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| Section | Weight | Objectives |
|---|---|---|
| Insurance Regulation | 12% | - Change of address and contact information - Assumed business names - Renewal and nonrenewal - Resident and nonresident rules - Licensing requirements - Continuing education requirements - Reporting convictions and disciplinary actions - Temporary licenses |
| Life Insurance Product Knowledge | - Modified Endowment Contracts and taxation - Cash value, dividends, policy loans and surrenders - Section 1035 exchanges and rollover rules - Policy provisions and types - Settlement options and beneficiary provisions |
1. All the following policies qualify for a 1035 Exchange EXCEPT
A) an annuity to another annuity.
B) an annuity to a whole life policy.
C) a whole life policy to another whole life policy.
D) a whole life policy to an annuity.
2. In reference to life Insurance in contract law, a person MOST likely will have an insurable interest in insuring
a person's life If
A) any type of distant family relationship exists with the insured party.
B) any type of business relationship exists between the insured party and the beneficiary.
C) the interest exists at the time of death.
D) the interest exists at the time of application.
3. Generally, If a life application Is NOT prepaid, the effective date of coverage begins on the date the
A) company underwriter approves the risk.
B) application is signed.
C) application is postmarked and mailed to the insurer.
D) policy is delivered and accepted.
4. Reinsurers are a specialized branch of the insurance industry because they
A) keep premiums low.
B) provide alternative means.
C) Insure insurers.
D) provide insurance to otherwise uninsurable individuals.
5. A modified endowment contract (MEC) receives different tax treatment on pre-death distributions than other
life Insurance policies because the modified endowment policy
A) tends to be an investment vehicle.
B) does not provide for loans to the policyowner.
C) generally pays dividends to the policyowner.
D) has a larger cash surrender value.
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: C | Question # 5 Answer: A |
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