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EXAMFX PRACTICE STUDY SHEET 2026
ACCURATE QUESTION AND ANSWER
DIGEST
◉ What is another name for interest-sensitive whole life insurance? Answer: Current assumption life ◉ The Director is asked to examine documentation regarding the investigation of a life insurance claim. The Director can expect to find all of the following in the records EXCEPT Answer: An expert's conclusions regarding the initial investigation. ◉ How long must a standard insurance transaction remain on file? Answer: 5 years ◉ Which of the following entities issues Certificates of Authority? Answer: Director ◉ Life insurance policies that have been in force for three years must provide for maximum policy loan interest rate of not more than Answer: 8% per year.
◉ If the Director receives written notice demanding a hearing regarding an order, and if the order is scheduled to go into effect during the trial, then the order will be delayed. This is called Answer: Stay of Action. ◉ Which of the following best describes a misrepresentation? Answer: Issuing sales material with exaggerated statements about policy benefits ◉ How many continuing education credits must be completed every 2 years? Answer: 24 ◉ When transacting business in this state an insurer formed under the laws of another country is known as a/an Answer: Alien insurer. ◉ Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT Answer: Conditions
◉ The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? Answer: Interest only option ◉ Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must Answer: Respond to the consumer's complaint. ◉ Who is the owner and who is the beneficiary on a Key Person Life Insurance policy? Answer: The employer is the owner and beneficiary. ◉ Which of the following is another term for the accumulation period of an annuity? Answer: Pay-in period ◉ Which of the following statements is correct regarding a whole life policy? Answer: The policyowner is entitled to policy loans.
◉ Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary? Answer: Life income with period certain ◉ All of the following would be different between qualified and nonqualified retirement plans EXCEPT Answer: Taxation on accumulation ◉ A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability? Answer: Proof of insurability is not required. ◉ Which of the following is NOT true regarding the accumulation period of an annuity? Answer: It would not occur in a deferred annuity. ◉ What is the purpose of a conditional receipt?
◉ Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? Answer: Payor Benefit ◉ A paid-up nonforfeiture benefit will become effective as specified in the policy unless the person entitled elects another available option within how many days after the due date of the premium in default? Answer: 60 ◉ All group life insurance policies must be incontestable after how many years? Answer: 2 ◉ Who assumes control over an insurance company's funds and management if it becomes insolvent? Answer: The Guaranty Association ◉ In which of the following situations is it legal to limit coverage based on marital status? Answer: It is never legal to limit coverage based on marital status.
◉ Each viatical settlement contract entered into in this State must provide the viator with an unconditional right to rescind the contract for at least how many days? Answer: 15 ◉ If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered Answer: An unfair trade practice. ◉ Each policy must contain a table showing the loan value in figures, as well as any options available if a default occurs in the payment of premiums, either during the term of the policy or during the first Answer: 20 years ◉ When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered Answer: Discrimination ◉ In order to get a nonresident license in this state, a producer must Answer: Apply and pay a fee to a nonresident state that reciprocates.
◉ Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? Answer: Payor Benefit ◉ A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the Answer: Revocable beneficiary. ◉ During replacement of life insurance, a replacing insurer must do which of the following? Answer: Obtain a list of all life insurance policies that will be replaced ◉ Variable Whole Life insurance is based on what type of premium? Answer: Level fixed ◉ Under an extended term nonforfeiture option, the policy cash value is converted to Answer: The same face amount as in the whole life policy.
◉ Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? Answer: 3 days ◉ The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called Answer: Waiver of premium. ◉ If a settlement option is not chosen by the policyowner or the beneficiary, which option will be used? Answer: Lump sum ◉ An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it? Answer: Limited-pay Life ◉ Which of the following statements about a suicide clause in a life insurance policy is true? Answer: Suicide is excluded for a specific period of years and covered thereafter.
◉ In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? Answer: The customer's associates, friends, and neighbors provide the report's data. ◉ When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit? Answer: The insured's contingent beneficiary ◉ Which of the following is NOT true regarding the annuitant? Answer: The annuitant cannot be the same person as the annuity owner. ◉ What is the waiting period on a Waiver of Premium rider in life insurance policies? Answer: 6 months ◉ All of the following are general requirements of a qualified plan EXCEPT Answer: The plan must provide an offset for social security benefits.
◉ Which of the following best describes what the annuity period is? Answer: The period of time during which accumulated money is converted into income payments ◉ Concerning insurance, the definition of a fiduciary responsibility is Answer: Handling insurer funds in a trust capacity. ◉ If the provider of a viatical settlement transfers ownership or changes the beneficiary of the insurance policy, the provider must communicate the change in ownership or beneficiary to the insured within how many days after the change? Answer: 20 ◉ Which term describes an individual who is domiciled and licensed as a resident producer in a state other than Alaska? Answer: Nonresident producer ◉ An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n) Answer: 403(b) Plan (TSA).
◉ Which of the following is NOT a type of whole life insurance? Answer: Level term ◉ What is the purpose of a conditional receipt? Answer: It is intended to provide coverage on a date prior to the policy issue. ◉ Which of the following documents must be provided to the policyowner or applicant during policy replacement? Answer: Notice Regarding Replacement ◉ The premium of a survivorship life policy compared with that of a joint life policy would be Answer: Lower. ◉ Which of the following is NOT one of the three types of term coverage based on what happens to the face amount during the policy term? Answer: Renewable ◉ Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? Answer: Warranty
◉ Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members? Answer: Term rider ◉ What is the advantage of reinstating a policy instead of applying for a new one? Answer: The original age is used for premium determination. ◉ All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT Answer: Upon conversion, the death benefit of the permanent policy will be reduced by 50%. ◉ Upon policy delivery, the producer may be required to obtain any of the following EXCEPT Answer: Signed waiver of premium. ◉ What is the waiting period on a Waiver of Premium rider in life insurance policies? Answer: 6 months
Answer: The period of time during which accumulated money is converted into income payments ◉ The Ownership provision entitles the policyowner to do all of the following EXCEPT Answer: Set premium rates. ◉ An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy? Answer: $100, ◉ 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 Answer: HR-10 (Keogh Plan). ◉ In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? Answer: Unilateral
◉ All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT Answer: The policy is owned by the company. ◉ The annuitant dies while the annuity is still in the accumulation stage. Which of the following is TRUE? Answer: The beneficiary will receive the greater of the money paid into the annuity or the cash value. ◉ What percentage of a company's employees must take part in a noncontributory group life plan? Answer: 100% ◉ How long must a standard insurance transaction remain on file? Answer: 5 years ◉ What is the major difference between a stock company and a mutual company? Answer: Ownership ◉ Which of the following may NOT be included in an insurance company's advertisement? Answer: That its policies are covered by a state Guaranty Association
