medical history
b. sex
c. age
d. race
In insurance transactions, fiduciary responsibility means
a. handling insurer funds in a trust capacity
b. maintaining good credit record
c. being liable with respect to payment of claims
d. commingling premiums with agents personal funds
The authority granted to an agent through the agent’s contract is referred to as
a. absolute authority
b. express authority
c. apparent authority
d. implied authority
Insurance policies are not drawn up though negotiations, and an insured has little to say about its provisions. what contract characteristic does this describe?
a. unilateral
b. conditional
c. personal
d. adhesion
which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?
a. reciprocal
b. fraternal
c. stock
d. mutual
which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?
a. subrogation
b. warranty
c. aleatory
d. adhesion
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
a. legal purpose
b. contract of adhesion
c. acceptance
d. consideration
consideration is something of value that each party gives to the other. The consideration on the part of the insured is the payment of premium and the representations made in the application
which of the following would qualify as a competent party in an insurance contract?
a. the applicant is intoxicated at the time of application
b. the applicant is 12 year old student
c. the applicant is under the influence of a mind-impairing medication at the time of application
d. the applicant has a prior felony conviction
when an insurer and insured enter into a contract, both parties must be legal of age and mentally competent. It is legal for a person convicted of a felony to buy an insurance contract. An intoxicated person, however, may not be mentally competent, a 12 year old student is considered to be underage in most states and a person under mind-impairing medication most likely would not be mentally competent
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
a. representation
b. adhesion
c. consideration
d. good health
which of the following is a primary source of information used for insurance underwriting?
a. application
b. applicant interviews
c. medical records.
d. private investigations
which of the following is the best reason to purchase life insurance rather than annuities?
a. to liquidate a sum of money over a period of year
b. to create regular income payments
c. to liquidate a sum money over a lifetime
d. to create an estate
A producer is helping a married couple determine the financial needs of their children in the event of one or both should die prematurely. This is a personal use of life insurance known as
a. survivorship insurance
b. juvenile protection provision
c. survivorship protection
d. life planning
A producer agent must do all of the following when delivering a new policy to the insured EXCEPT
a. disclose commissions earned from the sale of the policy
b. explain the policy provisions, riders, and exclusions
c. collect any premium due
d. explain the rating procedures if the policy is rated differently than applied for
if an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
a. which individual will pay the premium
b. whether an insurable interest exists between the individuals
c. the gender of applicant
d. the type of policy requested
When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by
a. a physician of the applicant’s choice and at his expense
b. a home office underwriter
c. a paramedic or examining physician at the insurer’s expense
d. the agent
The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the business is called
a. expenses
b. legal reserve
c. dividend accumulation
d. premium tax
which of the following methods of calculating the amount of life insurance needed takes into account the insured’s wages, years until retirement, and inflation?
a. needs approach
b. blackout approach
c. lump-sum approach
d. human life value approach
which of the following is NOT required for a producer to tell a prospect?
a. how the insurer would use any outside information regarding the applicant
b. an explanation of products that the insurer is selling
c. what requirements the producer needed to meet to obtain the insurance license
d. from what outside sources the insurer would seek information, regarding the insured
which of the following statements concerning buy-sell agreements is true?
a. premium paid are deductible as a business expense
b. benefits received are considered income taxable
c. buy-sell agreements pay in the event of a medical emergency
d. buy-sell agreements are normally funded with a life insurance expectancy
Who may complete a paramedical report?
a. an underwriter
b. a nursing assistant
c. a registered nurse
d. a spouse
The term “illustrations” in a life insurance policy refers to
a. a presentation of non guaranteed elements of a policy
b. a depiction of policy benefits and guarantees
c. pictures accompanying a policy
d. charts and graphs
which is generally true regarding insureds who have been classified as preferred risks?
a. they can borrow higher amounts off of their policies
b. they can decide when to pay their monthly premiums
c. they keep a higher percentage of any interest earned on their policies
d. their premiums are lower
the preferred risk classification indicates that an insured is in excellent physical condition and employs healthy lifestyles and habits. These individuals qualify to lower premiums than those in other categories
All of the following are requirements for life insurance illustrations EXCEPT?
a. they may only be used as approved
b. they must identify non guaranteed values
c. they must differentiate between guaranteed and projected amounts
d. they must be part of the contract
an illustration may not be altered by an agent and must clearly state that it is not part of the contract. It is legal to list non guaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
a. term insurance only
b. permanent insurance only
c. universal life insurance only
d. any form of life insurance
any form of life insurance may be used to fund a buy-sell agreement
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured and matures at the insured’s age 100 is called?
a. Modified Endowment Contract (MEG)
b. level term life
c. graded premium whole life
d. single premium whole life
single premium whole life requires the entire premium to be paid in one lump sum at the policy’s inception
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
a. ordinary life
b. joint life
c. decreasing term
d. whole life
a joint life policy covering 2 lives would be the least expensive because the premiums are based on an average age, and it would pay a death benefit only at the first death
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of the life insurance policy would be best suited to this situation?
a. universal life
b. whole life
c. decreasing term
d. variable life
which of the following are generally NOT considered when underwriting group insurance?
a. the group’s past claim experience
b. the site of the group
c. the insured’s medical history
d. the nature of the group
group life insurance is written on a group, not individual basis. Each individual completes an application that identifies the participant and the beneficiary. Then, the group is judged based on its nature and past claim experience. Generally, medical questions are not necessary
what are the 2 components of a universal policy?
a. insurance and investments
b. mortality cost and interest
c. separate account and policy loans
d. insurance and cash account
a universal life policy has 2 components: an insurance components and cash account. The insurance component of a universal life policy is always renewable term insurance. The cash account accumulates on a tax deferred basis each year and earns either the guaranteed contract rate or the current rate, whichever is higher
An adjustable life policyowner can change which of the following features?
a. the coverage period
b. the mortality expense
c. the investment account
d. the insured
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 reaches age 65
c. for 20 years
d. until the policyowner’s age 100, when policy matures
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
a. required a premium increase each renewal
b. built cash value
c. required proof of insurability ever year
d. decreased death benefit each renewal
Annually renewable term policies premiums are adjusted each year to the insured’s attained age, however, the policy may be guaranteed renewable. Death benefits remain level, and switch any term policy, there are no cash values
Both Universal Life and Variable Universal Life have a
a. flexible premium
b. level fixed premium
c. decreasing premium
d. increasing premium
variable universal life, like universal life itself, has a flexible premium that can be increased or decrease as the policyowner chooses, so long as there is enough value in the policy to fund the death benefit
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. half the amount
b. lower
c. higher
d. as hig
survivorship life is much the same as joint life in that it insures 2 or more lives for a premium that is based on a joint age. the major difference is that survivorship life pays on the last death rather than upon the first death. Since the death benefit is not paid until the last death, the joint life expectancy in a sense is extended, residing in a lower premium thant that which is typically charged for a joint life
what policy would be classified as a traditional level premium contract?
straight whole life
The ownership provision entitles the policyowner to do all of the following EXCEPT?
a.set premium rates
b. receive a policy loan
c. assign the policy
d. designate a beneficiary
the insurer sets premium rates based upon underwriting considerations
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. accelerated benefit rider
b. living need rider
c. payor rider
d. cost of living rider
a “cost of living rider” adjusts the face amount of a policy to maintain the relationship of the face amount and increase in the cost of living
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?
a. cash surrender
b. reduced paid-up
c. paid-up options
d. extended term
once the cash surrender value is paid, the contract is over
which of the following is true about the premium on the children’s rider in a life insurance policy?
a. it decreases when an adopted child is added to the policy
b. it remains the same no matter how many children are added to the policy
c. it decreases when the oldest child remains the age of 21
d. it increases when a newborn baby is added to the policy
the premium does not change on the inclusion of additional children, it is based on an average number of children
The automatic premium loan provision is activated at the end of the
a. grace period
b. free-look period
c. elimination period
d. policy period
provided there is sufficient cash value in the policy, this provision triggers a loan at the end of the grace period to keep a policy in force
which of the following explains the policyowner’s right to change beneficiaries, choose options, and receive proceeds of a policy?
a. the Entire Contract Provision
b. The Consideration Clause
c. Agreement Rights
d. Owner’s Rights
policy owners can learn about their ownership rights by referring to the policy
The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?
a. the proceeds will be split evenly between the 2 beneficiaries
b. the policyowner can specify the way the proceeds are split in the policy
c. the way proceeds are split between beneficiaries is decided by which type of policy is chosen
D. life insurance policies may have only one beneficiary
the owner of a life policy may name any individual as a beneficiary for the policy proceeds. The owner may name more than one individual, in which case the individual beneficiaries will split the benefit by the percentage specified in the policy
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
a. pay nothing, there was a misrepresentation on the application
b. pay the full death benefit and refund excess premium
c. pay a reduced death benefit
d. pay the full death benefit
The incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years. However, is does not apply to statements relating to age, sex, and identity
After a back injury, an insured is disabled for a year. His insurance policy carries a disability income death benefit rider. Which of the following benefits will he receive?
a. monthly premium waiver and monthly income
b. percentage of medical costs paid by the insurer
c. payments for life
d. yearly premium waiver and income
The disability income death benefit rider waives the policy premiums, just like the Waiver of Premium rider. Unlike the Waiver Premium rider, it also allows the insured to receive a weekly or monthly income during the disability period
The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the
a. complete contract
b. entire contract
c. total contract
d. aleatory contract
The policy, together with the attached application, constitutes the entire contract. This provision limits the use of evidence than the contract and the attached application in a test of the contracts validity. This is a mandatory provision in life insurance
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?
a. the death benefit will be larger
b. the death benefit will be smaller
c. the death benefit will be forfeited
d. the death benefit will be the same as the original face amount
If an insured withdraws a portion of the death benefit by the use of this rider, the benefit payable at death will be reduced by that amount, plus the amount of earning lost by the insurance company in the interest income
j applied for a life insurance policy on January 10th. the policy was issued January 31. j’s agent was vacationing at the time the policy was issued, so j did not receive the policy until February 18. j decides that he does not want the policy. when would j need to return to the insurer in order to receive a full refund of premium paid?
a. February 28th, or 10 days after the time the policy is delivered
b. the time varies from one policy to another
c. it was already to late when j received the policy because the 10-day free-look period has expired
d. anytime, because the agent did not deliver the policy promptly
the 10-day free-look period begins when the policy is delivered
What limits the amount that a policyowner may borrow from a whole life insurance policy?
a. cash value
b. premiums paid
c. amount stated in the policy
d. face amount
the amount available to the policyowner for a loan is the policy owner’s cash value. If there are any outstanding loans, that amount will be reduced by the amount of the unpaid loans and interest
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
a. accumulation at interest
b. cash option
c. reduction of premium
d. annual dividend premium
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an automobile accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as an attachment?
a. $0
b. $100,000
c. $200,000
d. $100,000 plus the total of paid premiums
the beneficiary would most likely receive 2x the face value of the policy, since his fatal injuries were caused by an accident and he died within the 90-day benefit limit stipulated in most policies
When an annuity is written, whose life expectancy is taken into account?
a. annuitant
b. beneficiary
c. life expectancy is not a factor when writing an annuity
d. owner
which of the following is a true comparison between annuities and life insurance?
a. both annuities and life insurance use mortality tables
b. annuities serve the same function as life insurance
c. both provide a lifetime of income
d. neither annuities or life insurance subject to income taxes
annuities are not life insurance, they do not pay a face amount upon the death of the annuitant. In most cases, the payment phase stops upon the death of the annuitant. Annuities use mortality tables, which reflect a longer life expectancy than the tables used in life insruance
Annuities can be used to fund which of the following?
a. variable life insurance
b. group life insurance
c. estate creation
d. retirement plans
since annuities are a popular means to provide retirement plans, they are often used to fund qualified retirement plans
which of the following is a feature of a single premium immediate annuity?
a. it is purchased through periodic payments
b. income payments start at age 65
c. it is also referred to as a deferred annuity
d. income payments start within one year
which of the following would most directly affect the purchasing power of death benefits paid on a fixed annuity?
a. company investment performance
b. guaranteed minimum payout
c. economic inflation
d. interest rations
in times of inflation, benefits have less purchasing power. Since costs increase as a result of inflation, more money is required to purchase something that had previously cost less. Likewise, in the event of deflation, the purchasing power of benefits increase. The other options listed would affect the amount of money available to the annuity owner, but they would not actually affect the purchasing power of benefits paid
which of the following is NOT true regarding the annuitant?
a. the annuitant receives the annuity benefits
b. the annuitant must be a natural person
c. the annuitant cannot be the same person as the annuity owner
d. the annuitants life expectancy is taken into consideration for the annuity
while they don’t have to be, the annuitant and annuity owner are often the same person. The annuitant is the person who receives benefits or payments from the annuity and for whom the annuity is written> since the annuitants’s life expectancy is taken into consideration, the annuitant must be a natural person
When a fixed annuity owner pays his/her insurance company a monthly annuity premium, where is this money placed?
a. the insurance company’s general account
b. forwarded to an investor
c. each contract’s separate account
d. the annuity owner’s account
fixed annuities guarantee a minimum amount of interest to be credited to the purchase payment. The insurance company can afford to make guarantees because the money of a fixed annuity is placed in the general account of the insurance company, which is part of its investment portfolio.The company makes conservative investments to insure a guaranteed rate to the annuity owners
An individual buys a flexible premium deferred life annuity with 20 year period certain. What would his beneficiary receive if he died 5 years after beginning the annuity phase?
a. payment for 15 years
b. payments for 20 years
c. payments for life
d. nothing
with any period certain, death of the annuitant within the state period will provide payments to the beneficiary only for the remainder of the period certain
The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called
a. joint life annuity
b. life income with period certain
c. life income with refund
d. joint and survivorship
The annuity purchased with multiple payments, whose benefit is paid more than one year after the purchase is know as which type of annuity?
a.flexible premium immediate annuity
b. single premium deferred annuity
c. flexible premium deferred annuity
d. single premium immediate annuity
the flexible premium deferred annuity (FPDA) is purchased with multiple payments, such as a portion of each paycheck. The benefit payment begin sometime after a one year from the date of purchase
which of the following will NOT be an appropriate use of a deferred annuity?
a. creating an estate
b. accumulating retirement funds
c. accumulating funds in an IRA
d. funding a child’s college education
which of the following products requires a securities license?
a. variable annuity
b. fixed annuity
c. equity indexed annuity
d. deferred annuity
a variable annuity is considered to be a security and is regulated by the Securities Exchange Commission (SEC) in addition to state regulations. For that reason, a person must hold a securities license in addition to a life agent’s license in order to sell variable annuities
All of the following statements are true regarding installments for a fixed period annually settlement option EXCEPT:
a. it will pay the benefit only for a designated period of time
b. the payments are not guaranteed for life
c. the insurer determines the amount for each payment
d. it is a life contingency option
under the installments for a fixed period annuity settlement option, the annuitant selects the time period for the benefits; the insurer determines how much each payment will be. This option for a specific amount of time only, and there are no life contingencies
What type of annuity can be purchased with a single premium and provides benefits payments immediately?
a. fixed
b. immediate
c. single premium
d. deferred
with an immediate annuity, distribution starts within 1 year of purchase
which of the following are NOT fundable by annuities?
a. death benefits
b. cash accumulation for any reason
c. a person’s retirement
d. estate liquidation
annuities are most commonly used to fund a person’s retirement, but they can technically be used to accumulate cash for any reason. Annuities can also be used to liquidate an estate. Annuities do not provide death benefits; those are provided by life insurance
which of the following is TRUE of a qualified plan?
a. it may allow unlimited contributions
b. it has a tax benefit for both employer and employee
c. it does not need to have a vesting schedule
d. it may discriminate in favor of highly paid employees
a qualified plan is approved by the IRS, which then gives both the employee and employer benefits deductibility of contributions and tax deferral of growth
What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account by the beneficiary?
a. capital gains tax on distributions and no penalty
b. capital gains tax on distributions plus 10% penalty
c. income tax on distributions and no penalty
d. income tax on distributions plus 10% penalty
if the beneficiary chooses to leave the money in the tax-deferred account until the calendar year in which the power would have attained age 70 1/2 the distributions would be subject to income taxation at the rate at the time of withdrawal
Death benefits payable to a beneficiary under a life insurance policy are generally
a. subject to income taxation by the federal government
b. exempt from income taxation if under $7,000
c. exempt from income taxation if over $7,000
d. not subject to income taxation by the federal government
when premiums are paid with after tax dollars, the death benefit is generally not subject to federal income taxation
what is the main purpose of the Seven-pay test?
a. it requires level premium payments for 7 years
b. it ensures that the policy benefits are paid out in 7 years
c. it guarantees interest minimum
d. it determines if the insurance policy is an MEC
the seven pay test determines whether an insurance policy is “over funded” or if its a modified endowment contract. In other words, the cumulative premiums paid during the first seven years of a policy must not exceed the total amount of the net level premiums that would be required to pay the policy up using guaranteed mortality costs and interest
If a company has a simplified employee pension plan, what type of plan is it?
a. the same as an IRA, with the same contribution limits
b. an undefined contribution plan for large business
c. a qualified plan for a small business
d. the same as a 401(k) plan
a Simplified Employee Pension (SEP) is a type of qualified plan suited for the small employer for self employed. A SEP is an employer sponsored IRA with an expanded contribution rate up to 25% of compensation or a specified maximum contribution amount
If taken as a lump sum, life insurance proceeds to beneficiaries are passed
a. part tax-free and part taxable
b. without interest
c. free of federal income taxation
d. tax-deductible
life insurance proceeds to beneficiaries are passed free of federal income taxation if taken as a lump sum distribution. If the proceeds are taken as other than lump sum, part of the proceeds will be tax free and part will be taxable. When paid in installements, part of the proceeds contains principal and some interest, so the interest portion is subject to federal income taxation
When must an IRA be completely distributed when a beneficiary is not named?
a. due date of beneficiary tax return including extensions
b. december 31 of the year following the year of the owners death
c. due date of the deceased owners first tax return including extensions
d. december 31 of the year that contains the 5th anniversary of the owners death
if the owner dies before distributions have begun, the entire interest must be distributed in full on or before December 31 of the calendar year that contains the 5th anniversary of the owners death, unless the owner named a beneficiary
In life insurance policies, cash value increases
a. are only taxed when the owner reaches age 65
b. grow tax deferred
c. are income taxable immediately
d. are taxed annually
generally life insurance cash values are only income taxed if the policy is surrendered totally or partially and the cash value exceeds the premiums paid
According to agency law, the producer always represents the
a. insurance company
b. client
c. public
d. state insurance department
A producer in another state wants to become a producer in Louisiana. The other state gives the same privileges to Louisiana producers wanting to be licensed in that state as it does to its own producers. Louisiana, therefore, extends the licensing privileges to the prospective producer of the other state. What is this called?
a. fair exchange
b. controlled business
c. subrogation
d. reciprocity
reciprocity occurs when the state in which the person resides accords the same privilege to residents of Louisiana
A producer has been notified by the Commissioner to stop using an unapproved trade name. How many days does the producer have to change the trade name before facing a fine?
a. 5 business days
b. 10 days
c. 30 days
d. the name must be changed immediately
a producer who contributes to use a unapproved trade name for 10 or more days after being notified will face a fine of up to $5,000
A Louisiana insurance company ran and advertisement in June 2008. When could the company discard the file on this document?
a. June 2013
b. June 2012
c. June 2011
d. June 2009
Existing and replacing life insurers are required to keep copies of all summaries, notices, and statements used in sales transactions until the conclusion of their next examination by the insurance department, or for a period of at least
a. 1 year
b. 2 years
c. 3 years
d. 5 years
Louisiana Insurance laws require insurers to keep such records for a minimum of 5 years
If a company wants to appoint a producer, which entity must it notify?
a. the NAIC
b. the governor
c. the appointment board
d. the commissioner
when a company appoints a producer, it must first apply for the appointment with the commissioner. the Commissioner then has 30 days to make sure that the producer is fit to transact insurance with that company
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
a. a legal advertising strategy
b. unfair discrimination
c.defamation
d. illegal
it is illegal to participate in any boycott, coercion, or intimidation that is intended to restrict fear trade or create a monopoly
which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?
a. unfair trade practices law
b. the guaranty association
c. consumer privacy act
d. the fair credit reporting act
the purpose of the fair credit reporting act is to protect consumers against the circulation of inaccurate or obsolete information and to ensure that consumer reporting agencies are fair and equitable in their treatment of consumers
ABC insurance company wishes to begin transacting business in Louisiana. Before it can do so, it must do which of the following?
a. receive permission from the governor of louisiana
b. receive a letter of clearance from ABC’s home state
c. obtain approval of each of its corporate officer and executives
d. obtain a certificate of authority
all insurers, regardless of the state in which they are chartered, must obtain a certificate of authority from the louisiana insurance department before they can transact insurance in the state
A temporary license is good for
a. 30 days
b. 60 days
c. 90 days
d. 180 days
a temporary license is good for 180 days
A temporary license may be issued without examination to all of the following EXCEPT:
a. the surviving spouse of a deceased producer
b. the spouse of a retired producer
c. the legal guardian of a disabled producer
d. the designee of a producer entering active service in the US navy
there is no provision for a temporary license to be issued to conduct the business of a retired producer
which would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
a. disclosure rule
b. replacement rule
c. reinstatement rule
d. conversion rule
anytime a new policy is issued that replaces or modifies existing insurance, a replacement form must be submitted to the ceding company
if authorized to write life and property and casually insurance, how many hours of continuing education instruction are producers required to complete every 2 years?
a. 10
b. 12
c. 14
d. 24
producers in louisiana are required to complete 24 hours of continuing education every 2 years, regardless of the number of lines for which the producer is licensed
what is the main justification for the existence of the state insurance department?
a. to protect producers from the national association of insurance commission
b. to protect the state from harmful practices of companies and producers
c. to protect the public
d. to protect companies from malicious lawsuits
the state insurance department exists to protect the public
Any payment to a producer from an insurer that is contingent on the sale of an insurance policy or contract is called a
a. charge fee
b. service fee
c. commission
d. regular fee
producers are normally compensated by commissions where a percentage of the premium is paid to the producer by the insurance company
which type of assignment would be used for a loan?
a. collateral
b. absolute
c. modified
d. permanent
If a policyowner returns a policy 7 days after the policy is delivered, the insurer will
a. refund a prorated portion of the premium paid
b. refund premium paid minus expenses
c. refund nothing because the insured was covered for 7 days
d. refund the full premium paid
If an insured dies during the grace period, the insurer will pay
a. the full face amount
b. the face amount minus premium due
c. the face amount minus a surrender charge
d. nothing, the contract is null and void
which of the following is NOT a requirement of the reinstatement provision?
a. submit the reinstatement application within 3-years of the policy lapsing
b. proof insurability
c. pay back any loans
d. pay backs premium at current attained age
If an insured dies 3 years after the policy was issued an understated his age on the application, what will the insurer do?
a. adjust the death benefit
b. pay the full death benefit
c. adjust the premium
d. pay no death benefit and return the premium paid
what is the name of the first beneficiary listed in a policy?
a. primary
b. secondary
c. tertiary
d. contingent
which dividend option would be taxable?
a. reduction of premium
b. paid-up additions
c. cash
d. accumulate at interest
which nonforfeiture options prohibits reinstatement of the policy?
a. cash
b. extended term
c. reduced paid up
d. interest only
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