Download NC Life Insurance Practice Exam Questions and more Exams Insurance law in PDF only on Docsity!
NC Life Insurance Practice Exam Questions
with correct answers
All |!|of |!|the |!|following |!|are |!|included |!|within |!|the |!|Insurance |!|Commissioner's |!| duties |!|EXCEPT a) |!|Conducting |!|investigation |!|of |!|all |!|domestic |!|insurers. b) |!|Reviewing |!|the |!|insurers' |!|annual |!|reports. c) |!|Writing |!|North |!|Carolina |!|insurance |!|laws. d) |!|Reporting |!|any |!|violations |!|of |!|insurance |!|laws |!|to |!|the |!|Attorney |!|General. |!| Writing |!|insurance |!|law |!|is |!|not |!|the |!|Insurance |!|Commissioner's |!|responsibility, |!| but |!|enforcing |!|the |!|law |!|is. |!|- |!|correct |!|answer |!| ✔ c) |!|Writing |!|North |!|Carolina |!| insurance |!|laws. Writing |!|insurance |!|law |!|is |!|not |!|the |!|Insurance |!|Commissioner's |!|responsibility, |!| but |!|enforcing |!|the |!|law |!|is. Which |!|of |!|the |!|following |!|insurance |!|providers |!|must |!|be |!|nonprofit |!|and |!|sell |!| insurance |!|only |!|to |!|its |!|members? a) |!|Reciprocal b) |!|Fraternal c) |!|Service d) |!|Mutual |!|- |!|correct |!|answer |!| ✔ b) |!|Fraternal
To |!|be |!|characterized |!|as |!|a |!|fraternal |!|benefit |!|society, |!|the |!|organization |!|must |!|be |!|nonprofit, |!|have |!|a |!|lodge |!|system |!|that |!|includes |!|ritualistic |!|work |!|and |!|maintain |!|a |!|representative |!|form |!|of |!|government |!|with |!|elected |!|officers. |!|Insurance |!|may |!| only |!|be |!|sold |!|to |!|members |!|of |!|the |!|society. A |!|married |!|couple |!|owns |!|a |!|permanent |!|policy |!|which |!|covers |!|both |!|of |!|their |!| lives |!|and |!|pays |!|the |!|death |!|benefit |!|only |!|upon |!|the |!|death |!|of |!|the |!|first |!|insured. |!| Which |!|policy |!|is |!|that? a)Second-to-Die b)Family |!|Income |!|Policy c)Joint |!|Life |!|Policy d)Survivorship |!|Life |!|Policy |!|- |!|correct |!|answer |!| ✔ c)Joint |!|Life |!|Policy Joint |!|life |!|policies |!|cover |!|the |!|lives |!|of |!|two |!|insureds; |!|rates |!|are |!|blended. |!|Upon |!| the |!|death |!|of |!|the |!|first |!|insured, |!|the |!|policy |!|ends. The |!|insured |!|under |!|a |!|$100,000 |!|life |!|insurance |!|policy |!|with |!|a |!|triple |!|indemnity |!| rider |!|for |!|accidental |!|death |!|was |!|killed |!|in |!|a |!|car |!|accident. |!|It |!|was |!|determined |!| that |!|the |!|accident |!|was |!|his |!|fault. |!|The |!|triple |!|indemnity |!|rider |!|in |!|the |!|policy |!| specifies |!|that |!|the |!|death |!|must |!|not |!|be |!|contributed |!|to |!|by |!|the |!|insured |!|in |!|any |!| manner. |!|In |!|this |!|case, |!|what |!|will |!|the |!|policy |!|beneficiary |!|receive? a)$ b)$50,000 |!|(50% |!|of |!|the |!|policy |!|value) c)$100, d)$300,000 |!|(triple |!|the |!|amount |!|of |!|policy |!|value) |!|- |!|correct |!|answer |!| ✔ c) $100,
c) |!|Consideration d) |!|Good |!|faith |!|- |!|correct |!|answer |!| ✔ c) |!|Consideration The |!|binding |!|force |!|in |!|any |!|contract |!|is |!|consideration. |!|Consideration |!|on |!|the |!| part |!|of |!|the |!|insured |!|is |!|the |!|payment |!|of |!|premiums |!|and |!|the |!|health |!| representations |!|made |!|in |!|the |!|application. |!|Consideration |!|on |!|the |!|part |!|of |!|the |!| insurer |!|is |!|the |!|promise |!|to |!|pay |!|in |!|the |!|event |!|of |!|loss. When |!|the |!|breadwinner |!|that |!|is |!|insured |!|by |!|a |!|Family |!|Policy |!|dies, |!|what |!|rights |!| are |!|provided |!|to |!|other |!|family |!|members |!|that |!|are |!|covered |!|under |!|the |!|policy? a) |!|They |!|can |!|convert |!|their |!|coverage |!|to |!|permanent |!|life |!|insurance |!|with |!| evidence |!|of |!|insurability .b) |!|Family |!|members |!|are |!|not |!|provided |!|any |!|rights. c) |!|They |!|can |!|surrender |!|the |!|coverage |!|for |!|its |!|cash |!|value. d) |!|They |!|can |!|convert |!|their |!|coverage |!|to |!|permanent |!|life |!|insurance |!|without |!| evidence |!|of |!|insurability. |!|- |!|correct |!|answer |!| ✔ d) |!|They |!|can |!|convert |!|their |!| coverage |!|to |!|permanent |!|life |!|insurance |!|without |!|evidence |!|of |!|insurability. Family |!|members |!|may |!|convert |!|their |!|term |!|coverage |!|to |!|permanent |!|insurance |!| if |!|requested |!|within |!|the |!|time |!|stated |!|in |!|the |!|policy. Forcing |!|a |!|client |!|to |!|buy |!|insurance |!|from |!|a |!|particular |!|lender |!|as |!|a |!|condition |!|of |!|granting |!|a |!|loan |!|is |!|defined |!|as a) |!|Defamation. b) |!|Coercion.
c) |!|Rebating. d) |!|Misleading |!|advertising. |!|- |!|correct |!|answer |!| ✔ b) |!|Coercion. These |!|are |!|all |!|considered |!|to |!|be |!|Unfair |!|Trade |!|Practices, |!|which |!|are |!|major |!| violations |!|that |!|can |!|lead |!|to |!|heavy |!|penalties. |!|Coercion, |!|for |!|example, |!|is |!|when |!|the |!|bank |!|won't |!|give |!|you |!|an |!|auto |!|loan |!|unless |!|you |!|agree |!|to |!|buy |!|auto |!| insurance |!|from |!|them. When |!|an |!|insurer |!|requires |!|a |!|written |!|proof |!|of |!|loss |!|after |!|notice |!|of |!|such |!|loss |!| has |!|been |!|given |!|by |!|the |!|insured |!|or |!|beneficiary, |!|the |!|company |!|must a) |!|Request |!|a |!|police |!|report |!|from |!|the |!|Department |!|of |!|Motor |!|Vehicles. b) |!|Furnish |!|a |!|blank |!|form |!|to |!|be |!|used |!|for |!|that |!|purpose. c) |!|Document |!|the |!|request |!|for |!|further |!|investigation. d) |!|Submit |!|the |!|loss |!|claim |!|to |!|underwriting |!|for |!|premium |!|review |!|and |!| resolution. |!|- |!|correct |!|answer |!| ✔ b) |!|Furnish |!|a |!|blank |!|form |!|to |!|be |!|used |!|for |!|that |!| purpose. When |!|any |!|company |!|under |!|any |!|insurance |!|policy |!|requires |!|a |!|written |!|proof |!|of |!|loss |!|after |!|notice |!|of |!|such |!|loss |!|has |!|been |!|given |!|by |!|the |!|insured |!|or |!| beneficiary, |!|the |!|company |!|or |!|its |!|representative |!|must |!|furnish |!|a |!|blank |!|form |!| to |!|be |!|used |!|for |!|that |!|purpose. Insurance |!|companies |!|are |!|required |!|to |!|provide |!|proof |!|of |!|loss |!|forms |!|to |!|the |!| claimant |!|within |!|how |!|many |!|days |!|after |!|receipt |!|of |!|notice |!|of |!|loss? a) |!| 15
c)Ordinary |!|life |!|policy d)Limited |!|pay |!|whole |!|life |!|- |!|correct |!|answer |!| ✔ a)Level |!|term A |!|20-year |!|term |!|policy |!|is |!|written |!|to |!|provide |!|a |!|level |!|death |!|benefit |!|for |!| 20 |!| years. Which |!|nonforfeiture |!|option |!|provides |!|coverage |!|for |!|the |!|longest |!|period |!|of |!| time? a)Accumulated |!|at |!|interest b)Reduced |!|paid-up c)Extended |!|term d)Paid-up |!|option |!|- |!|correct |!|answer |!| ✔ b)Reduced |!|paid-up The |!|reduced |!|paid-up |!|nonforfeiture |!|option |!|would |!|provide |!|protection |!|until |!| the |!|insured |!|reaches |!|100, |!|but |!|the |!|face |!|amount |!|is |!|reduced |!|to |!|what |!|the |!|cash |!|would |!|buy. Which |!|of |!|the |!|following |!|is |!|NOT |!|true |!|regarding |!|the |!|accumulation |!|period |!|of |!| an |!|annuity? |!| a)It |!|is |!|also |!|known |!|as |!|the |!|pay-in |!|period. b)It |!|would |!|not |!|occur |!|in |!|a |!|deferred |!|annuity. c)It |!|is |!|the |!|period |!|during |!|which |!|the |!|annuity |!|payments |!|earn |!|interest. d)It |!|is |!|the |!|period |!|over |!|which |!|the |!|owner |!|makes |!|payments |!|into |!|an |!|annuity. |!|- |!|correct |!|answer |!| ✔ b)It |!|would |!|not |!|occur |!|in |!|a |!|deferred |!|annuity.
The |!|"accumulation |!|period" |!|is |!|the |!|period |!|of |!|time |!|over |!|which |!|the |!|annuity |!| owner |!|makes |!|payments |!|(premiums) |!|into |!|an |!|annuity. |!|This |!|is |!|the |!|period |!|of |!| time |!|during |!|which |!|the |!|payments |!|earn |!|interest |!|and |!|grow |!|tax |!|deferred |!| (which |!|would |!|be |!|the |!|case |!|in |!|a |!|deferred |!|annuity). Life |!|insurance |!|death |!|proceeds |!|are a)Taxed |!|as |!|ordinary |!|income. b)Generally |!|not |!|taxed |!|as |!|income. c)Taxable |!|to |!|the |!|extent |!|that |!|they |!|exceed |!|7.5% |!|of |!|the |!|beneficiary's |!|adjusted |!|gross |!|income. d)Taxed |!|as |!|a |!|capital |!|gain. |!|- |!|correct |!|answer |!| ✔ b)Generally |!|not |!|taxed |!|as |!| income. Life |!|insurance |!|death |!|benefits |!|are |!|generally |!|not |!|taxed |!|as |!|income. Which |!|of |!|the |!|following |!|is |!|TRUE |!|regarding |!|an |!|indeterminate |!|premium |!|whole |!|life |!|policy? a) |!|The |!|premium |!|is |!|lower |!|in |!|the |!|first |!|year |!|of |!|the |!|policy; |!|then |!|it |!|is |!|gradually |!|raised |!|every |!|year. b) |!|The |!|premium |!|is |!|level |!|throughout |!|the |!|life |!|of |!|the |!|policy. c) |!|The |!|premium |!|is |!|usually |!|higher |!|in |!|the |!|first |!|few |!|years |!|of |!|the |!|policy. d) |!|The |!|premium |!|can |!|be |!|raised |!|up |!|to |!|a |!|guaranteed |!|maximum |!|rate. |!|- |!|correct |!|answer |!| ✔ d) |!|The |!|premium |!|can |!|be |!|raised |!|up |!|to |!|a |!|guaranteed |!|maximum |!| rate.
The |!|initial |!|amount |!|of |!|credit |!|life |!|insurance |!|may |!|not |!|exceed |!|the |!|total |!| amount |!|repayable |!|under |!|the |!|contract |!|of |!|indebtedness. All |!|of |!|the |!|following |!|statements |!|are |!|true |!|regarding |!|installments |!|for |!|a |!|fixed |!| period |!|annuity |!|settlement |!|option |!|EXCEPT a)The |!|insurer |!|determines |!|the |!|amount |!|for |!|each |!|payment. b)It |!|is |!|a |!|life |!|contingency |!|option. c)It |!|will |!|pay |!|the |!|benefit |!|only |!|for |!|a |!|designated |!|period |!|of |!|time. d)The |!|payments |!|are |!|not |!|guaranteed |!|for |!|life. |!|- |!|correct |!|answer |!| ✔ b)It |!|is |!|a |!| life |!|contingency |!|option. Under |!|the |!|installments |!|for |!|a |!|fixed |!|period |!|annuity |!|settlement |!|option, |!|the |!| annuitant |!|selects |!|the |!|time |!|period |!|for |!|the |!|benefits; |!|the |!|insurer |!|determines |!| how |!|much |!|each |!|payment |!|will |!|be. |!|This |!|option |!|pays |!|for |!|a |!|specific |!|amount |!|of |!|time |!|only, |!|and |!|there |!|are |!|no |!|life |!|contingencies. The |!|policyowner |!|pays |!|for |!|her |!|life |!|insurance |!|annually. |!|Until |!|now, |!|she |!|has |!| collected |!|a |!|nontaxable |!|dividend |!|check |!|each |!|year. |!|She |!|has |!|decided |!|that |!|she |!|would |!|rather |!|use |!|the |!|dividends |!|to |!|help |!|pay |!|for |!|her |!|next |!|premium. |!|What |!| option |!|would |!|allow |!|her |!|to |!|do |!|this? a)Reduction |!|of |!|premium b)Paid-up |!|addition c)Accumulation |!|at |!|interest d)Cash |!|option |!|- |!|correct |!|answer |!| ✔ a)Reduction |!|of |!|premium
The |!|Reduction |!|of |!|Premium |!|option |!|allows |!|the |!|policyholder |!|to |!|apply |!|policy |!| dividends |!|toward |!|the |!|next |!|year's |!|premium. |!|The |!|dividend |!|is |!|subtracted |!|from |!|the |!|premium |!|amount, |!|yielding |!|the |!|new |!|premium |!|due |!|for |!|the |!|next |!|year. An |!|insurer |!|receives |!|a |!|report |!|regarding |!|a |!|potential |!|insured |!|that |!|includes |!|the |!|insured's |!|financial |!|status, |!|hobbies |!|and |!|habits. |!|What |!|type |!|of |!|a |!|report |!|is |!| that? a)Inspection |!|Report b)Medical |!|Information |!|Bureau's |!|report c)Agent's |!|Report d)Underwriter's |!|Report |!|- |!|correct |!|answer |!| ✔ a)Inspection |!|Report Inspection |!|reports |!|cover |!|moral |!|and |!|financial |!|information |!|regarding |!|a |!| potential |!|insured, |!|usually |!|supplied |!|by |!|private |!|investigators |!|and |!|credit |!| agencies. |!|Companies |!|that |!|use |!|inspection |!|reports |!|are |!|subject |!|to |!|the |!|rules |!| outlined |!|in |!|the |!|Fair |!|Credit |!|Reporting |!|Act. Two |!|attorneys |!|operate |!|their |!|practice |!|as |!|a |!|partnership. |!|They |!|want |!|to |!|start |!|a |!|program |!|through |!|their |!|practice |!|that |!|will |!|provide |!|retirement |!|benefits |!|for |!| themselves |!|and |!|three |!|employees. |!|They |!|would |!|likely |!|choose a)403(b) |!|plan. b)401(k) |!|plan. c)HR-10 |!|(Keogh |!|Plan). d)Section |!| 457 |!|Deferred |!|Compensation |!|Plan. |!|- |!|correct |!|answer |!| ✔ c)HR-10 |!| (Keogh |!|Plan).
deferred |!|basis |!|each |!|year |!|and |!|earns |!|either |!|the |!|guaranteed |!|contract |!|rate |!|or |!| the |!|current |!|rate, |!|whichever |!|is |!|higher. A |!|Universal |!|Life |!|Insurance |!|policy |!|is |!|best |!|described |!|as |!|a/an a)Annually |!|Renewable |!|Term |!|policy |!|with |!|a |!|cash |!|value |!|account. b)Variable |!|Life |!|with |!|a |!|cash |!|value |!|account. c)Whole |!|Life |!|policy |!|with |!|two |!|premiums: |!|target |!|and |!|minimum. d)Flexible |!|Premium |!|Variable |!|Life |!|policy. |!|- |!|correct |!|answer |!| ✔ a)Annually |!| Renewable |!|Term |!|policy |!|with |!|a |!|cash |!|value |!|account. A |!|universal |!|policy |!|has |!|two |!|components: |!|an |!|insurance |!|component |!|and |!|a |!| cash |!|account. |!|The |!|insurance |!|component |!|(or |!|the |!|death |!|protection) |!|of |!|a |!| universal |!|life |!|policy |!|is |!|always |!|annual |!|renewable |!|term |!|insurance. Which |!|option |!|for |!|Universal |!|life |!|allows |!|the |!|beneficiary |!|to |!|collect |!|both |!|the |!| death |!|benefit |!|and |!|cash |!|value |!|upon |!|the |!|death |!|of |!|the |!|insured? a)Corridor |!|option b)Variable |!|option c)Option |!|A d)Option |!|B |!|- |!|correct |!|answer |!| ✔ d)Option |!|B Under |!|Option |!|B |!|the |!|death |!|benefit |!|includes |!|the |!|annual |!|increase |!|in |!|cash |!| value |!|so |!|that |!|the |!|death |!|benefit |!|gradually |!|increases |!|each |!|year |!|by |!|the |!| amount |!|that |!|the |!|cash |!|value |!|increases. |!|At |!|any |!|point |!|in |!|time, |!|the |!|total |!|
death |!|benefit |!|will |!|always |!|be |!|equal |!|to |!|the |!|face |!|amount |!|of |!|the |!|policy |!|plus |!| the |!|current |!|amount |!|of |!|cash |!|value. All |!|of |!|the |!|following |!|entities |!|regulate |!|variable |!|life |!|policies |!|EXCEPT a)The |!|Guaranty |!|Association. b)Federal |!|government. c)The |!|SEC. d)The |!|Insurance |!|Department. |!|- |!|correct |!|answer |!| ✔ a)The |!|Guaranty |!| Association. Variable |!|life |!|insurance |!|is |!|regulated |!|by |!|both |!|the |!|state |!|and |!|federal |!| government, |!|as |!|well |!|as |!|the |!|Insurance |!|Department, |!|and |!|the |!|SEC All |!|of |!|the |!|following |!|are |!|true |!|about |!|variable |!|products |!|EXCEPT a)The |!|minimum |!|death |!|benefit |!|is |!|guaranteed. b)The |!|cash |!|value |!|is |!|not |!|guaranteed. c)Policyowners |!|bear |!|the |!|investment |!|risk. d)The |!|premiums |!|are |!|invested |!|in |!|the |!|insurer's |!|general |!|account. |!|- |!|correct |!| answer |!| ✔ d)The |!|premiums |!|are |!|invested |!|in |!|the |!|insurer's |!|general |!|account. Insurers |!|selling |!|variable |!|products |!|invest |!|their |!|customer's |!|monies |!|in |!|a |!| separate |!|account, |!|which |!|is |!|very |!|similar |!|to |!|a |!|mutual |!|fund. |!|Since |!|there |!|is |!|no |!|guaranteed |!|rate |!|of |!|return, |!|customers |!|must |!|bear |!|the |!|investment |!|risk.
Any |!|person |!|who |!|violates |!|a |!|cease |!|and |!|desist |!|order |!|of |!|the |!|Commissioner |!| pertaining |!|to |!|consumer |!|information |!|privacy |!|may |!|be |!|subject |!|to |!|which |!|of |!|the |!|following |!|penalties? a)Imprisonment |!|for |!|up |!|to |!| 5 |!|years b)Imprisonment |!|for |!|up |!|to |!| 1 |!|year c)A |!|monetary |!|fine |!|up |!|to |!|$5,000 |!|for |!|each |!|violation d)A |!|monetary |!|fine |!|up |!|to |!|$10,000 |!|for |!|each |!|violation |!|- |!|correct |!|answer |!| ✔ d)A |!| monetary |!|fine |!|up |!|to |!|$10,000 |!|for |!|each |!|violation Violations |!|of |!|the |!|cease |!|and |!|desist |!|order |!|pertaining |!|to |!|consumer |!| information |!|privacy |!|will |!|result |!|in |!|a |!|monetary |!|fine |!|of |!|not |!|more |!|than |!| $10,000 |!|for |!|each |!|violation. Under |!|SIMPLE |!|plans, |!|participating |!|employees |!|may |!|defer |!|up |!|to |!|a |!|specified |!| amount |!|each |!|year, |!|and |!|the |!|employer |!|then |!|makes |!|a |!|matching |!|contribution |!| up |!|to |!|an |!|amount |!|equal |!|to |!|what |!|percent |!|of |!|the |!|employee's |!|annual |!|wages? a) b) c) d)7 |!|- |!|correct |!|answer |!| ✔ b) Under |!|SIMPLE |!|plans, |!|participating |!|employees |!|may |!|defer |!|up |!|to |!|a |!|specified |!| amount |!|each |!|year, |!|and |!|the |!|employer |!|can |!|then |!|contribute |!|up |!|to |!|an |!|amount |!|equal |!|to |!|3% |!|of |!|the |!|employees' |!|annual |!|compensation. |!|Contributions |!|and |!| earnings |!|are |!|both |!|tax-deferred |!|until |!|funds |!|are |!|withdrawn.
In |!|cases |!|when |!|an |!|applicant |!|for |!|insurance |!|is |!|blind |!|or |!|deaf, |!|the |!|insurer |!| underwriting |!|the |!|policy |!|may |!|do |!|which |!|of |!|the |!|following? a)Limit |!|the |!|amount |!|or |!|type |!|of |!|coverage |!|available |!|to |!|the |!|applicant b)Apply |!|the |!|same |!|standards |!|as |!|are |!|used |!|for |!|applicants |!|whose |!|sight |!|and |!| hearing |!|are |!|not |!|impaired. c)Charge |!|a |!|different |!|rate |!|for |!|the |!|same |!|coverage |!|based |!|on |!|increased |!|risk. d)Refuse |!|to |!|insure |!|the |!|applicant |!|because |!|of |!|adverse |!|risk. |!|- |!|correct |!|answer |!| ✔ b)Apply |!|the |!|same |!|standards |!|as |!|are |!|used |!|for |!|applicants |!|whose |!|sight |!|and |!| hearing |!|are |!|not |!|impaired. Insurers |!|cannot |!|refuse |!|to |!|insure |!|or |!|refuse |!|to |!|continue |!|to |!|insure |!|an |!| individual, |!|limit |!|the |!|amount, |!|extent, |!|or |!|kind |!|of |!|coverage |!|available |!|to |!|an |!| individual, |!|or |!|charge |!|an |!|individual |!|a |!|different |!|rate |!|for |!|the |!|same |!|coverage, |!| solely |!|because |!|of |!|blindness |!|or |!|partial |!|blindness, |!|or |!|deafness |!|or |!|partial |!| deafness. Which |!|of |!|the |!|following |!|Life |!|Insurance |!|policies |!|would |!|be |!|considered |!|interest |!|sensitive? a)Increasing |!|term b)Universal |!|life c)Adjustable |!|life d)Whole |!|life |!|- |!|correct |!|answer |!| ✔ b)Universal |!|life
A |!|Pure |!|Life |!|Annuity |!|has |!|the |!|potential |!|for |!|providing |!|the |!|maximum |!|income |!| per |!|dollar |!|of |!|premium |!|if |!|the |!|annuitant |!|lives |!|beyond |!|their |!|life |!|expectancy. |!| However, |!|if |!|the |!|annuitant |!|dies |!|before |!|his |!|or |!|her |!|life |!|expectancy, |!|and |!| before |!|the |!|total |!|benefit |!|has |!|been |!|paid |!|out, |!|payments |!|cease |!|and |!|there |!|is |!| no |!|refund |!|of |!|payments |!|to |!|survivors. Which |!|of |!|the |!|following |!|determines |!|the |!|cash |!|value |!|of |!|a |!|variable |!|life |!|policy? a)The |!|company's |!|general |!|account b)The |!|policy's |!|guarantees. c)The |!|premium |!|mode d)The |!|performance |!|of |!|the |!|policy |!|portfolio |!|- |!|correct |!|answer |!| ✔ d)The |!| performance |!|of |!|the |!|policy |!|portfolio The |!|cash |!|value |!|of |!|a |!|variable |!|life |!|policy |!|is |!|not |!|guaranteed |!|and |!|fluctuates |!| with |!|the |!|performance |!|of |!|the |!|portfolio |!|in |!|which |!|the |!|premiums |!|have |!|been |!| invested |!|by |!|the |!|insurer. Which |!|of |!|the |!|following |!|acts |!|would |!|be |!|grounds |!|for |!|a |!|person's |!|license |!| suspension, |!|revocation, |!|or |!|refusal |!|to |!|renew? a)An |!|agent |!|fails |!|to |!|pay |!|state |!|income |!|tax. b)An |!|agent |!|unknowingly |!|misrepresents |!|the |!|terms |!|of |!|an |!|insurance |!|contract. c)An |!|agent |!|refuses |!|to |!|offer |!|an |!|explanation |!|to |!|a |!|policyholder |!|concerning |!|the |!|coverage |!|provided |!|by |!|another |!|insurer. d)A |!|broker |!|does |!|not |!|return |!|a |!|client's |!|calls |!|on |!|timely |!|basis. |!|- |!|correct |!|answer |!| ✔ a)An |!|agent |!|fails |!|to |!|pay |!|state |!|income |!|tax.
Failure |!|to |!|pay |!|state |!|income |!|tax |!|is |!|a |!|violation |!|subject |!|to |!|license |!|suspension |!| or |!|revocation; |!|all |!|the |!|other |!|examples |!|are |!|not. Which |!|of |!|the |!|following |!|is |!|NOT |!|true |!|about |!|a |!|joint |!|and |!|survivor |!|annuity |!| benefit |!|option? a)Payments |!|stop |!|after |!|the |!|first |!|death |!|among |!|the |!|annuitants. b)A |!|period |!|certain |!|option |!|may |!|be |!|included. c)This |!|option |!|guarantees |!|income |!|for |!|two |!|or |!|more |!|recipients. d)The |!|surviving |!|annuitant |!|may |!|receive |!|reduced |!|payments. |!|- |!|correct |!|answer |!| ✔ a)Payments |!|stop |!|after |!|the |!|first |!|death |!|among |!|the |!|annuitants. A |!|joint |!|and |!|survivor |!|annuity |!|will |!|pay |!|until |!|the |!|last |!|annuitant |!|has |!|died; |!| however, |!|the |!|surviving |!|annuitant |!|may |!|receive |!|reduced |!|payments. An |!|insured |!|buys |!|a |!|5-year |!|level |!|premium |!|term |!|policy |!|with |!|a |!|face |!|amount |!|of |!|$10,000. |!|The |!|policy |!|also |!|contains |!|renewability |!|and |!|convertibility |!|options. |!| When |!|the |!|insured |!|renews |!|the |!|policy |!|in |!| 5 |!|years, |!|what |!|will |!|happen |!|to |!|the |!| premium? a)It |!|will |!|decrease |!|for |!|the |!|new |!|5-year |!|term |!|since |!|the |!|insured |!|is |!|now |!|a |!| lesser |!|risk |!|to |!|the |!|company. b)It |!|will |!|increase |!|each |!|year |!|during |!|the |!|next |!| 5 |!|years |!|as |!|the |!|face |!|amount |!| increases |!|each |!|year. c)It |!|will |!|increase |!|because |!|the |!|insured |!|will |!|be |!| 5 |!|years |!|older |!|than |!|when |!|the |!| policy |!|was |!|originally |!|purchased.
