VA Life and Annuities Prep Test II

1.

2 points

All the following are true regarding the conversion privilege EXCEPT

Individual policy is a term policy

Must be completed within 31 days

Individual policy is based on the worker's attained age, health, sex, etc

Must be on the job for 5 years to keep the same face amount

2.

2 points

An insurer can withhold a policy loan for up to

1 Month

6 Months

3 Months

9 Months

3.

2 points

All of the following are the broad powers and duties of the State Corporation Commission EXCEPT

Create insurance laws for both the federal and state government

Regulate the affairs of the insurance department

License and examine insurers and producers

Execute and regulate insurance laws

4.

2 points

Which of the following death benefit option of a universal life policy pays both the death benefit and the cash values to a designated beneficiary?

There are no death benefit options

Option A

Option A or B

Option B

5.

2 points

In a life insurance policy, when must insurable interest exist?

At anytime

At the time of the application

When the death proceeds are paid out

When the policy is delivered

6.

2 points

Who notifies the Commission of an agent's appointment?

The insurer

The beneficiary

The policy owner

The agent

7.

2 points

An agent position of financial trust that requires exercising a degree of professional care and maintaining separate accounts is known as

Fiduciary Trust

Financial Capacity

Financial Trust

Fiduciary Capacity

8.

2 points

How often do domestic insurers have to be examined by the Commission?

Once every 3 years

Once every 5 years

Once every year

Once every 2 years

9.

2 points

Information obtained through interviews with associates, friends and neighbors of the consumer is

A criminal history report

A consumer report

A paramedic report

An Investigative consumer report

10.

2 points

What is the purpose of the Insurance Guaranty Association?

To protect insurers who have filed bankruptcy

To protect policy owners, insureds and beneficiaries from the insolvency of an insurance company

To protect annuitants from inflations

To protect the Commission from lawsuits

11.

2 points

Which of following is NOT a general requirement of a qualified plan?

No vesting reguirement

Must be approved by the IRS

Must be formally written and comunicated to the employees

Must be permanent

12.

2 points

Under the Insurance Guaranty Association, what is the maximum aggregate on one life?

300,000 but not more than 100,000 in cash value

100,000 but not more than 25,000 in cash value

300,000 but not more than 75,000 in cash value

100,000 but not more than 50,000 in cash value

13.

2 points

What happens to an unpaid policy loan at the insured's death?

Any outstanding loan balance plus interest will be added to the beneficiary's taxes

Any outstanding loan balance plus interest will be deducted from the face amount

Any outstanding loan balance plus interest will be pardoned

Any outstanding loan balance plus interest will be withdrawn from the policy owner's bank account

14.

2 points

How long must agents keep records?

5 years

4 years

3 years

Every Year

15.

2 points

Which rider allows early payment of the death benefit to the insured?

Accelerated Death Benefit

Waiver of Premium

Guaranteed Insurability

Accidental Death

16.

2 points

When does an insurance policy go in effect?

When the first premium is paid and the application confirmation number is emailed

When the first premium is paid and the policy is delivered

When the first premium is paid and the application is in underwriting

When the first premium is paid and the policy is faxed

17.

2 points

Viatical settlement broker must receive a license from the

Securities Exchange Commission

State Corporation Commission

Insurance Company

Investment Company

18.

2 points

How soon can payments begin in a deferred annuity?

After one year

As long as there's 100,000 paid, income payments begin at anytime

As long as there's 50,000 paid, income payments begin at anytime

Within one year

19.

2 points

A replacing insurance company must notify the existing company regarding a replacement a policy within

15 days

10 days

30 days

5 days

20.

2 points

All of the following are exempt from the licensing requirements EXCEPT

Directors

Officers

Employees

Agents

21.

2 points

All of the following are included in a buyer's guide EXCEPT

Basic information about life insurance policies

Comparison of policy cost

Generic name and location of an insurance company

Specific information pertaining to a policy

22.

2 points

The insurer must keep records of all its advertisements on file for

4 years

5 years

7 years

3 years

23.

2 points

When replacing an existing policy, an agent must

Have the client read the notice regarding replacement silently and sign it

Have the client repeat every line of the notice regarding replacement after them before they both sign

Read the notice regarding replacement silently before having the client to sign

Read the notice regarding replacement aloud to the client and have both of them to sign

24.

2 points

All the following are activities of daily living when it pertains to the accelerated benefits EXCEPT

Eating

Dressing

Bathing

Sleeping

25.

2 points

Who has all the rights in an annuity contract?

The annuiant

The insurance company

The owner

The beneficiary

26.

2 points

All of the following are nonforfeiture options EXCEPT

Reduced Paid Up

Cash Surrender

Reduction of Premium

Extended Term

27.

2 points

All of the following authorities regulate variable life policies EXCEPT

Financial Industry Regulatory Authority

Securities Exchange Commission

New York Stock Exchange

State and Federal Government

28.

2 points

Unknowingly violating an insurance law is a fine of

No fine

5,000

1,000

10,000

29.

2 points

All of the following can contribute to an individual retirement account EXCEPT

71 year old Barber

42 year old Professor

29 year old Gymnast

57 year old Scientist

30.

2 points

Which dividend option increases the death benefit?

Cash

Accumulation at Interest

Paid Up Additions

Paid Up Option

31.

2 points

An absolutely true statement upon which the validity of the insurance policy depends is a

Fact

Policy

Representation

Warranty

32.

2 points

A transaction in which a new policy or contract is to be purchased and an existing policy or contract lapsed, surrendered or terminated is known as

Reduction

Replacement

Rebating

Reinstatement

33.

2 points

How is social security funded?

Taxes imposed on a worker's earned income

Payments withdrawn from a checking account

Payments advanced by employer before pay cycle

Taxes imposed on a worker's benefits

34.

2 points

Which of the following is NOT a settlement option?

Cash (Lump Sum)

Fixed Monthly Installments

Interest Only

Life Income

35.

2 points

When it comes to the suitability of an annuity, an agent must make reasonable efforts to obtain all the following information EXCEPT

The consumer's financial status

The consumers investment objectives

The consumer's insurability

The consumer's tax status

36.

2 points

What happens to the benefit if the annuitant dies during the accumulation period?

The beneficiary will receive 50% of the amount paid into the plan and the cash value

The beneficiary will receive the amount paid into the plan or the cash value, whichever is greater

The beneficiary will receive the amount paid into the plan or the cash value, whichever is less

The beneficiary will only receive the cash value

37.

2 points

An agent who has more than one license, must have a minimum of

8 hours in one category for continuing education

3 hours in one category for continuing education

12 hours in one category for continuing education

6 hours in one category for continuing education

38.

2 points

What is the purpose of the Fair Credit Reporting Act?

To protect insurance companies from lawsuits

To protect consumers against the circulation of inaccurate or obsolete information

To protect consumers from the insolvency of an insurance company

To protect insurance companies from nonpayment of premiums

39.

2 points

A business entity acting as an insurance producer is required to obtain

A temporary license

An insurance producer license

A business license

A referral license

40.

2 points

What constitutes rebating?

Charging higher premiums to transgenders

Orally degrading another insurance company

Incorrectly explaining the features of a policy

Premiums payable on the policy

41.

2 points

What constitutes the entire contract?

The policy, itself

The policy and a disclosure authorization form

The policy and a copy of the application, along with any riders or amendments

The policy and a buyer's guide

42.

2 points

If an agent is convicted of a felony or have administrative actions taken against them in another state, they must report it within

60 Days

10 Days

30 Days

15 Days

43.

2 points

What is issued to an agent who must stop engaging in improper business actions or committing violations?

Cease and Desist Order

Cease and Desease Order

Cease and Deceit Order

Cease and Defeat Order

44.

2 points

All of the following are characteristics of term life insurance EXCEPT

Pure death protection

No cash values

Temporary coverage

Endows at age 100

45.

2 points

Which of the following provision prevents the unintentional lapse of a policy for nonpayment of premium?

Free Look Period

Grace Period

Accumulation Period

Annuity Period

46.

2 points

A producer may receive no more than this percentage of their required credits for continuing education courses provided by insurance companies

75%

85%

65%

50%

47.

2 points

What is underwriting?

Writing application process

Beneficiary and policy owner designation process

Risk selection and classification process

Types of policy decision process

48.

2 points

For what reason may the Commission revoke or suspend a producer's license?

Having no felonies

Paying state income taxes

Obtaining a license through misrepresentation

Providing correct information

49.

2 points

How does continuous premium straight life differ from 20 year limited pay life?

Premiums for straight life increases every year, while premiums for 20-year decreases every 5 years

Premiums for straight life are high, while premiums for 20-year are low

Premiums for straight life spreads over the insured's life time, while premiums for 20-year is condensed to 20 years

Premiums for straight life endows in 20 years, while premiums for 20-year endows at age 100

50.

2 points

What is the maximum policy loan rate in VA?

No maximum interest rate

10%

5%

8%