Life Insurance Exam

Defamation occurs when a producer makes a false statement intended to

malign another insurer

In order to terminate a producer's appointment, the insurer MUST

send notice of the termination to the Commissioner of Insurance

A producer has returned part of his commission to the insured as an inducement to purchase the insurance. This illegal action is called

rebating

J is a producer who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of?

Twisitng

J the producer makes false statements to a prospective client about the projected dividends for a policy. J may be found guilty of

misrepresentation

Michael the insurance producer acts in a fiduciary capacity when conducting business with all of these principals EXCEPT

the Commissioner of Insurance

ABC Insurance Company is replacing an existing life policy from XYZ Insurance Company. ABC Insurance Company must provide which of the following documents to XYZ Insurance Company?

A policy summary

Any criminal charges taken against a producer must be reported to the Commissioner of Insurance by the producer within how many days of the final disposition?

30

The Life and Health Insurance Guaranty Association

assists in the prevention of insurer insolvencies

What is the purpose of the Mississippi Life and Health Insurance Guaranty Association?

Ensures that claims filed against insolvent insurance companies will be paid

Which of the following is NOT a valid reason for the Commissioner of Insurance to revoke a producer's license?

Producer is insolvent

In Mississippi, an insurance company formed under the laws of Mexico is called a(n)

alien company

What is a responsibility of the Commissioner of Insurance?

Administering insurance laws

What is the requirement for maintaining an individual Mississippi producer license?

Completing 24 hours of continuing education every 2 years

Which of the following actions must be taken by an insurance company that wishes to conduct business in Mississippi?

Acquire a certificate of authority

Which of these is NOT a duty of the Commissioner of Insurance?

Create new insurance laws

Which of the following would be a valid reason for suspending or revoking an insurance producer's license?

The producer has misappropriated money held in a fiduciary capacity

Replacement can be defined as

exchanging an existing policy for a new policy

The Rules Governing Life Insurance and Annuity Replacements do NOT apply to

Credit life

The Rules Governing Life Insurance and Annuity Replacements were created to

reduce the opportunity for misrepresentation and incomplete disclosure

Which of the following is NOT a situation that involves life insurance policy replacement?

Converting a term policy to a permanent policy with the same insurer

Which of these actions does NOT constitute life insurance policy replacement?

Convert term coverage to a whole life policy

Which of these contracts fall under replacement regulations?

Ordinary Life

A brochure that contains untrue statements which criticize the financial condition of an insurance company is an example of which of the following Unfair Trade Practices?

Defamation

A hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the Commissioner is required to

give written notice to the producer

A producer must notify the Commissioner within ___ days of a felony conviction.

30

A producer who intentionally violates a cease and desist order could receive a fine of up to _______ per violation.

1,000

All of these are considered a producer's breach of fiduciary duty EXCEPT

Allowing premiums to be submitted electronically

An insurance company formed in a country other than the United States is called a(n) ______ company.

Alien

Before holding a hearing regarding a producer's unfair or deceptive practice, the Commissioner of Insurance MUST give __ days notice

10

In a Key Employee life insurance policy, the third-party owner can be all of the following, EXCEPT:

Insured

What is considered a valid reason for small businesses to insure the lives of its major shareholders?

Fund a buy-sell agreement

What does a 401(k) plan generally provide its participants?

Salary-deferral contributions

Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?

Ordinary income tax and a 10% tax penalty for early withdrawal

A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?

Income taxes plus a 10% penalty tax on $30,000

When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n):

Anti-Money Laundering violation

Which of the following does Social Security NOT provide benefits for?

Dismemberment

A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a:

profit-sharing plan

One becomes eligible for Social Security disability benefits after having been disabled for:

5 months

Which of these factors do NOT play a role in the underwriting of a life insurance policy?

Martial Status

What type of life insurance incorporates flexible premiums and an adjustable death benefit?

Universal Life

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the:

applicant’s physician

D the agent met with a prospect and ended up selling an insurance policy. While filling out the insurance application, D makes a mistake. In this situation, D MUST

correct the information and have the prospect initial the change

The amount of monthly disability benefits payable under Social Security is affected by which of the following factors?

Amount of the benefits available from other sources

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?

Decreasing term

Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to file for Social Security disability benefits?

5

A(n) __________ term life policy is normally used when covering an insured's mortgage balance.

decreasing

All of these insurance products require an agent to have proper FINRA securities registration in order to sell them, EXCEPT for:

Modified Whole Life

Additional coverage can be added to a Whole Life policy by adding a(n):

decreasing term rider

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?

30 pay life

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?

20,000 death benefit

Which of these Nonforfeiture Options continue a build-up of cash value?

Reduced paid-up

K is an insured under a life insurance policy owned by a third party. Which of these statements is true?

K has no ownership rights

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 federal income tax withholding

Credit life insurance is typically issued with which of the following types of coverage?

Decreasing term