Life insurance

A producer is helping a married couple determine the financial needs of their children and then event that one or both of them should I permanently. This is a personal use of life insurance known as a. Juvenile protection provision b. Survivor protection c. Life planning d. Survivorship insurance

B. Survivor protection

A lucky individual won the state lottery, so the state will be sending them a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits? A. Flexible payment annuity B. Deferred interest annuity C. Immediate annuity D. Variable annuity

C. Immediate annuity

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? a. $100,000 b. $50,000 c. Refund of premiums paid plus interest d. No claims will be paid because cause of death was from natural causes

b. $50,000

Which of the following types of policies pays a benefit if the insured goes blind? a. Universal life b. AD&D c. Endowment d. Adjustable life

b. AD&D (Accidental Death & Dismemberment)

How long does the coverage normally remain on a limited pay life policy? a. Age of 65 b. Age 100 c. When premium payment stop d. At the discretion of the insurer

b. Age 100

What action will an insurer take if an interest payment on a policy loan is not made on time? a. Cancel the policy if not paid within the grace period b. Automatically add the amount of interest due to the loan balance c. Subtract from any dividends owed d. Disallow any further loans

b. Automatically add the amount of interest due to the loan balance

Which of these would be considered a Limited-pay life policy? a. 10-year Renewable and Convertible term b. Life Paid-up at age 70 c. Straight whole life d. Renewable term at age 100

b. Life Paid-up at age 70

Which of these would be considered a Limited-Pay Life policy? a. 10-year renewable and convertible term b. Life paid-up at age 70 c. Straight whole life d. Renewable term at age 100

b. Life paid-up at age 70

Participating insurance policy may do which of the following? a. Require 80% participation B. Pay dividends to the policy owner C. Provide group coverage d. pay dividends to the stockholder

b. Pay dividends to the policy owner

What kind of life insurance start out as a temporary coverage but can later be modified to permanent coverage without evidence of insurability? a. endowment policy b. Limited pay whole life c. Convertible term d. Decreasing term

c. Convertible term

What kind of premium does a Whole Life policy have? a. Decreasing b. Adjustable c. Level d. Deferred

c. Level

An insured receives an annual life insurance dividend check. What term best describes this arrangement? a. Cash option B. Reduction of premium seat c. Annual dividend provision D. Accumulation at interest

A. Cash option

An agent completed a CE course in 2022. Until what year must the agent keep the record of completion? A. 2023 B. 2026 C. 2027 D. 2032

B. 2026

The consideration clause in a life insurance poplicy indicates that a policyowner's consideration consists of a completed application and a. The initial premium b. Agreeing to. Physical examination c. Delivery of policy d. Disclosure of any medical conditions.

A. The initial premium

Which of the following is INCORRECT concerning in non-contributory group plan? E. The employer pays 100% of the premiums B. The employee receives individual policies C. They help reduce the adverse selection against the insurer D. They require 100% employee participation

B. The employee receives individual policies

Which of these statements about a guaranteed insurability option writer is NOT TRUE? A. coverage can be added at specific events such as marriage or having a child B. Evidence of insurability is not required when the option is exercised C. Evidence of insurability is required when the option is exercised D. coverage can be added at specific ages

C. Evidence of insurability is required when the option is exercised

The insurance commissioner may examine the affairs of an insurer as often as necessary, but not less frequently than once every A. Year B. 2 years C. 3 years D. 5 years

D. 5 years

In a life settlement contract whom does the life settlement broker represent? A. the insurer B. the beneficiary C. the life settlement intermediary D. the owner

D. the owner

Which of these Nonforfeiture Options continue a build-up of cash value? a. Waiver of premium b. Extended term c. Reduced paid-up d. Cash surrender

c. Reduced paid-up

What type of life insurance incorporates flexible premiums and an adjustable death benefit? a. Endowment policy b. Modified whole life c. Decreasing term d. Universal life

d. Universal life

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where they parent is a policy owner? a. Thirt party ownership b. An irrevocable beneficiary d. A buy-sell agreement d. Family term rider

A. Third party ownership

What type of policy would offer a 40 year old the quickest accumulation of cash value? A. Paid up at 65 B. 20-pay life C. 30-pay life D. Straight whole life

B. 20-pay life

An insured's ability to perform two or more activities of daily living my trigger what type of policy rider? a. Waiver of premium b. Long term care c. Accelerated death benefit d. Accidental

B. Long term care

Which of these types of life insurance allows the policy owner to have level premiums and to also choose from a selection of investment options? a. Modified whole life d. Variable life c. Universal life d. Adjustable life

B. Variable life

Insurance policies are not drawn up through negotiations, and an insurance has little to say about the provisions. What contract characteristics does this describe? A. Conditional B. Personal C. Adhesion D. Unilateral

C. Adhesion

Which of the following is true regarding the insurance amount in a credit life policy? A. Allowable amount of coverage is determined by the state insurance commissioner B. The amount of coverage can be greater than the amount owed C. The creditor can only insure the debtor for the amount owed D. the creditor may insured debtor for an unlimited amount of coverage

C. The creditor can only ensure the debtor for the amount owed

Stranger-Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a(n): a. Underwriter b. Sole proprietor with insurable interest C. Third-party with no insurable interest D. Relative with insurable interest

C. Third-party with no insurable interest

An agents license will terminate within how many days from the date of the obligatory fees and continuing education requirement? A. 60 B. 30 C. 180 D. 90

D. 90

Which of the following may be included on an insurance advertisement? A. Trade names in a place of the insurer's name B. Claim statement illustration which implies special treatment C. Words and symbols similar to those of government agencies D. Testimonials from compensated individuals

D. Testimonials from compensated individuals

D is a policyowner's and Insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D re-marries, Transferring ownership of his policy to his new wife. If D dies without making any further changes, to hear about the policy proceeds to be paid to? a. Ex-wife b. Current wife c. Estate d. Split equally between the ex-wife and the current wife

a. Ex-wife

In a Life instance contract, And insurance companies promise to pay stated benefits is called the: a. Insuring clause b. Consideration clause c. Entire contract d. Owner's rights

a. Insuring clause

How are policy owner dividends treated in regards to income tax? a. Dividends are not taxable b. Interest on accumulation is taxed c. Taxed as ordinary income d. Text as capital gains

b. Interest on accumulation is taxed

B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of a. Additional term life's coverage at any time b. Additional term life coverage at specific intervals c. Addtional whole life coverage at any time d. Additional whole life coverage at specified times

d. Additional whole life coverage at specified times

The considerations clause in a life instance contract contains what pertinent information? a. Summary of benefits b. Offer and acceptance c. Entire contract d. Amount of premium payments and when they are due

d. Amount of premium payments and when they are due

Which of these types of policies many NOT have the Automatic Loan Provision attached to it? a. Modified whole life b. 20-pay life c. Decreasing term d. Endowment

c. Decreasing term

Which rider provides coverage for a child under a parent's life insurance policy? a. Spouse term rider b. Base insured rider c. Payor benefit rider d. Child term rider

d. Child term rider

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? a. Level term policy b. Whole life policy c. Limited pay policy d. Decreasing term policy

d. Decreasing term policy

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all while the death benefit remain the same. What kind of policy is this? a. Variable life b. Adjustable life c. Graded premium whole life d. Modified whole life

d. Modified whole life

The automatic premium loan provision is designed to: a. Provide a source of revenue to the insurance company b. Avoid a policy lapse c. Allow a policy owner to request a policy loan d. Allow a policy owner to take out additional coverage without evidence of insurability

B. Avoid a policy lapse

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? a. 30 pay life b. Term for age 70 c. Universal life d. Adjustable life

a. 30 pay life

The Renewable term policy is Renewable at the option of the: a. Owner b. Company c. Insured d. Assignee

c. Insured

K buys the policy where the premiums stays fixed for first 5 years. The premium then increases in year 6 and state level there after, all the while the death benefits remain the same. What kind of policy is this? a. Variable life b. Adjustable life c. Graded premium whole life d. Modified whole life

d. Modified whole life

N is converted by a Term Life policy and does not make the required premium payment high was due August 1 N dies September 15. What actin will the insurer take? a. Claim will be denied b. Claim will be paid in full c. Claim will be partially paid d. Claim will be decided by an arbitrator

a. Claim will be denied

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will: a. Pay the death benefit in full b. Adjust the death benefit to an increased amount c. Adjust the death benefit to a reduced amount d. Dent the claim

c. Adjust the death benefit to a reduced amount

A long-term care rider in a life insurance policy pays a daily benefit in the event of which I'd the following? a. Critical illness b. Terminal illness c. Inability of the insured to perform more than 2 Activities of Daily Living (ADL's) d. Inability of the insured to maintain insurance premiums due to unemployment

c. Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)

A policy owner would like to change the beneficiary on a life insurance policy and make the change permanent. What type of designation would fulfill this need? a. Revocable b. Contingent c. Irrevocable d. Primary

c. Irrevocable

N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? a. Misrepresentation b. Exlusion c. Collateral assignment d. Concealment

B. Exclusion

All of the following would be difference between qualified and nonqualified retirement plans EXCEPT A. IRS approval requirements B. Taxation on accumulation C. Taxation of withdrawals D. Taxation of contribution

B. taxation on accumulation

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? a. Joint life b. Adjustable life c. Variable universal life d. Universal life

c. Variable universal life

How are surrender charges deducted in a life policy with a rear end loader provision? Deducted from the death benefit. B. Deducted when the policy is discontinue c. deductible from policy's cash value. D. Deducted when assigned to another policy owner

B. Deducted when the policy is discontinue

What is the major difference between a stock company and a mutual company? a. Types of policies issued b. Ownership c. Amount of benefits d. period number of producers

b. ownership

What kind of life insurance product covers children under their parent's policy? a. Family maintenance rider b. Term rider c. Family income rider d. Payor benefit

b. Term rider

A return of premium life insurance policy is: a. A non forfeiture option b. Whole life and increasing term c. Interest-sensitive d. Variable life

b. Whole life and increasing term

What type of life insurance are credit policies issued as? a. Whole b. Variable c. Term d. Universal

C. Term

If a consumer request additional information concerning an investigative consumer report, how long does the insurer or the reporting agency have to comply? A. 7 days B. 10 days C. 3 days D. 5 days

D. 5 days

What is true about a spouse term rider? a. Coverage is allowed for an unlimited time B. The writer is decreasing term entrance C. Coverage is allowed up to 75 years D. The rider is usually level term insurance

D. The rider is usually level term insurance

How do life insurance companies handle the cases where the insured commits suicide with in the contract stated contestable period? a. Claims are denied under the suicide clause of policy b. Company pays twice the face amount under the double indemnity clause c. Claims are paid in full d. Premiums are returned under the consideration clause

a. Claims are denied under the suicide clause of policy

Family income policy is the combination of Whole life and a. Decreasing term Insurance b. level term insurance c. Deposit term insurance d. Increasing term insurance

a. Decreasing term Insurance

In a Life instance contracts an insurance company's promise to pay states benefits is called the a. Insuring clause b. Consideration clause c. Entire contract d. Owners rights

a. Insuring clause

Which of the following characteristics is CORRECT about Interest Sensitive Whole Life? a. Premium payments can vary. b. There are no guaranteed minimum interest rates c. Mortality rates do not impact in the same amount d. Interest rates never determine cash value

a. Premium payments can vary.

Which of the following determines the cash value of a variable life policy? a. The performance of the policy portfolio b. The company's general account c. The policies guarantees d. Premium mode

a. The performance of the policy portfolio

L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances? a. L's spouse dies at age 62 b. L's spouse dies at age 66 c. Their natural child does at age 18 d. Their adopted child dies at age 18

b. L's spouse dies at age 66

A business owner was trying to obtain a bank loan to find purchase of a new business facility, but the bank requires proof of additional assets to secure the loan. The business owner then decides to use her $250,000 life insurance policy to secure the loan. Which provision make this possible? A. Collateral assignment B. Insurable interest C. Modification clause D. Ownership provision

A. Collateral assignment

What does the insuring agreement in a life insurance contract establish? a. An insurer's basic promise b. The insurance policy's grace period c. An insurer's required reserved amount d. Obligations of the beneficiaries

a. An insurer's basic promise

Variable Whole Life Insurance can be described as: a. Both an Insurance and securities product b. An insurance product only c. A Securities product only d. The insurance company assumes the investment risk

a. Both an Insurance and securities product

All of the following statements are true regarding a policy's Grace period EXCEPT: a. Past due premiums are waived b. Policy loans may still be made c. Full coverage continues d. Grace period terms are staying in the policy

a. Past due premiums are waived

The most important factor to consider when determining whether to convert team term insurance at the insured's attained age or the insured's original age is: a. The cost b. The health of the insured c. The amount of coverage being converted d. Who will be beneficiary

a. The cost

Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? a. Variable life b. Credit life c. Universal life d. Interest sensitive whole life

a. Variable life

What does the ownership clause in a life insurance policy state? a. Who the policy owner is and what rights the policy owner is entitled to b. Who the beneficiary is and what rights the beneficiary is entitled to c. Ownership cannot be assigned after the incontestable period d. Allows the policy owner to adjust the death benefit and premium amount at anytime

a. Who the policy owner is and what rights the policy owner is entitled to

A life insurance policy that provides a policy maker with cash value along with a level face amount is called: a. Whole life b. Level term c. Credit life d. Ordinary life

a. Whole life

What type of policy would offer a 40 year old quickest accumulation of cash value? a. Paid-up at 65 b. 20-day pay life c. 30-day pay life d. Straight whole life

b. 20-day pay life

Credit life insurance is typically issued with which of the following types of coverage? a. Annual renewable term b. Decreasing term c. Individual Whole life d. Group term

b. Decreasing term

In A life insurance policy, which feature states that the policy will not cover certain risks? a. Exception b. Exclusion c. Ejection d. Expulsion

b. Exclusion

When an insurer issues a policy that refuses to cover certain risks, this is referred as a(n): a. Elimination b. Exclusion c. Limitation d. Exception

b. Exclusions

What type of life policy covers 2 lives and pays the face amount after the first one dies? a. Group life b. Joint life policy c. Family income policy d. Last survivor policy

b. Joint life policy

Which of these is NOT considered to a right given to a policy owner? a. Surrendering the policy's cash value b. Modify a provision in the insurance contract c. Assignment of ownership d. Change the beneficiary, if revocable

b. Modify a provision in the insurance contract

What is the Suicide provision designed to do? a. Decline an applicant who is contemplating suicide b. Safeguard the insurer from an applicant who is contemplating suicide c. Protect the insured from ever paying a claim that results from suicide d. Allows the insured the option to pay a death benefit in event of suicide

b. Safeguard the insurer from an applicant who is contemplating suicide

T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase? a. Interest-sensitive whole life b. Ten-year endowment c. Variable universal life d. Ten-year renewable term

b. Ten-year endowment

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? a. Return of premium paid b. Cash value plus interest c. $20,000 death benefit d. Face amount plus interest

c. $20,000 death benefit

If X wants to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on X under the same policy, the applicant should purchase: a. An Estate builder policy b. a Whole Life Policy with extended term c. A Whole Life Policy with an Other Insured Rider d. A Whole Life Policy with a Payor benefit

c. A Whole Life Policy with an Other Insured Rider

Additional coverage can be added to a Whole Life policy by adding a(n) a. Payor rider b. Accelerated benefit rider c. Decreasing term rider d. Automatic premium loan rider

c. Decreasing term rider

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the: a. Cash value b. Estate of the insured c. Policy proceeds d. Nonforfeiture value

c. Policy proceeds

A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as: a. Adjustable life b. Graded premium life c. Variable life d. Modified whole life

c. Variable life

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? a. Joint life b. Adjustable life c. Variable universal life d. Universal life

c. Variable universal life

Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase? a. Joint policy b. Joint survivor policy c. Whole Life Policy with other insured rider d. Whole Life Policy with a Guaranteed insurability option

c. Whole Life Policy with other insured rider

What type of insurance offer permanent life coverage with the premiums that are payable for life? a. credit life b. Renewable term life c. Whole life d. Endowment

c. Whole life

T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? a. $1 million b. $500,000 c. $250,000 d. $0

d. $0

Which of the following is true about a class designation? a. Beneficiaries must be a part of the insured's immediate family b. It is not allowed c. it determines the succession of the beneficiaries d. Beneficiaries are not identified by name

d. Beneficiaries are not identified by name

S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT a. Type of life insurance b. S's attained age c. Dividend amount used toward purchases d. Beneficiary's age

d. Beneficiary's age

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? a. Modified whole life B. 20-year paid up policy c. Endowment d. Decreasing term

d. Decreasing term

M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain at $70,000 throughout the life of the policy. The type of policy that M has purchased is a. Adjustable life b. Intermediate premium life c. grader premium life d. Modified premium life

d. Modified premium life

All of these statements concerning settlement options are true, EXCEPT a. Increased proceeds can be provided through accumulation of interest b. Rapid depletion of proceeds can be avoided c. Proceeds can be administered by the inward company d. Only the beneficiary may select

d. Only the beneficiary may select

Whole life insurance policies are contractually guaranteed to provide each of the following, EXCEPT a. Cash value that will ultimately replace the death benefit b. Non-forfeiture benefit options c. Premiums that remain fix for the life of the policy d. Partial withdrawal features beyond surrender charge period

d. Partial withdrawal features beyond surrender charge period

which of these characteristics is consistent with a straight life policy? a. Owner can adjust both premium and death benefits b. Premiums are lower for the first five years, increasing the sixth year, and then levels off for the remaining length of the contract. c. Owner has the option of converting to term insurance d. Premiums are payable for as long as there is insurance coverage in force

d. Premiums are payable for as long as there is insurance coverage in force

D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. how much will D's beneficiary's receive? a. Refund o f premiums paid plus interest b. Nothing, due to actively serving in the armed forces c. Double the face amount because cause of death was accidental d. The full face amount

d. The full face amount

When a misrepresentation on a life insurance policy application is discovered, what actions may an insurance company take? a. Void the policy if found during the Contestable period b. Void the policy, no matter when it is discovered c. Void the Policy at any time only if it is found to be material d. Void the policy only if it is discovered during the contestable period and proven to be material

d. Void the policy only if it is discovered during the contestable period and proven to be material