All right welcome back everybody my name is josh here from ybla your best life academy and today we're doing another simulator exam now now i want to thank everyone of you that has subscribed that has followed us on our platforms maybe some of you have already licensed but you've remained subscribed and we appreciate that folks you know our.
Mission here is to definitely be able to keep things easy and simple for those of you that are taking your state exam now if you're not subscribed yet uh please consider subscribing folks the reason that we asked that is because if you found this video helpful maybe somebody else will as well okay and because of that we'd like to have.
We'd like to make it a little bit easier for people to find this video so please consider subscribing following us on our social media platforms the link is down below we're going to make sure that this is going to be a more of a consistent thing where you guys don't have to wait a year to get another video so there's definitely going to be videos coming up.
On a very consistent basis folks and we're in the works of even having a video library where you're able to look up any chapter make things a lot easier so be on the lookout for that subscribe follow the social media platforms for you to be the first one to find out when we're gonna launch that video library folks but let's jump into.
It today okay now this simulator is based on the state of california exam the life only license in the state of california now what i've gotten to notice over this past year since we first recorded our since we recorded our first video i've had the pleasure of working with so many different states now okay and i've come.
To realize that a lot of the material from california actually translates to almost every single state the only thing that changes from california to other states is slightly the fines the penalties the amount of years or the amount of days for certain benefits or provisions so be sure folks that if you.
Are not based out of california that you look up and double check cross-reference the dates and the times and the fines that i'm talking about folks because things do change vary from state to state but for the most part because i've had the pleasure of working with so many different states as i mentioned earlier we know for sure that this video.
Is still going to help you out it's going to be a live recorded session just like we did in our first video so what does that mean the questions that are gonna pop up right here on the screen those are the questions that as you're watching the video i say a question mark i say i'm not sure or i.
Kind of guess okay these are all the questions that i'm not sure on as we're going through the video they're right here but guess well folks out of all these questions that you see here these are the only ones that we got wrong okay these are the only ones that we got we got seven questions wrong throughout the simulator exam.
I'm gonna go more into detail please folks like i mentioned the the audio will get cut off the audio is cut off there's not gonna be an explanation on the questions that i got wrong so if i explain myself and i say i'm not too sure or check to the end it's not gonna be at the end folks okay because i ended up getting the right.
Answer i'm only gonna put at the end of the video the questions that i got wrong which was those seven that you saw uh here on the screen okay folks now lastly before we get started with this video for those of you guys that actually watched the intro i have a special surprise or present for i guess whatever you like to call it okay so during my.
Video there's an interruption that happens there's a whole little commotion in the background and it all occurs over something okay i'm gonna make sure in the video there's gonna appear the word of why the whole are you why the whole the disruption occurred okay so for the first three people that comment the reason why there was noise in the.
Background in my video you're going to be earning a special reward uh send us a message either put it in the comments or send us a direct message on any one of our social media platforms that are right there in the description whether it's facebook or or instagram and we're gonna make sure we reach out to you and let you guys know what the prize is okay.
Folks so let's get started with the simulator starting on question number one okay so let's start off with this first question so the first question is an agent wishes to sell variable life policies what license must the agent obtain so in this case.
Uh the key word that stands out to me is the word variable so any type of variable product whether it's life insurance or annuities it's going to require you to have an additional license that being the investment license so if you notice that's not an option here so in this exam instead of saying the investment.
License they use the word securities so a securities license is the same thing as saying an investment license so sometimes you may not see the word investment they'll just use the word security so i'm going to go with a next one which of the following about class designation is true about class.
Designation which of the following is true about class designation so when i see class designation it makes me think of beneficiaries okay when you're selecting somebody to be your beneficiary and you don't necessarily put them by name you just put them like to my children equally to my spouse to this.
Organization so let's look at these options beneficiaries are not identified by name sounds about right but even when you think it's right make sure you read the rest of the options beneficiaries must be part of the insurance immediate family that's not true.
It is not allowed of course it's allowed it determines the succession of beneficiaries no that's primary contingent now that's other stuff so i'm gonna go with option number one or letter a beneficiaries are not identified running in an executive bonus plan who is the owner of the policy.
And who pays the premiums so in an executive bonus plan this is a life insurance offered to the company so it's not like group insurance maybe some of you that are watching this have life insurance through your work that's group insurance an executive bonus is when the company is offering you the the benefit of having life insurance.
They're going to pay for it but they're gonna give you the money so let's say your life insurance premium is a hundred dollars so instead of them paying a hundred dollars themselves the company they're just gonna add an extra hundred dollars to your check and that extra dollars that bonus that they've given you is for you to pay.
For your life insurance so who pays the premium you do so let's look at these options company is the owner uh not true it's your own policies your benefit executive is the owner that's true and the executive pays a premium i believe it's that one let's read the rest company's the owner not wrong board of directors okay perfect so the correct.
Answer that i'm going to be selecting is b to which of the following products does the replacement regulation apply so when you're replacing a policy there's certain rules that you have to follow when you're replacing an existing plan or product so to which of these does the replacement rule apply to that's going.
To be whole life insurance so whole life insurance is actually the first life insurance that was ever invented fun fact don't worry about it it's not going to be on your test but the first type of life insurance that was ever invented so they were they're the ogs they're the originals so because of that that's why they have more rules in place.
When if you want to switch over to a different type of planner product so i'm going to go with the letter c which of the following is true about credit life insurance so credit life insurance is when you have a creditor and you have a debt okay so a creditor is somebody that gives you credit let's just use a.
Bank as an example and a debtor is a person that gets in debt so kind of like us as humans or as people we all get in debt in some way shape or form right so you have the creditor the the bank and you are the debtor the one receiving the money so which of these is true about that situation.
In these plans it's allowed let's use the bank remember the bank is a creditor the creditor is allowed to buy a life insurance policy on the debtor just to make sure that if the debtor doesn't pay back the what they owe them they're still going to get their money even if you pass away so let's see debtor is the policy beneficiary no the.
Creditor wants their money so it's going to be them creditor is a policy owner ah sounds about right let's read the rest debtor is the annuitant a new attempt has to do with life insurance nothing i'm sorry has to do with annuities now with life insurance we're talking about life insurance right now.
Creditor is the insurer no creditors the bank bank's not a person they're not going to die so i would have to go with option b number two when an agent does not hold any active appointments with the insurers what happens to the agent's license so.
Let's take a pause real quick an appointment does not mean like an actual appointment like a doctor's appointment or you sitting down with the client that's not what they're referring to okay appointment is referring to you being able to represent a company so when you get appointed or you have an appointment that means you have been.
Accepted or you are able to represent a company let's say you have uh jake from state farm okay can jake from state farm sell you allstate plans or um farmer no they can't right because they are jake from state farm they can offer you stay for their appointment is with.
State fund okay shout out to all those other companies endorsed i'm just kidding listen uh sorry i'm already sidetracked already we're gonna we're gonna stay focused on this but the reality is folks insurance is not the most fun topic okay it's it's a little a lot of new stuff for a lot of us folks.
So hopefully this video uh we're keeping it simple for those guys are actually watching every minute right so let's jump into six okay when an agent does not hold any active appointments with an insurer with insurers which means companies what happens to the agent's license.
Then they're not it doesn't expire let's see so it must be renewed with a new appointment it expires it becomes inactive it must be returned to farm insurance it becomes inactive if you're not using your if you have a license but you're not using it you're not working with any company it goes into an inactive.
Status how do you activate it again you just go to the company and say hey i would like to work with you i'd like to represent you guys as long as they accept you you go back into the active status so i'm going to go with c which of the following types uh which of all types of insurance policies.
Is most commonly used in credit life insurance didn't we just get a question about this a few questions ago absolutely folks so keep in mind in this exam as you're taking it there's going to be a lot of questions or a lot of themes that are going to be carried over from question to question so i mentioned that because a lot of people make the.
Mistake of thinking oh i have to pick a different answer it's a different type of plan but a lot of this exam it carries over into other questions so back to the question hands which policy or which insurance is most used that's going to be decreasing term b so think about when you get remember we use the bank example right so let's say.
You got a loan from the bank to buy a house your mortgage right so what happens to the balance of your mortgage of your home as the years go by what happens to that debt that you owe the bank well it goes down.
Every year it's going to keep going down down to eventually it reaches zero so which type of plan best fits that that the balance of your home or what you owe a creditor is going down that's going to be a decreasing term an insurance policy that goes down as the years go by to match the debt that you currently have.
Number eight when an individual purchases insurance what risk management technique is he or she practicing so that we have something called the methods of handling risk how to protect yourself from it so when you buy insurance who pays for an accident you or the insurance company.
With the insurance company that's why you bought an insurance policy right so you are transferring so i'm gonna go with c you are transferring the risk to the insurance company number nine a corporation is the owner and beneficiary of a key person life policy.
If the corporation collects the policy benefits then what needs to happen so here's we're focusing on a key person or a key employee life insurance when somebody is so important to the company that they are actually allowed to have something called insurable interest.
Where they can buy a life insurance policy on that said employee let's say you're a heart surgeon and you're the best one in the world so if you were a heart surgeon then the hospital if you're the best in the world they would consider you a key person because people come to that hospital to meet with you they have.
Heart conditions right so if something were to happen to you it's gonna affect them so in that instance or that example they are allowed to buy life insurance on you so let's see the irs is no jurisdiction the benefit is received as taxable income the benefit is free tax free the benefit is subject to an exclusionary rule they're going to be.
I'm going to choose c because that's how life insurance works life insurance works on the way that what you receive is going to be tax free the caveat or the the condition that's going to be set is that money that they receive because it's tax free they can only use it to hire or train a replacement.
Because if not these companies or these organizations will buy a 20 30 million policy on somebody they die they use a million to replace that person or train somebody else now they got an extra 29 10 million they don't want that so because of that that's why they put that rule yes it's going to be tax free but the rule is you can only use that.
Money to hire trainer replacement or pay for overhead expenses like rent light employees wages things like that you want to number 10. all of the following are true regarding the guaranteed insurability writer except time now let's take a second here folks you are constantly.
Constantly gonna get questions with the word except so it's important now this is a technique that i've always used and i encourage you guys to use if you don't already use it when you see a question especially when it has accept i recommend for you to take a pause.
If you're like me take a deep breath you know okay i gotta focus you gotta pay attention to this question because anytime you see the word accept it means the opposite so you're looking for the opposite of what the question is saying so it's here the question is asking about all the following are true.
So the word accept makes it the opposite so all which of these is the lie that's basically what you're looking for you're looking for the lie on the benefit on the writer called guaranteed insurability so let's look at these options the insurer may purchase additional coverage at the obtained age.
That's true the insurer may purchase additional insurance up to the amount specified in the base policy absolutely it is allowed it allows the insurer to purchase additional amounts of insurance without proving insurability only as specified true this rider is available to all insurers.
With no additional premium that is not true so one of the things with writers is that they're called add-on provisions they're add-on benefits you have to pay to get that benefit that's the whole point of a rider it's like when you buy a car.
Does every single car you buy have a gps system no can it have a gps system yes you can but does it cost more yes it does that's what riders are the things that you can add on to your policy your existing plan or the plan that you're about to buy to have these extra.
Benefits just like in a car you're adding these extra features on so i'm gonna go with number four because they because yeah there's no way that it's going to be free with noah disprove that's a lie and remember because of that word except we're looking for the lie number 11 for how long is an insurance.
Company allowed to defer policy loan requests so when you need to borrow money from your cash value from your savings right how long are they allowed to defer it now this is a question it varies it varies from company to company in the real world so in the test world i'm not 100 sure so make sure you watch.
To the end of the video make sure you watch the end of the video to find out the correct answer for this moment folks i'm gonna select see okay for this moment six months let's move on what happens when a policy is surrendered for its cash value.
So remember the cash value is the savings that we just talked about that savings you have in your life insurance and the word surrender basically means to cancel you give up right surrender so you're basically canceling your plan and you're liquidating everything you're taking out all the money so what happens.
When this so what happens when the policies surrender for its cash value let's see the policy can be converted policy coverage ends with the policy cannot be restated coverage ends but the policy can be received any time by the way put down in the chat like if i'm going to be making more of these.
Videos would you rather me just be quiet and not read out the options because i know some of you guys are probably listening in right now while you're doing something else on the way to work or something like that so you're probably just listening and let me know if that's distracting to you guys so that i make sure for the next.
Videos coming up i do not read out the options i just give you guys the answers up front so i'm going to go with number two okay so when you're surrendering you're canceling the policy of course the coverage ends you don't have insurance you just canceled it you surrendered it and you cannot reinstate.
It you can't get it back once you cancel something you can't get it back at the same rate you you voluntarily cancel that's what surrender means you chose to do it so if you go you know why i changed my mind i want the policy back no you're going to have to get a new one now because you voluntarily canceled you surrendered the.
Plan so i'm going to go with number two an insurance agent who commits a repeated violation of the insurance code with respect to the insurance replacement will be liable for what so important to note that it's repeated okay that's gonna change the answer.
There's a there's a fee when it's your first time and if they continually do it specifically towards the replacement then that fee's gonna go up so here pay attention to this as well who's the one committing the violation here it's saying the insurance agent in.
Your exam they can say the insurer which is the company see when a person or an agent by the commits that violation there's a certain fee right when an insurance company does it there's a different fee okay so you got there's a lot of little moving parts in this one question alone okay so we're.
Focusing on the person and agents they're repeating it they're doing it over again so they've already been worn once so it's going to be a different penalty now and it's for the replacement so what's what's the fee for the replacement i'm going to have to go with c the administrative penalty uh of no less.
Than five thousand dollars is gonna be a minimum of five thousand and no more than fifty fifty thousand per violation every time they continue to do that okay when it's your first time it's a thousand you know if you're a person if it's a company it's more but when you continually do it i'm gonna have to go with see.
Number fourteen an internal revenue code provision that specifically provides for an individual retirement plan for public school teachers is known as a what so normally a lot of us here have heard of a 401k which is some sort of savings plan that companies.
Offer nowadays not anymore as much as they used to but they offer that type of retirement plan so when you work for a public school you know so it's gonna be different they don't call it a 401k they call it a 403b maybe some of you have that type of plan so when you work for a non-profit.
Organization like the school district like a hospital like there's different types of numbers right so they have a bunch of different names but the most popular one when it comes to the school district is the 403 b or a tsa a tax sheltered annuity so i'm going.
To go with d or four talking a lot here thanks for hanging in there guys which of the following is not a goal of risk retention so this is piggybacking on the methods of handling wrist that we spoke about earlier the methods of handling risk so.
Not a goal of risk retention retention comes from the word to retain or to hold on to okay so which so basically you're being responsible i don't know if if that's ever happened or maybe you get in a small little fender bender a little bit of an accident and then you go you know let's not involve insurances i'll pay for it that's risk.
Retention you're holding on to the response you're retaining it you're like i'm gonna take care of it okay so which of these is not a goal of that of you taking responsibility for an accident so uh to increase control claim reserve you know that's true you do want to the whole point of you being responsible is.
You want to be prepared so that's true to fund losses cannot be insured well yeah of course that's good to minimize and ensures a little bit that's going to be the answer see the whole point of this is because you're taking full responsibility so when it says you're going to minimize your liability that's not true you're.
Taking the full liability you're retaining the full risk so i'm going to go with see according to the california insurance code which of the following can be classified as an insurable event so as an instrument so in order for an event to be insurable uh.
When you learn this in chapter one or in the beginning whatever state you're in that's the great thing about it it doesn't really matter they always talk about in chapter one it has to be something called a pure risk okay so it's going to be option b so only pure risks are insurable.
Why would you ensure something that you're not too sure of like a speculative or unpredicted or an extreme level loss why would a company take that type of risk pure risk is a situation that represents loss only a guaranteed loss so those are the only types of risks that are insurable so that's why the answer is.
Going to be which of the following does not need to be identified in an insurance policy not listen folks i know like i mentioned earlier going through this exam you're you're worried about maybe a.
Timer you're trying to go get things quickly don't make the little mistakes make sure you pause there's a reason they put the words accept not they put them in all capital letters to try to help you guys out don't make these little mistakes because you're like oh it has to be which one.
Does not what does not have to be an insurance policy and the answer is going to be c okay they do not need your financial rating okay if a company is an a can they tell you they're an a yeah and most likely they will okay but it's not required by law for them to tell you that so that's why the answer is going to be same.
An annuity owner dies during the accumulation period without naming a beneficiary annuities cash value exceeds the premiums paid which of the following is true okay so during the accumulation period while you're saving up money in your.
Annuity everybody's allowed to have a beneficiary but this person unfortunately didn't list somebody okay and the amount of money in the account is higher than what they've paid is doing his job because that's the whole point of it the whole point of you investing money is to earn more than what you put in because it's earning.
Interest right so what's going to happen here so let's look at these options the cash value will be paid to the state government the cash flow will pay to the annuitants estate the premium value will be paid to the newer 10 states all benefits will be forfeited make sure you watch to the end.
On this one this one's a question mark so what's making sense for me at this moment there's a benefit called the common disaster provision so for the most part in the test folks remember test world is different from the real world i would have to say two it would go to the estate.
Uh in the real world it would go into probate but for this exam i would have to go with number two let's see at the end if i was right when a life insurance policy stipulates that the beneficiary will receive payments in specified installments for a.
Specified number of years what provision prevents the beneficiary from changing or borrowing from the planned installments wow that's a mouthful so basically this question is saying your beneficiary you're giving them a certain amount of money for a certain.
Amount of time okay that person cannot change it what prevents them from changing or partnering i need more money or i want so-and-so to get the money now that would be the spencer's probation it says it in the name spencer provision offers two separate benefits okay i.
Don't know what the heck happened there that's how you know it's real it's a lie right sorry guys thanks for putting up with me the spencer provision offers two separate benefits okay the first one it says it in the name spend you get to limit who and how much.
They're able to spend the thrift portion protects you from creditors so creditors don't have to come over to come up after you for the money so i'm gonna go with the first option hey an insured has the right to return the new insurance policy for a full refund during the.
Free look period that's why they call it the freelancer you know because you get a look at it for free so because you get a look at it for free you change your mind you're gonna get a full refund remember the dates change.
Based on how old you are okay so be sure to read your state's material to find that out a deceptive act or practice committed by a person with the intent to secure an unfair advantage or an unlawful gain is known as what that would be.
Fraud question mark on this question i'm i'm torn between two options fraud and misrepresentation so i would have to go with fraud just because you're trying to gain in you're trying to commit fraud like trying to cheat somebody okay so i would have to go with a watch to the end folks or fast forward.
To the end to find out if i was right number 22 which of the following statements is true about a policy assignment okay so remember capital letters they're important take a second read them okay true we're looking for the truth about assignment what's assignment assignment is a provision it's a benefit that.
Allows you to transfer ownership that's the whole point of this benefit it transfers rights of ownership from an owner to another person sounds about right always read the rest it is the same has been his name as beneficiary designation it's not the same it permits the beneficiary from designating a person to receive the.
Benefits it authorization it's going to be a okay the whole point of assignment is you can assign somebody else to be the owner of the policy now that can be for a short amount of time temporary or it can be forever permanent okay the title page of the policy provides a summary of the benefits and the coverages provided by.
The policy all of the following information is included in the title page except why do i do i don't know i don't know why maybe because i saw kung fu panda i don't know but i love taking a deep breath with these questions personally because it.
Allows me to reset and to refocus except we're looking for the opposite so what does not have to be included on the title page okay the premium amount to the model model the effective date determination of the.
Policy the insurance beneficiaries the type of policy my coverage it's going to be option c your beneficiaries are in your policy but they're not on the first page they're not on the title page the title page is for the most important things which are the options one two and four those are the most important things of.
Course they're going to be included on the first page but your beneficiaries is going to be included later on in a different page not the title page so it's going to be see number 24 all of the following are requirements of eligibility for social security.
Disability income benefits accept number 25 the protection of the insurer from adverse selection is provided in part by so adverse selection is what allows people that maybe have an existing medical condition.
Maybe have poor health people that are riskier they have a higher exposure to risk it gives them the opportunity to still be able to buy insurance that's what adverse selection does so the protection from that is provided thanks to a.
A profitable distribution of exposures that's what's going to help them out a profitable distribution because why you have good risk you have preferred risk and then you have the not so good risk which are the adverse selection so that's what protects it so it's going to be optional.
Number 26 which of the following best describes the policy non-renewal number 27 all of the following are dividend options except remember the opposite which of these is not a dividend option so if you remember reading in your in your section of.
Provisions and options we learned that there's a funny little acronym for these dividend options and the acronym is just the word where every letter represents a different word so the acronym here is oh crap so if we remember oh crap which of these is not a dividend option.
Well there's here's the letter f fixed period installments is not part of oh crap we have all the other letters so it's gonna be option number two an insurance an insurer very important insurer which means a company because remember if it's an insured a client they have different responses so an insurer neglects to pay.
A legitimate claim they should have paid but they didn't want it that is covered under the terms of the policy which of the following insurance principles has the insurer violated that's gonna be consideration which.
Sounds a little weird right why would consideration be what it is in chapter of the contracts they talk a little bit more in detail about them okay they talk about consideration is the promise to pay number 29 a young father would like a life.
Insurance policy to provide coverage for all five family members at the lowest cost which type of policy would he most likely buy he would buy a family protection post okay because he's trying to include everybody into it and it's usually is very affordable because.
You're adding your spouse and your children as writers so i'd have to go with option number one a number 30 to sell variable life insurance policies an agent must receive all of the following accept whoa did it wasn't that one of the first.
Questions that we talked about the whole variable and security so we already know that you need a securities license this is why piggybacking on existing questions is going to help you out a life insurance license of course you have to have an insurance license you got to have a securities license okay so now we're left with the registrations.
Sec registration or a finra registration which of these do we not need because of that word except we're looking for the opposite so which one do we not need that's going to be the sec sec is more for companies all these companies these brokers they have to register with the sec the securities exchange commission.
As an agent as a person you don't register with them because you're not a you're not an organization you're not an entity a business you would have to register with finra okay so it's going to be option c 31.
Whose responsibility is it to make certain that an application for insurance is filled out completely and correctly that is the responsibility of the producer the agent the person there with you of course you got to make sure that the company can do it it's not the applicant's job to tell you.
How to do your job you as the agent the producer because you're producing business for the company you're the one that has to make sure everything is filled out completely and correctly number 32 which of the following is a key distinction between variable whole life and variable universal life products.
So they're both variable so the differences we're going to be found between whole life and universal life so we know whole life loves to offer guarantees as far as the premium as far as the face amount and even the cash value there's a fixed interest rate as for universal life it's interest sensitive the amount of.
Interest you can earn can go up or down and there's some differences with the coverages these can fluctuate and change so let's look at these options variable whole life has a guaranteed death benefit that's true that is true let's look at the rest of the options variable universal life is regulated.
Solely through friends that's not true not just through them they're also through the insurance commission as well because it's insurance and an investment product so it's not true number two variable whole life allows policy loans from the cash value well they both do they both offer loans so here we're.
Talking about the distinction the difference variable universal life has a fixed premium that can change actually so it's gonna go i'm gonna have to go with number one okay i have to go with number one as the answer number 33.
Employer contributions made to a qualified plan okay so a qualified plan means it's it qualifies for special tax benefits and it's done by the company so when the company makes these payments to these qualified plans basically what's going to happen so they may discriminate in favor of high.
Higher highly paid employees no that's not true they're not allowed to discriminate they are after tax contributions they are taxed as annual salary they are subject to vesting requirements so in this one i would have to say it's option number four because they are tax they're going to be tax deductible but.
That's later on the vesting requirements means you have to leave the money there for a certain amount of time before you can touch it like a 401k can you take a loan and borrow it yes but the best requirements for you to be able to take it out so i'm going to have to go with option d number 34.
All of the following are requirements for life insurance illustrations except the opposite okay what's not required so we're talking about an illustration so an illustration is a non-guaranteed element something that is not guaranteed okay.
So so sorry folks sorry they must identify non-guaranteed values that is the truth that's the whole point of illustration but again we're looking for the except they must differentiate between guaranteed and projected amounts.
Possibly let's look at the rest they must be part of the contract they may only be used as a proof that is very true last one so uh accept so i would have to say number three they don't have to be part of the contract okay they're saying that that's not true not every company is going to.
Offer illustration they would show you exactly what they offer illustrations is used more for financial products that offer some sort of investment return so i'd have to go with option c number 35 all of the following statements are correct regarding credit life insurance.
Except didn't i tell you folks that they were gonna include these they waited towards the middle of the test too they they they lull you into a false sense of security we're like nah these first questions are simple then towards the middle you're kind of like oh okay they're playing.
Let's play ball right so which of these is a lie which is incorrect because remember accept means the opposite so which is incorrect about specifically credit life insurance uh benefits are paid to the borrower's beneficiary.
Let's look at the rest the amount of the insurance permissible is limited per borrow that is true premiums are usually paid by the borrower benefits are paid to the creditor so if you notice four in one contradict benefits are paid to the creditor.
Benefits are paid to the borrower's beneficiary you see how they're different one of them has to be right and these are opposites so the reality is remember the whole point of credit life insurance is for the creditor to get the money so we're gonna go with one even if you feel you know the answer folks i encourage you guys.
Read the rest of the options okay what type of insurance would be used for a return of premium writer the rop writer i don't know why but rop always goes with increasing term in this exam it's like peanut butter and jelly okay or peanut butter bananas whatever floats your butt right so increasing term and.
Return of premium they're constantly in this exam always mix together doesn't it applies to every state actually that's what i've noticed 37 which of the following documents delivered to the policy owner includes information about premium amounts.
Cash values surrender values and death benefits for specific policy years that would be the policy summary i got stuck with you too so remember the.
The buyer's guide gives you generic information not too much into detail a summary goes really into detail see how it says for specific yeah so i'm going to have to go with c because they're going really into detail a buyer's guide just gives you kind of general information here because.
They're going into amounts cash values surrender value that's specific information i'd have to go with 38 an individual's tendency to be dishonest dishonest would be indicative of a moral hazard so remember moral hazard it means you lie okay it has to do with our morals whatever was.
One of the things that a lot of us learned early on that you shouldn't lie okay so i'd pick numbers number c option three letters the waiver of cost of insurance rider is found in what type of insurance that would be universal life universal life is the only life.
Insurance policy they can offer this specific writer number 40 we're we already have passed the halfway point folks we're almost there an annuitant dies before the effective date of a purchased annuity assuming that the annuitant's wife is the.
Beneficiary what will occur if an applicant for a life insurance policy and a person to be insured by the policy are different people the underwriter would be concerned about what sorry folks i gotta reread that question.
If an applicant for a life insurance policy and a person to be insured by the policy are two different people the underwriter would be concerned about what did they have insurable interest okay there has to be a reason in which you buy life insurance on somebody else and.
That reason is called insurable interest you have to have a valid reason so you can buy insurance on your family uh on yourself your business partner uh a key employee key person uh creditors can buy on debt so that's a lot okay can you just go buy a life insurance policy on your neighbor no that's not allowed you can't do that.
Because you got to have a short bunch because insurance companies because this money is tax free you don't pay any tax on it they don't want people to just make profit off of people passing away at night that's why you got to have a legitimate reason to get the money uh number 42 an insurer received a claim.
On may 1st and on may 31st the claim was approved in its entirety by what day can the claimant expect the payment by when do they have to receive the payment they could expect it by june 30.
So check back on me on this okay not a hundred percent sure on this one folks uh i'm not sure if it's 15 or 30 days i'm gonna say it's 30 days just to be safe number 43 which of the following best describes what the annuity period is.
So there's two phases or periods in an annuity you have the accumulation period and you have the annuity period accumulation is when you're accumulating you're saving money annuity period is when you're liquidating when you're pulling money out from the account so that that being said let's look into.
These options the period of time from the effective date and the contradictions termination could be right let's look at the rest of the options the period of time during which an accumulated money is converted into income payments could be right as well see we're looking.
For the one that best describes us so the period of time from which accumulation period to the annuitization period the annuity period is already the payoff here the period of time during which money is a community that's no so i'm just let's let's re-look into options one and two.
The period time from the effective date of the contract to the date of determination the period time to which accumulated money is converted into income payments we're gonna go with option number two the letter b and i'm fairly confident on this one folks so the whole point of it like i said annuity period zero is the payout period.
In these questions it very rarely happens on your real test but it does happen when you get two options that are they could be right they're fairly similar okay always go for the one that goes more into detail it's like saying you know josh is wearing a shirt.
First off thank goodness i'm on youtube wearing a shirt right thank goodness but if i say josh is wearing a striped shirt they tend to like the one that's more in detail even though they're both right so in this situation i'd have to go with b because a little bit more in detail.
Number 44 which of the following is another term for an authorized insurer so they they're authorized they have authority they've been admitted okay here we're talking about an insurer a company remember folks if this would have been a person it would have been licensed.
Since we're talking about a company they are admitted into a state to do business they're authorized to do business in the state number 45 the insured provides a proof of claim to the insurer to the company moving on to number 46.
Which of the following would not be considered a form of direct response marketing so direct response marketing is advertised really any type of advertisement okay so the reason they call it direct response is because if you want more information or you want that product what do you have to do you have to call it.
You have to respond directly to the ad so if you see a billboard and you want to call that number or go to their website that is direct response you're responding directly okay so uh insurance companies commercial of course i would have to say b let's read the rest though newspaper.
Again add a circular mail to cities right yep because they have to respond if you're in the insurance company's office and you see a sign that's not direct response because you're there already the the other forms ads or mass media advertisement.
Those are going to be direct response because you got to call in to get more information you're already there in the office so i would have to say option number two number 47 in ca in case of a loss the indemnity provision in insurance policies.
So indemnity is a very popular topic here in the california exam folks and it has been mentioned in other states as well so indemnity it means to to make whole again or to restore or reimburse or return something to its.
Original value so it allows you to collect 20 of the actual loss no pays the insured a percentage of the loss above and beyond no uh restores huh they use that word here restores it's gonna be uh option number four okay in the state of california who selects the insurance commissioner and for how.
Long okay so this is a california specific question if you're not in the state of california don't worry so much about this question so i believe if i'm not mistaken check back with me all you california folks i believe it's number one it's through a.
General election and it's kind of like the presidency you can't serve more than two four-year terms number 49 an investor buys a life insurance policy on an elderly person in order to sell it for a life settlement.
This is an example of a what this is going to be an example of number 50 in order to in addition to penalties fines and possible imprisonment for violating the provision related to misrepresentation.
The commissioner may suspend the license of a such a person for a period of up to 51 all the following are the responsibilities of every long-term care insurer in california accept what's.
Opposite what's not a responsibility let's see establish marketing procedures to assure excessive insurance is not sold or issued we'll come back to that submit to the commissioner a list of all agents authorized to solicit individual consumers for the cell launch and care.
Insurance yes that is a requirement provide enough business to solicit uh long-term care insurance establish marketing procedures to assure that any comparison of policies will be fair and accurate very important so.
Uh we would have to i'd have to say number three c they don't have to provide enough business to solicit long-term care that's they don't have to do okay can they do that yes they don't have so i have to go with letter c 52 as part of the continued education.
Requirement what is the minimum number of hours of continuing education specif specific to long-term care insurance to be completed prior to each license renewal i would have to say eight hours that would be the required eight hours 53 an insured has chosen joint and two-thirds survivor as a settlement.
Option what does this mean to the beneficiary so a joint um a joint and survivor refers to two people receiving a payout from their most likely an annuity because they're using a settlement option settlement options tend to do more with annuities.
So you have two people receiving a check from this retirement plan from this annuity right so join in two-thirds because you have two people receiving the money the way that it works is that when one of them passes away the survivor receives two-thirds of what they were originally receiving so let's just say.
For example you're getting hundred dollars a month as a couple two people this is joining survivor so 900 every single month one of them were to pass away the surviving person gets two thirds so now the surviving person would receive six hundred dollars so let's look at these options the best.
Describes that what are the benefits for one third of the other two thirds of the proceeds insurance it's for monthly it's not like a full lump sum so the surviving beneficiary will continue to receive two-thirds of the benefits paid when both were alive there you go that sounds right let's read the rest.
The beneficiary will only receive two-thirds of the lump sum up front not to do with lump sums beneficially received two-thirds of the total benefit but the final no so the correct answer is going to be b 54 if a consumer requests additional information.
Concerning an investigative consumer report how long does the insurer or reporting agency have to comply or they're gonna have to respond like hey so they ran a consumer report they found some certain information how many days did they have to respond question mark on this one we're gonna come back to it.
To the end of the video to look into it for now i would have to say option i have to say five days okay why five days i don't know i would just say five days which of the following is not true not true uh regarding the accumulation period of an annuity okay so which one is the lie.
Remember accumulation period you're accumulating you're you're saving money so which is not true it is also part uh a part of the pay-in period also known as the paying period of course it is it would not occur in a deferred annuity i don't think is that one we'll come back to it uh it is the period during.
Which the annuity payments are in interest absolutely true it is the period over which the owner makes payments into an annuity so i'd have to go with two because it doesn't matter if it's an immediate or a deferred annuity they both have accumulation periods so.
It would have to be two because it says it would not occur right 56. what does liquidity refer to in life insurance liquidity or liquid it means you're able to pull out money so the death benefit replaces the assets that would have accumulated and it's just that not possible the policy owner receives dividends.
Checks uh each year where dividends are not guaranteed so that's not really considered liquid the insurer receives payments each month in retirement well we're talking about life insurance we're not talking about uh retirement life insurance pays out when you die so i'd have to pick number four.
So three is the best answer for liquidity but we're specifically talking about life insurance we're not talking about a retirement plan so i would have to go with four because the cash value that you can pull out money or borrow money from i'd have to say that's the best.
Option number 57 which of the following statements regarding the taxation of a modified endowment contract is false which of these is a lie which is not true.
58 an insurer who engages in an insurable event that's not that's not what it says folks you guys can read i apologize an insurer who engages in the insurance business and violates the code with respect to the insurance replacement shall on the first violation.
Remember we got a question similar to this a few questions ago who are we talking about here we're talking about the insurer now the company and it's their first violation that would be a ten thousand dollars okay so we talked about it being different for an agent.
Versus a company so i would say it would have to be 59 which of the following is true about the 10 day free live period in a life insurance policy so we're looking for the truth that's right to get the letters and the freely period it applies only to term insurance policies.
It is optional on a life insurance policy it begins when the policy is delivered it begins when the application is signed it begins when the policy is delivered how can you look at a policy if you don't have it in your hands if it was never delivered to you right so those 10 days.
Begin when the policy is delivered we got 15 more questions folks so we're doing great on time uh as far as the time you see so which of the following is not fundable by annuities okay 61 what is the term.
For a sales campaign conducted through the mail we just talked about that direct response a lot of people would have picked a direct mail right because they're going through the mail remember it's called direct response because they're sending it to a bunch of people.
And if you want the information what do you got to do you got to call them up so it's going to be option number four 62 what is the purpose of a fixed period settlement option so settlement options do with annuities fixed period when something is fixed it's guaranteed or it's going to stay the same and period we know means time.
So it's locked in for a certain amount of time to provide guaranteed income for life no you pick period so it's for a certain amount of time to provide a guaranteed amount of money each month you know that's fixed amount because it's every month to provide a guaranteed income for a.
Certain amount of time sounds right settle an insurance company's abilities no it would have to be option three where you guarantee income for a certain amount of time fixed period in a survivorship life policy when does the insurer pay the death benefit so we have joined life and.
Survivor life very popular on to be asked about in exams the survivorship life pays out when the second person dies also when it's last to die okay so you have two people with one policy first person dies does not pay out when the second person dies or the last person dies they pay out the full amount of.
Insurance to a third party to somebody else 64. all of the following statements are true of a non-qualified retirement plan except opposite which of these is a lie about the non-qualified retirement plan which is not true.
About a non-qualified retirement plan so increases the funds are not taxed until received so non-qualified there is no yeah they're tax different so so so we're looking for the law contributions grow tax deferred that is true they do not qualify for special checks.
Agreement that's true that's why they're called non-qualified don't qualify for commission tax credit contributions are tax exempt so they're excluded from taxes so it would have to be full so the qualified retirement plans those are tax exempt or a tax deductible for.
You so these accounts since they're not so because they're non-qualified they don't qualify for for special treatment with the irs like you saw in the option above that's why i have to say option number four number 65.
Under a straight life annuity if the annuitant dies before the principal amount is paid out the beneficiary will receive one the answer is nothing the point of a straight life annuity is it guarantees you a check for the rest of your life.
As soon as you die that's it so the the upside is if your money reaches zero there's no more money in the account do you still get a monthly check the answer is yes of course you still get one so it's called straight life annuity or a life annuity option right even though there's still money in the.
Account you don't have to pay for it there's nothing because there's no beneficiary a lot of these situations there's other options but we're not going to talk about that right now let's stay on the task at insured receives an annual life insurance dividend check what term best describes this.
Arrangement that would be a cash option so remember we talked about the oh crap where one of the options is to actually receive a money or a check you know even though it's a check is still considered cash you're cashing out because you can use that money for all the other options that uh apply but the receiving a check is the cash.
67 which of the following would describe a legal document which would dictate who can buy a deceased partner shares of the business and for what amount that would be a buy sell agreement okay they're agreeing how much to buy is right their bio biodeceased partners and.
For what amount for how much to sell it for so that would be a buy sell agreement events in which a person has both the chance of winning or losing is called a speculative risk you're speculating you're not too sure 69 which of the following writers would not cause.
The death benefit to increase so it not that's the word not so it's not going to cause the amount to go up so the cost of living writer does that go up with inflation yes.
Guaranteed insurability rider that could go how's it go pay your death benefit accident death writer it would be number two okay number two has to do with paying for policies for minors for children nothing to do with making your deathbed of increase all the other options it.
Doesn't mean that they will go up but they can cause it to go up it's not something you would like okay so that's that one number 70 home stretch baby what happens if a deferred annuity is surrendered before the annuitization period.
So annuitization is the payout it's another way of saying annuity period this is where it gets sometimes confusing because they got multiple words that mean the same thing so what happens if you pull out your money or you surrender a policy during the accumulation period that's what this.
Question is asking you so the owner will not will only receive a refund of premium let's look at the other options i don't believe it's that one the insurer can only apply the surrender value towards another annuity deferred annuities cannot be surrendered prior to immunization the owner will see.
The surrender value of the annuity and i would have to say full that one makes the most sense so remember during the accumulation period while you're accumulating money there's something called a surrender charge okay so there's gonna be a fee for you counseling ahead of time for not waiting the length of time that you had.
Originally agreed upon with your annuity company so that's and they don't want to say that so they're gonna say is the surrender value so you cancel because this person wants to surrender you get the surrender value not the full amount so that's going to be the best option number four 71.
In terms of parties to a contract which of the following does not describe a competent party competent means you understand okay so which of these is not does not describe a competent party the person must be mentally competent of course they do the person must have at least completed second education not necessarily the person that must be.
Under the influence of drugs the person must not be under the influence that's true person must be a little true it'd have to be option number two there's no requirement as far as education level but you're not allowed to be um mentally uh mentally incompetent you're not allowed to be under the.
Influence of drugs or alcohol and of course you have to be old enough to sign your contract so but that's nothing to do with education so we're going to go into number 72 the price of insurance for each exposure unit is called.
The rate that's what it is so the rate because what you pay at the end is the premium 73 who is a third party owner it means the people that are involved somebody that's not actually in the policy that's a third-party owner so if i were to buy.
Insurance for let's say my grandchildren i would be considered a third-party owner because the policies on my grandchildren's life and i own the policy right that is a third-party owner an insurer who issues a policy for two people now an employee in a group policy no because you have funds for you.
Can you revoke a beneficiary a policy who is not insured yeah we just talked about that's option number four number 74 a risk of loss may be classified as what pure risk and speculative risk so risk is only classified under those.
Two things and it's funny because we've gotten prior questions about this so even if you weren't too sure you could have piggybacked on what we talked about earlier last question folks and then we have the big unveil uh which ones we're going to go over which ones i got wrong so 75 which of the following is true regarding.
Taxation of dividends in participating policies so the answer is dividends are not taxable okay dividends in this exam folks is a return of excess premium it's a return of your overpayments you overpaid.
And they're giving you money back think about when you go to the store and you're grocery shopping let's say you had them cash you know not many people do that nowadays in this technology era but you hand them some cash and they give you change so they gave you money they gave you money right do you got to pay tax on.
That money no it was yours to begin with so a dividend because it's a return of excess premium or a return of overpayments dividends are not taxable so here's the big unveil let's see what we ended up getting thank you madam we ended up getting a 90 congratulations folks uh out there for.
Sticking it out with me here is the breakdown so that just goes to show folks uh that you don't have to be 100 expert on this stuff you know so here's the option so it gives you this breakdown you're able to see which ones we got wrong all right folks so now let's take a deep dive on these seven.
Questions that i did not get correct let's look at the first one okay number 24. all of the following are requirements of eligibility for social security disability income benefits except so the correct answer is going to be the letter c being the age of 65. see.
Remember we talked about throughout this video anytime you see the word accept it means the opposite right so all the following are requirements well which one is not a requirement being the age of 65 is not a requirement maybe some of you uh just like myself maybe you know somebody that is under the age of 65 and receiving disability.
Right well guess what being a specific age is not required you got to make sure you have enough credits you've reached that fully insured status and you've waited the period and everything else right there but you it is not required for you to be a specific age in order for you to access social security income benefits so the correct answer.
For this one is the letter c number 26 which of the following best describes a policy non-renewal the correct answer is number three letter c discontinuance of an insurance policy by the insured on the policies anniversary date uh i'm a little.
Embarrassed that i got this one wrong but yes it says it in the title non-renewal you cannot renew it so when it's time for the anniversary date it's going to stop there the policy is not going to be renewed so disk so c is the correct answer folks number 40.
An annuitant dies before the effective date of the purchase annuity assuming that the annuitant's wife is the beneficiary what will occur so in this case they're not talking about her liquidating the account they're not talking about her pulling.
Money out of the account or anything of that nature so because of that we're gonna have to pick letter b or option number two the interest will continue to accumulate tax deferred so in most cases if a spouse passes away and the surviving person that inherits the money is another spouse they just basically becomes their.
Annuity it becomes their retirement plan so then in this question since they didn't go into detail about her withdrawing money or putting out money or increase none of the other stuff what's going to end up happening is we're just going to have to assume that the account is now hers so the correct answer is the money will.
Continue to accumulate tax deferred meaning you're not paying taxes now you're going to pay taxes later number 49 folks an investor buys a life policy on an elderly person in order to sell it for a life settlement this is an example of what this is an example of letter two first letter two i did it again.
Option two which is a stoli policy so a stolen policy stands for stranger oriented life insurance so these life insurances there's only really two things that you got to remember about them uh number one is that it bends the rules of insurable interest because you're able to buy insurance on a stranger.
And number two the reason that you buy these plans is with the intention to sell it later on because you have no real connection to that person that's why they call it slowly or stranger oriented life insurance so these plans stoles are always going to be sold eventually for a life settlement.
Option so the correct answer is number two number 50 in addition to penalties fines possible imprisonment for violating the provision relating to misrepresentation the commissioner may suspend the license of such a person for a period of up to three years okay.
It's up to three years so i accidentally took the wrong amount of time this is why it's so important folks that you look into these little minor details since i've worked with a few quite a few different other states already at this point now i tend to sometimes even get my own numbers confused but as you saw you don't have to be so much of an.
Expert i mean there were 15 questions that i wasn't too sure about but look at the score we ended up with all right number 57 gosh this one's a bad one i can't believe i got this one yeah so let's first read it which of the.
Following statements regarding the taxation of modified endowment contract is false it's so funny because throughout the video i kept talking about look out for the words with capital letters look at that and then when it came time to pick my answer i know you guys didn't get to hear the explanation because i muted it.
I made the same mistake okay so we're going to clear that up folks so which of these is a lie the answer is number three okay withdrawals are not taxable that is a lie they are taxable okay you do always have to pay taxes on the interest when you withdraw money so the correct answer is number three that is the lie withdrawals are going to be.
Taxable specifically because we are talking about a modified endowment contract we would have been talking about a different contract it would have been a different story but for modified endowment contracts they are taxable and if you look at it what in three contradict remember.
Anytime you have two options that contradict one of them has to be the right answer because it can't be the same thing they contradict each other so they hear the answer is number three number 60 the last one that we got wrong was which of the following is not fundable by annuities so you cannot use.
An annuity to pay for it to fund something okay and the correct answer is death benefits now this was a little tricky just because of the fact that in the real world there are some differences there are some options for you to have a death benefit on your annuity but because this is the test world because remember test world is.
Different from the real world you're going to realize that there it does not fund the death benefits that's gonna wrap it up for today's video folks thank you so much for watching to the end make sure you you go to hit that like button hit the subscribe button so that you're up to date with the newest videos because as i.
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One to see them have a wonderful rest of your day guys best of luck on your exam we really do hope that we will provide some sort of help this day have a great one until next time since congratulations folks you know we want to think.
stupid yes no i don't know so question mark if you're still watching this video you're like man this guy does this a few times