LIFE INSURANCE PRACTICE EXAM
ALREADY PASSED
The reciept given to a life insurance applicant when the application is completed and the initial
premium is received is called a(n) ✔✔Insurable Receipt
Statements in the a
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LIFE INSURANCE PRACTICE EXAM
ALREADY PASSED
The reciept given to a life insurance applicant when the application is completed and the initial
premium is received is called a(n) ✔✔Insurable Receipt
Statements in the application for insurance that are believed to be true to the best of the
applicants knowledge are ✔✔Representations
An annuity is considered fixed when it does all of the following EXCEPT ✔✔Provide the
annuitant with an interest rate that is lesser of the guaranteed or current rate
The most common type of whole life insurance where premiums are payable over the whole life
of the insured to age 100 is called. ✔✔Continuous Premium (straight) life
The policy and a copy of the application, along with any riders and amendments, is called the
✔✔Entire contract
Money borrowed from the policy's cash value is ✔✔Not taxable
Which of the following annuity products requires an agent to hold a securities license? ✔✔All
annuities (Variable, Deferreed & Equity Indexed)
Which type of annuity settlement stops when the annuitant dies? ✔✔Life income annuity
At what age can a participant receive distributions from a qualified plan without incurring a 10%
penalty ✔✔59 1/2
Two business partners own life insurance on each other. If one partner dies, which of the
following contracts will allow the surviving partner to use the death benefit to purchase the
deceased's business interests? ✔✔Buy-Sell Agreement
Which type of policy allows the insured to change the amount of the dwah benefit, the amount of
premium, or the type of coverage S their needs change? ✔✔Adjustable life
If an annuitant dies during the accumulation period, what will the beneficiary receive? ✔✔Either
the cash value or the premiums paid, whichever is greater
Any insurer who is NOT approved to do business in this state is considered ✔✔Nonadmitted
To prevent people from profiting from a loss, insurers is the certain ✔✔Insurable Interest Exists
If a misstatement of age is discovered during the processing of a life insurance claim what will
the insurer do? ✔✔Adjusts the death benefit based on the premiums that were paid
Which of the following allows an insurance company to deny coverage of the insurers eewth
occurs in war? ✔✔Policy Exclusions
Each of the following is a typical characteristic of groups life insurance EXCEPT ✔✔Evidence
of insurability is usually required
A life settlement option that pays out the death benefit is. Incrementally, in a specified amount
until all of the proceeds are exhausted, is called ✔✔Fixed-Period Installments
A life insurance death benefit paid in a lump sum to a beneficiary is ✔✔Not subject to any taxes
Which of the following is NOT a nonforfeiture option in whole life policies? ✔✔Accumulation
at Interest
Which of the following indicates the person upon whose life the annuity income amount is
determined? ✔✔Annuitant
An annuity that is purchased with a lump-sum payment, and that begins income payments within
one year is a ✔✔Single premium immediate annuity
Which statement is INCORRECT concerning policy dividends ✔✔Dividends are NOT taxable
What is the risk classification for those who are insurable, but have a higher than average risk?
✔✔Substandard
At age 25, an individual purchased a decreasing term policy. What happens to the coverage and
the premiums as the insured gets older? ✔✔The coverage decrease but the premiums stay the
samw
An insurance agent represents the ✔✔Insurer
The transfer of a possible financial loss to another party refers to ✔✔Insurance
Determine the company's risk regarding a proposed insured ✔✔Underwriting process
An insurer mails an insurance policy to a new policyowner. When the insurer relinquishes
control of the policy, the policy is considered ✔✔Delivered
This is the prtbirbthenapplication that provides information about an applicants dinadial
condition and character, as well as the purpose of sale and how long the agent has known the
applicant: ✔✔Agents Report
A whole life product that covers 2 lives and provides for payment or the death benefit on the
death of the riser insurer is called ✔✔Joint Life
An agent delivers a policy to an insured, and 9 days later the insured returns the policy and wants
a complete refund. What provision covers this circumstance? ✔✔Free look
The "pay in" phase of the annuity is known as what period? ✔✔Accumulation period
For an insurance contract, the principle of utmost good faith means ✔✔Each party relies upon
the truthfulness of the other
Which of the following retirement plans is a special tax favored plan for NONPROFIT,
charitable, educational or religious groups? ✔✔403(b) Tax-Sheltered Annuity (TSAs)
Which of the following types of annuities would be best suited for a retired couple who are
seeking income for as long as either lives? ✔✔Joint and Survivor
London Mutual Life is an insurer incorporated in England, and is transacting business in this
state. London Muthal would be considered what type of insurer? ✔✔Alien Insurer
The MIB is a nonprofit trade association that maintains ✔✔Medical Information on applicants
for life and health insurance
It's purpose in life insurance policies is to protect the policy owner against an inintentional lapse
of the policy. ✔✔Grace Period
What type of permanent insurance allows the policy owner to pay for a policy in a specified
period of time, and the policy owner does not have to make any more premium payments for the
life of the policy? ✔✔Limited Payment
What does the payor benefit rider protect? ✔✔Contestability
How long does an employee have to convert group policy coverage to an individual policy
without evidence of insurability? ✔✔31 days
If the cash value exceeds the premiums paid in a whole life policy, what are the tax
consequences if the policy is surrendered? ✔✔The portion that exceeds the premiums paid IS
taxable
Betty is the only beneficiary named on her husband Bob's policy which has a Common Disaster
provision (within 90 days death benefit will go to primary estate) They are in a car wreck, and
Bob dies instantly. Betty lives for 29 days. Who will receive the death benefit? ✔✔Bobs estate
The legal transfer of all or part of a policyowners rights, title or interest is called an (a)
✔✔Assignment
What do employees covered under a group contract receive? ✔✔Certificate of Insurance
An annuity in which investment growth is dependent on the performance of an index such as the
Standard and Poor's 500 is called a(n) ✔✔Equity Indexed Annuity
The premium payment mode can be best described as the ✔✔Payment method of the policy
premium
All other factors being equal, which of the following types of policies will accumulate cash value
at the fastest rate. ✔✔20-pay life
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