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An incomplete life insurance app submitted to an insurer will result in which of these actions? - ✔✔App will be returned to the writing agent Which of the following is an ex of defamation? Circulating brochures falsely denouncing financial condition of an insurer Making statements that encourage purchase of term life insurance over whole life Issuing pamphlets containing false info about term life Publishing a newsletter that makes reference to reputable brokers in area - ✔✔Circulating brochures falsely denouncing financial condition of an insurer Which statement about a whole life policy is correct? Bene may be changed only w/consent of premium payor Premiums are flexible Cash value may be borrowed against Death benefit can usually be adjusted - ✔✔Cash value may be borrowed against Who signs a "Notice Regarding Replacement" form when an application is taken for a new life insurance policy that replaces an existing one? Beneficiary Applicant only
Producer only
Which of these provisions is NOT required in life insurance policies? Grace period Free look Entire contract Extended term - ✔✔Extended term Which of the following annuities pay benefits based on units rather than specific dollar amounts? Flexible annuity Single premium annuity Variable annuity (D) Deferred annuity - ✔✔Variable annuity NV's 10-day free-look period for life insurance policies begins at the date of delivery date of application date of approval date of physical exam - ✔✔date of delivery Which of following is a req to attain a nonres producer license? Pass special exam for nonres producers
Be licensed as producer in producer's state of domicile Own real estate in NV Maintain a specific sales quota in res state - ✔✔Be licensed as producer in producer's state of domicile NV Life & Health insurance guaranty association Assists in underwriting large policies is funded by producers through their commissions is financed by US treasury is funded by insurance companies through assessments - ✔✔Is funded by insurance companies through assessments An individual who has a contract w/an insurance company to represent it is called a producer director administrator representative - ✔✔Producer Which action will a life insurance company most likely take if an insured dies & it is discovered that insured's age was misstated on the app? - ✔✔Pay an amount premiums would have purchased at insured's actual age In a qualified retirement plan, the yearly contributions to an employee's account are restricted to maximum levels set by IRS
Decreasing Increasing - ✔✔Level (Pays same benefit amount if death occurs at any point during term) Credit life insurance is - ✔✔Issued on a debtor to cover outstanding balances on installment loans What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive? Number of dependents Primary Insurance Amount State of residence Total taxes paid into FICA - ✔✔Primary insurance amount (PIA) Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? Endowment Modified Whole Life Decreasing Term 20 - Pay Life - ✔✔Decreasing Term Which type of life insurance beneficiary requires their consent when a change of beneficiary is attempted by policyowner? - ✔✔Irrevocable beneficiary The most important factor to consider when determining whether to convert term insurance at insured's attained age or insured's original age is amount of coverage being converted
Who will be beneficiary health of the insured cost - ✔✔cost K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used? Conditional Contingent Initial premium Binding - ✔✔Conditional When an employee is terminated, how long does this employee have to convert group life coverage to an individual plan? 30 days 60 days 31 days 90 days - ✔✔ 31 days K pays on a $20,000 20 - Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? Return of premiums paid Face amount plus interest $20,000 death benefit
Level Term Decreasing Term Deposit Term - ✔✔Decreasing Term A Whole Life Insurance Policy endows when the Premium paid equals the death benefit Cash value plus dividends equal the death benefit Death proceeds are paid Cash value equals the death benefit - ✔✔Cash value equals the death benefit A is a person/company that underwrites an insurance risk and issues an insurance contract
- ✔✔Insurer In NV, a insurance company is one formed under the laws of a state outside of NV - ✔✔Foreign All of these are considered sources of underwriting information about an applicant EXCEPT Inspection report Rating services Credit Report (D) Medical Information Bureau - ✔✔Rating services
J is an insurance agent who maintains premiums in a fiduciary account. Which of the following expenses may NOT be paid using funds withdrawn from this account? Premiums due to insurers Return premiums due to insureds Personal medical expenses Commissions due to other licensees - ✔✔Personal medical expenses Which of the following features of a group term life policy enables an individual to leave the group and continue their insurance w/o providing evidence of insurability? - ✔✔Conversion privilege traditional individual retirement annuity (IRA) distributions must start by - ✔✔April 1st of the year following the year the participant attains age 70 1 / When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? - ✔✔at future dates specified in the contract with no evidence of insurability required If an annuity is terminated prior to beginning of the income payment period, the contract owner receives the contract surrender value at that time no refund of money reimbursement of all expenses deducted from the contract value all premiums paid up to the date of termination - ✔✔the contract surrender value at that time Which of these is an element of a Variable Life policy?
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply? Incontestable period Conversion provision Extended term option 1035 Exchange - ✔✔Conversion provision When an individual is planning to protect their family w/life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve? Establishes investment risk level acceptable to individual Takes into account present value of future income earned by breadwinner Places a dollar value on life of individual Establishes needs of individual & dependents - ✔✔Establishes needs of individual & dependents What is a responsibility of the Commissioner? Administering insurance laws Establishing sales quotas Endorsing insurers Incarcerating producers - ✔✔Administering insurance laws An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?
Distribution is subject to a tax penalty Distribution is subject to capital gains tax Distribution is subject to federal income tax withholding Distribution is subject to ordinary income tax - ✔✔Distribution is subject to federal income tax withholding (Participant must complete a rollover to another qualified plan within 60 days or distribution is considered a nonqualified distribution and is subject to taxes and penalties. A plan sponsor must withhold 20% of distribution for federal taxes on a rollover. Once rollover takes place to the new custodian, remainder of distribution is released) A Life policy offers the owner investment in products such as money-market funds, long- term bonds and equities - ✔✔Variable Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? Geographical location Marital status Source of income Risk classification - ✔✔Risk classification What is considered to be a characteristic of an immediate annuity? Benefit payments start within one payment period of purchase Normally tied to a specific equity or stock index Periodical contributions begin immediately
Complete app over phone w/customer, sign app for customer, then send app off to insurance company Have customer sign a blank app, then take app back to office to complete prior to sending it off to insurance company - ✔✔Complete app & review info w/customer brior to obtaining customer's sig, then send app off to insurance company The commissioner may hold hearings when approved by the NAIC for any reason deemed necessary only if there is a complaint filed only when a felony is involved - ✔✔for any reason deemed necessary In NV, an element of an insurance transaction would be setting up the sales appointment issuing an insurance contract determining how much coverage is needed ordering an MIB report - ✔✔issuing an insurance contract What is the maximum fine that can be imposed by the commissioner to a producer who violates an insurance law? $500 per violation $1,000 per violation $250 per violation
No limit to the fine - ✔✔$500 per violation Defamation occurs when an agent makes a false statement intended to replace an existing insurance policy w/another malign another insurer restrict fair trade misrepresent the provisions of an insurance policy - ✔✔malign another insurer Under a trustee group life policy, who would be eligible for a certificate of coverage? Employer Labor union Employee Corporation - ✔✔Employee Which of the following is an important underwriting principle of group life insurance? Everyone must be covered in the group Physical exams are required Employer must pay for the entire premium Group must be formed for purpose of getting affordable insurance - ✔✔Everyone must be covered in the group To be eligible for Social Security disability benefits, an employee must be unable to perform: any occupation that the employee is qualified & willing to do
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct? Cash value accumulatiuon of both 20-pay life and straight life depend on the insurer's financial rating 20 - pay life and straight life accumulate cash value at the same rate 20 - pay life accumulates cash value faster than straight life straight life accumulates faster than limited-pay life - ✔✔ 20 - pay life accumulates cash value faster than straight life all of these are powers of the commissioner EXCEPT Incarcerate a producer Enforce insurance laws Issue subpoenas hold hearings - ✔✔Incarcerate a producer A producer must complete hours of continuation education every 3 years. - ✔✔30 (30 hours every 3 years) What type of policy covers 2 people & pays upon death of last insured? - ✔✔Survivorship What is Old Age and Survivors Health Insurance (OASDHI) also known as? - ✔✔Social Security Which of these provisions require proof of insurability after a policy has lapsed? Reinstatement
Consideration Insuring Conversion - ✔✔Reinstatement Who would be liable for an insurance claim on a policy sold by a Nevada producer and issued by an insurance company NOT authorized to conduct business in Nevada? The Commissioner The producer The insurer The Guaranty Association - ✔✔The producer What action should a producer take if the initial premium is NOT submitted with the application? Keep the application until premium is paid Forward application to insurer without initial premium Forward application to insurer after giving applicant a conditional receipt Forward application to insurer after giving applicant a binding receipt - ✔✔Forward application to insurer without initial premium An example of an unfair claims settlement practice is requiring a time limit for submitting a claim making it mandatory that proof of loss be provided for each claim turning down a claim without providing the basis of denial
