Comprehensive Exam-KY Life & Health (164 questions to pass the "Comprehensive Exam" you need get 90% to pass 1 General Insurance 15 2 Life Basics 8 3 3 Types of Policies and Riders 15 4 Life Policy Provisions and Options 15 5 Annuities 6 6 Markets a

Comprehensive Exam-KY Life & Health (164 questions to pass the "Comprehensive Exam" you need get 90% to pass 1 General Insurance 15 2 Life Basics 8 3 3 Types of Policies and Riders 15 4 Life Policy Provisions and Options 15 5 Annuities 6 6 Markets a All of the following are producer responsibilities to the applicant, except: Offering and selling only the lowest premium policy ___________ manufacture and sell insurance coverage in the form of policies or contracts of insurance. Insurers When both parties must perform certain duties and follow certain rules of conduct to make a contract enforceable refers to a(n) __________ contract. Conditional _____________ insurance allows for insurance coverage to be obtained when not available from admitted carriers. Surplus lines The field underwriter is the _________ and is not a determiner of insurability. Producer To address adverse selection what can an insurer legally do? Establish and enforce sound underwriting practices A contract that is drafted by an insurer and receives no input or alteration from the insured, is considered a(n): Contract of Adhesion Which of the following parties does not sign an application for life insurance? The beneficiary The ____________ market is a private source of coverage of last resort for individuals or businesses that have been rejected by voluntary market insurers. Residual Which of the following is NOT considered one of the essential elements of a contract? Conditions An insurer NOT authorized to do business within this state is considered what type of insurer? Non-Admitted Which of the following describes Fiduciary Responsibilities? Anyone acting as an insurance producer or agent for an insurer shall be held responsible in a trust or fiduciary capacity for any money collected or received for the insurer The relationship of a person who acts on behalf of a company whereby the person's actions can bind the company is known as: The law of agency With health and life insurance a/an _________ is required at the time of the application. Insurable interest _____________ consists of groups of underwriters called syndicates, each of which specializes in insuring a particular type of risk. Lloyds of London What is the primary reason why States have 'outlawed' Stranger Originated Life Insurance (STOLI) transactions? At policy inception there is a lack of insurable interest Which of the following types of policies is eligible for policy dividends? Participating An applicant for life insurance pays the agent the initial premium and receives a Conditional Insurability Receipt in return. If the policy was to be issued as substandard, but the applicant dies prior to policy issue what is the result? The insurer will refund any premiums paid Which of the following best describes 'Capital Retention/Conservation' in an effort to meet an income objective? Investment earnings are paid out If a copy of the application, which led to a life insurance policy being issued, is attached to the policy: It is considered part of the entire contract Which of the following products are offered by insurers to protect families from the financial setback of a family member's premature death? Life Insurance The HIV Consent Form specifies which types of individuals may receive __________. The test results Confidential information shared by the producer to the insurer and does not become part of the policy is the __________. Agent's Report A is the insured under a $100,000 10 year term life insurance policy with her spouse named as her beneficiary. If she dies in year 9, what will her spouse receive? The face amount of the policy Which of the following statements about Equity Indexed Life insurance is TRUE? The interest credited to the policy is based off of the performance of a stock market index like the S&P 500 A policyowner would like more coverage than the $100,000 Whole Life policy being proposed, but does not have enough discretionary income to pay a lot more money to do so. What can a producer recommend that will allow the policyowner to have the Whole Life policy, but with more total death benefit at an affordable price? Add a term rider All of the following are correct pertaining to Decreasing Term, except: The premium declines throughout the term of the policy All of the following are statements are true of a juvenile policy, except: The insured is the premium payor Term Life insurance is designed to provide coverage for ___________. A specified period of time Which of the following is TRUE of a term rider when attached to a permanent life policy? It can provide additional temporary coverage on the insured or on other members of the family Whole Life is also known as ________ protection. Permanent Each of the following choices are true of whole life, except: The policy can be converted into a term life insurance plan at anytime Which of the following is TRUE regarding an Adjustable Life Policy if the insured chooses to increase the face amount in the future? Evidence of insurability would be required All of the following are true of re-entry Term, except: Re-Entry is allowed without proof of insurability Which of the following is a true characteristic of a Variable Universal Life policy? As long as there is sufficient cash value to cover policy expenses when due, the insured is not required to pay the planned premium Which Whole Life policy is designed to provide a substantial immediate cash value? Single Premium Whole Life Policy A married couple purchases a $250,000 Joint Life Policy. When the older of the two dies, what is the amount payable to the survivor? $250,000 A married couple wants to make sure that if either of them dies, the survivor has enough funds to maintain their standard of living but want to accomplish this in the most economical way. Which of the following recommendations is best suited to accomplish their goal? Purchase a Joint life policy Which of the following provisions commence at the time of the delivery of the policy to the insured? Free Look Period Jeanne has a $100,000 whole life insurance policy that has $1,000 of dividend additions, a $6,000 outstanding loan that includes unpaid interest, and a monthly premium of $500. If she dies during the grace period, which of the following insurance settlements would be permitted? $94,500 When are dividend payments received by a policyholder fully taxable? When all the premiums paid in have been fully recovered Which provision requires the application, the contract itself and any riders to be attached to establish a complete contract? The Entire Contract Provision The surrender charge schedule for a variable universal life policy generally ________ over time. Decreases Dividends if declared are paid __________. Annually A client purchases an individual disability income policy and receives the policy from the insurer 45 days after application. Upon receipt of the policy, the client typically has ______days to review and return the policy to receive a full refund for any reason. 10 The bank may require its borrowers to have a life insurance policy to secure a loan in the event of the borrower's death. Which provision gives the bank proportional protection but not control of the policy? Collateral Assignment Which of the following overall is the least expensive premium mode? Annually An insured with a participating life insurance policy receives annual dividends. She has opted for the insurer to use these funds to increase her overall amount of insurance. This would refer to which option: Paid-Up Additions On a variable universal life policy what is the difference between the cash value and the cash surrender values? The surrender charge Frank purchased his life insurance policy 5 years ago and named his wife, Jean, as his beneficiary, but two years later Jean divorced Frank and married Pete. Can Jean collect from Frank's life policy since he had a fatal heart attack last week? Yes, she is the beneficiary An insured has a $175,000 permanent life insurance policy and is having difficulty keeping up with the premium payments. Which Nonforfeiture Option would allow him to forego the premiums and retain the same face amount until the cash surrender value is exhausted? Extended Term In a whole life policy, cash value must be made available to borrow against after _____ years. 3 An insured bought a whole life policy 15 years ago and it has accumulated a cash value of several hundred dollars. She named her spouse as the owner at the time of purchase. Who has the right to change beneficiaries and access the cash value? The policyowner Which of the following annuities requires the producer to hold a securities registration (license) in order to sell it? Variable Which of the following Annuities is generally not backed by the insurer's general account assets? Variable How can an annuity payout an income benefit income tax free? Purchase the annuity within a Roth IRA account Generally, which of the following Annuities is not designed to guarantee the principal value of the policy in stable interest rate environments? Variable