NY Life Insurance Exam Review, Questions and answers, 2022/2023. Rated A

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NY Life Insurance Exam Review, Questions and answers, 2022/2023. Rated A Based on the Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? A. ... Insured's annual expenses B. Effect of inflation on income over time C. Predicted needs of the family after the insured's death D. Insured's current and future income - ✔✔C. Predicted needs of the family after the insured's death. The Human Life Value Approach to determining the value of an individual's life requires the calculation of probable future earnings of the insured, which involves wages, expenses, inflation, amount of time until retirement, and the time value of money. Predicted needs of the family after the insured's death are used in the needs approach Can the Superintendent investigate fraudulent claims if they occurred outside of the resident's state according to the Insurance Fraud Prevention Act? A. Yes. The Superintendent has the power to make an investigation within this state or outside of the state B. Yes, but only if it is a violation of another state's insurance law C. No. Because insurance is regulated by the state, all claims must occur within state boundaries D. No. If fraudulent acts are believed to have been committed, the Superintendent must notify the state's Superintendent or Commissioner. It will then become a federal matter - ✔✔A. Yes. The Superintendent has the power to make an investigation within this state or outside of the state If the insurance frauds bureau has reason to believe that a person is engaged or is about to engage in a fraudulent act, the Superintendent has the power to make an investigation within this state or outside the state Which settlement option allows the insurer to retain the face amount but pay some income based on gain on the proceeds to the beneficiary at regular intervals? A. Interest only B. Life income C. Fixed amount D. Fixed period - ✔✔A. Interest only Within the "interest only" option, the insurer retains policy proceeds and pays interest on the proceeds to the beneficiary at regular intervals. The insurer will usually guarantee an interest rate and even pay in excess of the rate quoted In order to be a licensed life settlement broker, a person must complete which of the following requirements? A. Post a surety bond B. Submit to a drug test C. Submit fingerprints D. Have been a licensed life producer for at least 6 months - ✔✔C. Submit fingerprints How long does a licensee have to notify the Superintendent of a change of address? A. 90 days B. Immediately C. 30 days D. 60 days - ✔✔C. 30 days The Superintendent must be notified within 30 days upon any of a change of primary residence or business address Which of the following would be deducted from the death benefit paid to a beneficiary, if a partial accelerated death benefit had been paid while the insured was still alive? A. Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit B. There are no deductions taken from death benefits C. Penalty imposed for early withdrawal of the death benefit, plus the amount of earnings lost by the insurance company in interest income C. 10% federal death benefit income tax, plus the amount of the accelerated benefit - ✔✔A. Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit If an insured withdraws a portion of the death benefit by the use of this rider, the benefit payable at death will be reduced by that amount, plus the amount of earnings lost by the insurance company in interest income Which of the following statements concerning a Simplified Employee Pension plan (SEP) in INCORRECT? A. SEPs allow the employer to make annual tax deductible contributions up to 25% of an employee's earned income B. SEPs have a higher tax deductible contribution limit than an IRA C. Employer contributions are not included int he employee's gross income D. SEPs are suitable for large companies - ✔✔D. SEPs are suitable for large companies An employee is joining a group insurance plan. In order to avoid having to prove insurability, what must the employee do? A. Join during the open enrollment period B. Provide medical records to the insurer C. Sign a statement of contributed good health D. Nothing: proof of insurability is never required in group policies - ✔✔A. Join during the open enrollment period If one applies for coverage after the open enrollment period, proof of insurability may be required in order to avoid adverse selection Which of the following best describes the MIB? A. It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance B. it is a government agency that collects C. It is a member organization that protects insured against insolvent insurers D. It is a ranking organization for health insurance - ✔✔A. It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance The Medical Information Bureau (MIB) is a nonprofit trade organization which receives adverse medical information from the insurance companies and maintains confidential medical impairment information on individuals A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits? A. Variable annuity B. Flexible payment annuity C. Deferred interest annuity D. Immediate annuity - ✔✔D. Immediate annuity An annuity purchased with a single lump-sum payment, with a 25-year fixed-period distribution will be most suitable for this arrangement A perspective insured receives a conditional receipt but dies before the policy is issued. The insurer will A. Pay the policy proceeds up to an established a limit B. Not pay the policy proceeds under any circumstances C. Automatically pay the policy proceeds D. Pay the policy proceeds only if it would have issued the policy - ✔✔D. Pay the policy proceeds only if it would have issued the policy The conditional receipt says that coverage will be effective either on the date of the application or the date of the medical exam, whichever occurs last Which of the following statements about the reinstatement provision is true? A. It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated B. It permits reinstatement within 10 years after a policy has lapsed C. It provides for reinstatement of a policy regardless of the insured's health D. It guarantees the reinstatement of a policy that has been surrendered for cash - ✔✔A. It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated Upon policy reinstatement, the policyowner will be required to pay all back premiums plus interest, and may be required to repay any outstanding loans and interest A client's policy lapsed in 2010 without being renewed. In what year can the insurance company destroy the file on this policy? A. 2012 B. 2013 C. 2015 D. 2016 - ✔✔D. 2016 According to New York law, insurers must keep policy records for 6 years after the date the policy is no longer in effect, or until the filing of a review of the record, whichever is longer What does "level" refer to in level term insurance? A. Interest rate B. Face amount C. Premium D. Cash value - ✔✔B. Face amount Level term policies maintain level death benefit (or face amount) throughout the term of the policy. In level term insurance, the premium also remains consistent over the years, unlike the premiums of many policies, which increase as the policyholder ages What type of life insurance is most commonly used for group rates? A. Decreasing term B. Annually renewable term C. Whole life D. Flexible premium whole life - ✔✔B. Annually renewable term Group insurance is usually written for employee-employer groups as annually renewable term insurance Which of the following is NOT a type of whole life insurance? A. Single premium B. Straight life C. Limited payment D. Increasing term - ✔✔D. Increasing term There are several types of whole life policies. The first three, Straight Life, Limited Payment, and Single Premium, are the basic forms of whole life. Increasing term is a type of term insurance Which of the following individuals must pass a written examination to be licensed as agents? A. An applicant who has a Chartered Life Underwriter (CLU) designation B. A resident of New York wishing to transact business in New York C. A nonresident licensee D. A licensee who was licensed on July 1, 1987, to represent any assessment corporation - ✔✔B. A resident of New York wishing to transact business in New York None of the above listed individuals must take and pass a written examination in New York to be licensed as an agent, except a New York resident wishing to act as an agent All of the following are personal uses of life insurance EXCEPT A. Cash accumulation B. Buy-sell agreement C. Survivor protection D. Estate creation - ✔✔B. Buy-sell agreement Which of the following applicants would NOT qualify for a Keogh Plan? A. Someone who works for a self-employed individual B. Someone who works 400 hours per year C. Someone who has been employed for more than 12 months D. Someone who is over 25 years of age - ✔✔B. Someone who works 400 hours per year A person must have worked at least 1,000 hours per year to be eligible for a Keogh Plan A tornado that destroys property would be an example of which of the following? A. A peril B. A pure risk C. A loss D. A physical hazard - ✔✔A. A peril A peril is the cause of loss insured against in an insurance policy All of the following are true of key person insurance EXCEPT A. The key employee is the insured B. The plan is funded by permanent insurance only C. There is no limitation on the number of key employee plans in force at any one time D. The employer is the owner, payor and beneficiary of the policy - ✔✔B. The plan is funded by permanent insurance only Key person coverage may be funded by any type of life insurance Which of the following would NOT be considered an insurance producer? A. An insurance broker B. A reinsurance intermediary C. An insurance agent D. An insurer's officer - ✔✔D. An insurer's officer Insurance provider that means any person required to be licensed to sell, solicit or negotiate insurance—including agents, brokers in intermediaries. Officers are not required to be licensed An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy? A. $20,000 B. $25,000 C. $50,000 D. The face amount will be determined by the insurer - ✔✔C. $50,000 The face of the term policy would be the same as the face amount provided under the whole life policy Which of the following riders will NOT cause the Death Benefit to increase? A. Accidental Death Rider B. Payor Benefit Rider C. Guaranteed Insurability Rider D. Cost of Living Rider - ✔✔B. Payor Benefit Rider Payor Benefit Rider does not increase the Death Benefit; it only pays the premium if the payor is disabled or dies. With Guaranteed Insurability Rider, the policyowner can increase DB at specified ages or events, i.e. marriage or birth of a child; Cost of Living Rider increases DB to keep pace with inflation; in Accidental Death Rider, if the insured dies from an accident, DB is a multiple of the Face Amount A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy? A. The policy's cash value B. A refund of premiums C. Nothing, since the insured was killed as a result of war D. The full death benefit - ✔✔D. The full death benefit War or Military Service Clause specifically excludes or limits the insurer's liability for losses caused by war or active military service. If a life insurance policy does not have that exclusion, the benefits are paid to the beneficiary, as if the insured died of any other cause When must insurable interest exist in a life insurance policy? A. At the time of loss B. At the time of application C. At the time of policy delivery D. When there's a change of the beneficiary - ✔✔B. At the [Show More]

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