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Questions and Answers
What is the advantage of buying an Equity Index Life Policy?
What is the advantage of buying an Equity Index Life Policy?
The cash value is guaranteed and in good years, interest exceeds a fixed product.
What is the disadvantage of a fixed annuity?
What is the disadvantage of a fixed annuity?
Reduced purchasing power against inflation.
Which of the following Whole Life policies would probably have the most expensive premium?
Which of the following Whole Life policies would probably have the most expensive premium?
- Modified Whole Life
- Regular Whole Life
- Limited Pay Whole Life
- Single Premium Whole Life (correct)
What type of policy does S have if it has a minimum rate of interest but also a capped maximum rate of return?
What type of policy does S have if it has a minimum rate of interest but also a capped maximum rate of return?
What units does V purchase after paying money into a variable annuity?
What units does V purchase after paying money into a variable annuity?
What does a convertible option on a term policy allow the insured to do?
What does a convertible option on a term policy allow the insured to do?
True or False: At least once a year, the owner must consult the insured if they want to make changes to the policy.
True or False: At least once a year, the owner must consult the insured if they want to make changes to the policy.
What is the most limited form of Limited Pay Whole Life?
What is the most limited form of Limited Pay Whole Life?
Under a life policy's Settlement Options, the beneficiary cannot do which of the following?
Under a life policy's Settlement Options, the beneficiary cannot do which of the following?
What is the plan of life insurance whose death benefit can be based on the investment of cash values in the stock market known as?
What is the plan of life insurance whose death benefit can be based on the investment of cash values in the stock market known as?
What does Joint Life insurance cover, and when does it pay out?
What does Joint Life insurance cover, and when does it pay out?
If an insured is found to be a substandard risk, which of the following actions will the insurer most likely take?
If an insured is found to be a substandard risk, which of the following actions will the insurer most likely take?
J has a policy that requires that he meet certain conditions in order for the contract to be enforceable. J has a(an):
J has a policy that requires that he meet certain conditions in order for the contract to be enforceable. J has a(an):
Which type of annuity payments are allowed during the pay-in period?
Which type of annuity payments are allowed during the pay-in period?
Joint Life premiums are:
Joint Life premiums are:
Standard Issues is an example of:
Standard Issues is an example of:
Which of T's ownership rights under a life policy would allow him to transfer ownership of a policy to a living trust?
Which of T's ownership rights under a life policy would allow him to transfer ownership of a policy to a living trust?
J has a life policy with the Accidental Death and Dismemberment rider. Her policy will pay:
J has a life policy with the Accidental Death and Dismemberment rider. Her policy will pay:
If an insured is covered by a Group Life policy and they are terminated, the insured will:
If an insured is covered by a Group Life policy and they are terminated, the insured will:
H and W should consider:
H and W should consider:
K's annuity will be accredited:
K's annuity will be accredited:
Whole Life insurance where premiums are due for a specified number of years that is shorter than one's entire life is called:
Whole Life insurance where premiums are due for a specified number of years that is shorter than one's entire life is called:
The age limit for contributing money into an IRA is:
The age limit for contributing money into an IRA is:
Insurable interest in a third-party ownership situation must exist at:
Insurable interest in a third-party ownership situation must exist at:
The entire contract provision of a life policy states which of the following?
The entire contract provision of a life policy states which of the following?
The primary difference between a viatical settlement and a life settlement is:
The primary difference between a viatical settlement and a life settlement is:
If insurance Company X places funds into a producer D's Premium Fund Trust Account to refund to an insured, by which of the following dates must these funds be credited to the account of the insured?
If insurance Company X places funds into a producer D's Premium Fund Trust Account to refund to an insured, by which of the following dates must these funds be credited to the account of the insured?
If a producer receives a hearing notice from the director relating to a license revocation, when will the hearing actually take place?
If a producer receives a hearing notice from the director relating to a license revocation, when will the hearing actually take place?
The Director verifies the status of all out-of-state producers via:
The Director verifies the status of all out-of-state producers via:
What refund is the insured entitled to if a producer earned a fee and a commission, but the insured canceled the policy after 45 days?
What refund is the insured entitled to if a producer earned a fee and a commission, but the insured canceled the policy after 45 days?
Who is appointed by and serves at the pleasure of the Governor?
Who is appointed by and serves at the pleasure of the Governor?
What is NOT required to be on an illustration?
What is NOT required to be on an illustration?
If a producer is found to have failed to maintain the proper surety bond, what could be the result of this failure?
If a producer is found to have failed to maintain the proper surety bond, what could be the result of this failure?
V purchased a policy that does not require an agent to purchase nor deliver the policy. When must V receive a buyer's guide?
V purchased a policy that does not require an agent to purchase nor deliver the policy. When must V receive a buyer's guide?
What is the regulation that requires a producer to sign their name on an insurance application?
What is the regulation that requires a producer to sign their name on an insurance application?
How many days from the filing of a duplicate copy of a written examination report does the producer have to request a hearing?
How many days from the filing of a duplicate copy of a written examination report does the producer have to request a hearing?
The cost for the death benefit under a Universal Life contract is based on:
The cost for the death benefit under a Universal Life contract is based on:
Misstatement of age:
Misstatement of age:
Is a fixed interest rate part of a Variable Life Policy?
Is a fixed interest rate part of a Variable Life Policy?
The most limited form of Limited Pay Whole Life is:
The most limited form of Limited Pay Whole Life is:
The Suicide Clause is known as a(an):
The Suicide Clause is known as a(an):
What part of a life contract allows the insured to customize a policy?
What part of a life contract allows the insured to customize a policy?
Which type of policy may pay a policyholder a dividend when there is a surplus?
Which type of policy may pay a policyholder a dividend when there is a surplus?
Another name for a lump sum funded annuity is?
Another name for a lump sum funded annuity is?
An insured commits suicide after the suicide clause expires. Which of the following is true?
An insured commits suicide after the suicide clause expires. Which of the following is true?
Which of the following is true about a long term care rider?
Which of the following is true about a long term care rider?
Which of the following is true about the convertible option on a term policy?
Which of the following is true about the convertible option on a term policy?
If an insurer is approved to sell auto insurance that provides a $100 refund after one year if the insured is accident-free during the year, why is this NOT rebating?
If an insurer is approved to sell auto insurance that provides a $100 refund after one year if the insured is accident-free during the year, why is this NOT rebating?
A producer who places insurance with an insurer without an agent contract requires that the producer must post what?
A producer who places insurance with an insurer without an agent contract requires that the producer must post what?
How long must insurers keep copies of all advertising materials?
How long must insurers keep copies of all advertising materials?
An insurance commission may be paid to all of the following persons, EXCEPT:
An insurance commission may be paid to all of the following persons, EXCEPT:
The civil fine amount that may be imposed for not complying with a lawful subpoena of the Director is:
The civil fine amount that may be imposed for not complying with a lawful subpoena of the Director is:
Which activities of a producer will not likely lead to a suspension, revocation or denial of license?
Which activities of a producer will not likely lead to a suspension, revocation or denial of license?
Under Regulation 919, what is the length of time an insurance company is required to keep detailed claims records?
Under Regulation 919, what is the length of time an insurance company is required to keep detailed claims records?
A producer uses sign language to explain an insurance policy to a prospect who is hearing impaired. Has the producer broken any insurance rules or regulations?
A producer uses sign language to explain an insurance policy to a prospect who is hearing impaired. Has the producer broken any insurance rules or regulations?
People working with insurers who belong to the following organizations are exempt from licensing, EXCEPT:
People working with insurers who belong to the following organizations are exempt from licensing, EXCEPT:
Once a producer has been notified that her license has been suspended by the Director, how many days does she have to request a hearing?
Once a producer has been notified that her license has been suspended by the Director, how many days does she have to request a hearing?
H has told his client that in order to procure an annuity, he must see the client's financial statements but his client refuses. Under Life Solicitation Rule, must H comply?
H has told his client that in order to procure an annuity, he must see the client's financial statements but his client refuses. Under Life Solicitation Rule, must H comply?
What is the most likely reason for a producer's license termination?
What is the most likely reason for a producer's license termination?
The Guaranty Association protects insured and/or beneficiaries against:
The Guaranty Association protects insured and/or beneficiaries against:
How many total course hours are required for life insurance prelicensing?
How many total course hours are required for life insurance prelicensing?
Which of the following advertising concepts would violate the misrepresentation statute if an insurer engaged in such a practice?
Which of the following advertising concepts would violate the misrepresentation statute if an insurer engaged in such a practice?
How many days prior notice of cancellation must a surety provide to the principal of the bond?
How many days prior notice of cancellation must a surety provide to the principal of the bond?
What result could occur if a producer fails to maintain the proper surety bond?
What result could occur if a producer fails to maintain the proper surety bond?
Which statement pertains to the Illinois producer ethics requirement?
Which statement pertains to the Illinois producer ethics requirement?
Selling insurance without a license without misappropriating premium funds is a:
Selling insurance without a license without misappropriating premium funds is a:
The subject of a market conduct examination for non-financial matters may request a hearing within how many days after receiving the examination report?
The subject of a market conduct examination for non-financial matters may request a hearing within how many days after receiving the examination report?
D moved to Illinois from another state where D held a producer license that was revoked. What outcome is likely if D applies for a producer license in Illinois?
D moved to Illinois from another state where D held a producer license that was revoked. What outcome is likely if D applies for a producer license in Illinois?
Deferred or renewal commissions may be paid under which of the following conditions?
Deferred or renewal commissions may be paid under which of the following conditions?
Which of the following is a prohibited investment option into which to place Premium Fund Trust Account monies?
Which of the following is a prohibited investment option into which to place Premium Fund Trust Account monies?
If an insurance company issues deceptive statements about its assets, this action is:
If an insurance company issues deceptive statements about its assets, this action is:
What is the greatest level of criminal prosecution that can result from producer rebating?
What is the greatest level of criminal prosecution that can result from producer rebating?
Once a producer has a felony conviction entered officially against him, what action is most likely to be taken pertaining to his producer license?
Once a producer has a felony conviction entered officially against him, what action is most likely to be taken pertaining to his producer license?
Which of the following circumstances may lead to the renewal of a producer license without the requirement of completing continuing education requirements?
Which of the following circumstances may lead to the renewal of a producer license without the requirement of completing continuing education requirements?
What is the fee for a temporary producer license?
What is the fee for a temporary producer license?
Which of the following statements pertaining to a Premium Fund Trust Account is accurate when a producer handles the premium funds of more than one insurance company?
Which of the following statements pertaining to a Premium Fund Trust Account is accurate when a producer handles the premium funds of more than one insurance company?
The best definition of a 'fiduciary' is:
The best definition of a 'fiduciary' is:
Which of the following life insurance products offers guaranteed income while the insured is alive?
Which of the following life insurance products offers guaranteed income while the insured is alive?
An example of a fixed interest sensitive insurance product with flexible premiums is:
An example of a fixed interest sensitive insurance product with flexible premiums is:
J is interested in receiving her annuity benefits over the next twenty years only. What should she select?
J is interested in receiving her annuity benefits over the next twenty years only. What should she select?
If a whole life policy has a loan outstanding and the insured dies before it is paid, what occurs?
If a whole life policy has a loan outstanding and the insured dies before it is paid, what occurs?
What is the advantage of buying an Equity Index Life Policy?
What is the advantage of buying an Equity Index Life Policy?
Of the following types of Annuities, which type guarantees payment for a specified minimum period and will keep paying for the entire lifetime of the Annuitant?
Of the following types of Annuities, which type guarantees payment for a specified minimum period and will keep paying for the entire lifetime of the Annuitant?
C, who is currently a college student, wants a short term, inexpensive temporary policy with a level death benefit. What should C buy?
C, who is currently a college student, wants a short term, inexpensive temporary policy with a level death benefit. What should C buy?
R has a Variable Universal Life policy and has several years of great interest rates. What effect will a good rate of growth have on R's death benefit?
R has a Variable Universal Life policy and has several years of great interest rates. What effect will a good rate of growth have on R's death benefit?
At annuitization, which settlement option will give the highest possible fixed income?
At annuitization, which settlement option will give the highest possible fixed income?
A married couple wants to purchase a Survivorship life policy for their estate planning. Will the underwriter likely approve the policy?
A married couple wants to purchase a Survivorship life policy for their estate planning. Will the underwriter likely approve the policy?
A term life policy has the return of premium (ROP) rider. The returned premium is income and fully taxable.
A term life policy has the return of premium (ROP) rider. The returned premium is income and fully taxable.
Variable Whole Life requires a fixed and level premium.
Variable Whole Life requires a fixed and level premium.
An annuitant is deferring their income payments until a later date. What are the tax considerations during the accumulation period?
An annuitant is deferring their income payments until a later date. What are the tax considerations during the accumulation period?
Which of the following is a short term strategy for funding an annuity?
Which of the following is a short term strategy for funding an annuity?
What is the advantage to buying an Equity Index Life Policy?
What is the advantage to buying an Equity Index Life Policy?
G purchased a level term policy with a rider that pays back all of the premiums if G outlives his policy. What is the name of G's rider?
G purchased a level term policy with a rider that pays back all of the premiums if G outlives his policy. What is the name of G's rider?
Why does the cost of insurance component increase every year in a Universal Life Policy?
Why does the cost of insurance component increase every year in a Universal Life Policy?
A prospective insured is seeking a life insurance policy that allows flexible premium payments as well as the potential interest rate that can keep pace or even exceed the inflation rate. Which policy should be recommended?
A prospective insured is seeking a life insurance policy that allows flexible premium payments as well as the potential interest rate that can keep pace or even exceed the inflation rate. Which policy should be recommended?
Why does the cost of insurance component increase every year in a Universal Life Policy?
Why does the cost of insurance component increase every year in a Universal Life Policy?
Which of the following statements regarding Interest Sensitive Whole Life is CORRECT?
Which of the following statements regarding Interest Sensitive Whole Life is CORRECT?
Study Notes
Insurance Contracts and Policies
- A unilateral contract requires one party to fulfill certain conditions for enforceability.
- Joint Life premiums are calculated based on the joint average age of all insured individuals.
- Absolute Assignment allows the owner of a life policy to transfer ownership to a living trust or another entity.
- The entire contract provision specifies that both the policy and application jointly form the complete agreement.
Annuities and Riders
- Different types of annuity payments (level, flexible, single) are allowed during the pay-in period.
- For an Index annuity linked to the S&P 500, returns are capped despite high performance.
- A period certain annuity provides benefits over a fixed term, ensuring income for specified years.
- Fixed Annuities guarantee income while the insured is alive, while Universal Life cost is based on Term Insurance.
Life Insurance Coverage and Benefits
- An insured under a Group Life policy can convert to a permanent policy without proving insurability after termination.
- If accidental death leads to partial loss of eyesight, the policy pays a capital sum.
- Survivorship life policies ensure coverage for estate planning, usually requiring only one insured to be in good health.
Insurance Regulation and Compliance
- The Illinois Director verifies the producer's licensing status using the national producer database.
- Producers must maintain surety bonds; failure can result in license revocation.
- The civil fine for not complying with a subpoena from the Director is $2,000.
Producing and Licensing
- Producers must complete 20 hours of prelicensing courses for life insurance.
- A producer facing license suspension has 30 days to request a hearing post-notice.
- Renewal of a producer license might be exempt from continuing education if the producer is on active military duty.
Sales and Marketing Practices
- Extra fees for service are not allowed in Premium Fund Trust Accounts.
- Misrepresentation during policy sales can lead to disciplinary actions.
- Refunds from accident-free auto insurance are legal if part of the approved contract.
Investment and Financial Considerations
- A brokerage account trading in options futures is a prohibited investment for Premium Fund Trust Accounts.
- The return of premium rider guarantees refund of premium if the policyholder outlives the term.
- Equity Indexed Life policies combine minimum interest rates with capped maximum returns.
Policy Features and Options
- Life policies may offer riders to customize coverage, including the return of premiums if outlived.
- Variable Whole Life requires level premiums but allows for investment growth.
- Interest Sensitive Whole Life can yield interest rates higher than the guaranteed minimum.
Claims and Payouts
- If a whole life policy has an outstanding loan, the death benefit is the total minus the loan and interest deducted.
- The Suicide Clause is a temporary exclusion period for payouts.
- Dependent on the settlement option chosen, beneficiaries may have restrictions on claim actions.
General Principles
- Insurable interest must exist at the inception of ownership in third-party ownership.
- Advertising deceptive claims regarding an insurer's financial status is an unfair trade practice.
- A conviction for a felony generally results in revocation of an insurance producer license.
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This quiz features essential study questions related to Dohrn Insurance. Each flashcard covers key concepts such as types of contracts, annuities, and premium calculations. Perfect for anyone preparing for insurance exams or seeking to improve their knowledge in the field.
