LIFE only #1ExamCram
a. Term life b. Whole life c.Universal life d. There is currently no insurance product available in the standard market which has both of these features.
1. Which type of insurance coverage has bolh a savings element and a flexible premium option?
a.Any brochure, advertisement, or policy quotation b.The copy of a policy form included with a proposal c.A description of the expected coverage of a policy d.A presentation of policy features that includes non-guaranteed elements
10. According to the California insurance code, governing the use of life insurance policy illustrations, the term llustration means
a.Return the policy for a full refund of premium b.Pay the premium after the due date without loss of coverage c.Reinstate the policy after it has lapsed for non-payment of premium d.Convert a temm policy to cash value policy without evidence of insurability
11. The life insurance grace period allows the insured to?
a.Nonforfeiture b.A deferred annulty c.A substandard annuity d.An unnecessary replacement
12 An insured replaces an existing annuity with a new one and must pay a surrender charge for cancelling the existing annuity. The new policy holds no greater financial benefits to the insured than the existing contract. This is an example of:
a.Family policy b.Joint life policy c.Survivorship policy d.Universal life policy
13. Which policy covering two or more individuals pays the face amount only when the first person dies?
a.Expense b.Interest c.Morbidity d.Mortality
14. Which component of a life insurance premium is based on the Insured's age and gender?
a.Insurance b.Increases the yearly dividend amount c.Does not affect the policy's cash value d.Decreases the length of time that premium are payable
15. The additional premium charge by an insurer for adding the accidental death benefit to a whole life policy
a.None b.60 payment c.130 payment d.One lump sunm payment
16. A 10-year certain annuity with an installment refund is purchased. The annuitant dies after receiving monthly payment for 5 years. How many remaining payments will the insurer make?
a.Level term b.Participating c.Decreasing term d.Non-participating
17. Which type of life insurance policy gives an owner the right to share in the insurer's surplus?
a.Deferred annuities cover more lives b.Deferred annuities have no surrender charges c.Deferred annulties have longer liquidation periods d.Deferred annuities have longer accumulation periods
18. What is the difference between deferred annuities and inmmediate annuities?
a.10 days b.20 days c.30 days d.45 days
19. How long is the free cancellation period for life insurance policies offered to individuals who are 60 or older?
a.Term life b.Deferred annuity c.Mortgage insurance d.Disability income Insurance
2. Which policy is a saving instrument designed to first accumulate funds and then systematically to liquidate the funds?
a Morbidity tables b.Mortality tables c.The needs approach d.The human life value approach
20. The theory of probability is applied to life insurance through the use of?
aAlienation b.Concealment c.Conservation d.Replacement
21. An attempt by an agent to deter an insured from replacng an existing life Insurance policy is called
a.Retirement compensatlon for long-ime Insurance b.Bonuses to employees for exceptional performance c.Payment to a business when an important employee dies d.Death benefits to the family of a deceased stockholder
22. Which benefits are provided by key employee insurance?
a.The policy is not in effect until it is delivered b.The grace period begins on the policy delivery date c.Commissions are not pald u the pollcy is dellvered d.The free-look period begins on the policy delivered date
23. Why Is the delivery of a life insurance policy Important?
a.Insurer must submit a notice of appointment to the commissloner b.Agent is fined for unauthorized transaction without an appolntment c.Insurer is relieved of any liability because there is no appointment d.Agent is automatically appointed by default of transacting
24. If a life agent sells a whole life policy to a prospect on behalf of an Insurer without an appointment, the...
a.Only group life insurance gives a choice of payment plans b.Group life insurance usually requires a medical examination c.Only individual life Insurance required the naming of a beneficiary d.ndividual life insurance requires the applicant to answer medical questions
25. What is one difference between group life and individual life underwriting?
a.Premium is due and payable immediately b.The total cash value is available Immediately c.The total death benefit is paid whenever the insured dies d.Policy proceeds are automatically paid to the insured's estate
26. What does the statement "Life insurance creates an immedite estate" mean?
a.Buy-sell agreements b.Key person c.Split dollar insurance d.Deferred compensation agreements.
27. How can partners guarantee a market for their share of the business in the event of death?
a.Level term b.Joint life c.Family protection d.Mortgage redemption
28.Which type of insurance policy provides a death benefit that matches the projected outstanding debt on an individual's home?
a.More than one contingent beneficiary may be named b.The contingent beneficiary share death proceeds equally with the primary beneficiary c.They receive the death proceeds if the primary beneficiary is deceased at the time of the insured's death d.They receive the remaining payment to be made under a settlement agreement upon the primary beneficiary's death
29. All of the following statements about contingent beneficiary are true EXCEPT
a.The seven-pay test b.The exclusion ratio c.The economic benefit d.The incidental limitation
3. What is used to determine the amount of an annuity distribution that is exempt from taxation?
a.A stockholders retum on his investment in the company b.Legally defined as a return of excess premium and not taxable c.Interest paid to the policyowner on the cash value in force on his permanent insurance policy d.Somewhat larger in a non-participating whole life policy than in a comparable participating pollicy
30.A Life insurance policy dividend is?
a.A fine b.License suspension c.License revocation d.Mandatory termination of all insurer appointment
31, An agent who violates the law governing life insurance policy illustrations/subject to all of the following EXCEPT
a.Subject to capital gains tax b.Subject to federal income tax c.Exempt from federal Income tax d.included in the beneficiary's adjusted gross income
32 Death benefits that are received by a beneficiary are generally
a.Insurer will make all future payment b.Insured's estate will make the premium payment c. Insurer will lend money to keep the policy in force d.Insurer will make the payment until the insured juvenile reaches a specified age-usually twenty-one or twenty-five
33.The payor rider on a juvenile life policy provides that if the payor dies or becomes disabled before the insured juvenile reaches the age specified in the pollcy that the...
a.The insurer b.The beneficiary c.The participant d.The policyholder
34.In group life insurance, who is issued a certificate of insurance?
a.For 120 months, if the insured lives that long b.For a minimum of 120 months and a minimum of the remainder of his life c..Until his death, when the beneficiary begins receiving payment for 120 additional months d.During the "period sertal" after which the payment will be reduced, but they will continue for the rest of his life
35. A person owns a life annuity. He elects to receive his annuity payment monthly for the remainder of his life with "ten years certain". The annuity will make payment...
a.Morbidity rate b.Mortality rate c.Retention ratio d.Permissible loss ratio
36. The number of deaths during a year compared with the total number of persons exposed in the class is known as the...
a.Dying too soon b.Becoming uninsurable c.outliving their financial resources d.Dying before their home mortgage is paid off
37. People commonly purchase an annuity to protect against the risk of
a.The cash value is used to select $20,000 paid-up policy b. The policy is surrendered and the policy owner is paid $10,000 by the insurer c.The cash value is used to purchase a $50,000 term Insurance policy that Is paid up for ten years d.The policy owner begins to receive monthly payment of $200 from the insurer that will continue for life
38. A $50,000 whole life policy with a cash value of $10,000 has been in force for eleven years. The policy owner is unable to continue the premium payments. Which of the following describes the reduced paid-up nonforfeiture option?
a.The policy should be returned to the agent or insurer if not wanted b.Proof of surrender must be notarized at the agent's principal office c.A charge might apply if declined after the time allowed for surrender d.The policy can be returned during a free look period for a full refund
39. Individual life insurance policies sold to seniors in the State of California must include a prominently placed statement that divulges all of the following information EXCEPT
a.$25,000 b.$50,000 c.$75,000 d.$100,000
40. How much employer-provided group term life insurance is exempt from income taxation
a.An endowment policy b.A modified life policy c.A single premium contract d.A modified endowment contract
41. A life insurance policy written after 1988 that fails to meet the seven-pay test is known as?
a.Level term policy b.Home service policy c.Increase term policy d. Decreasing term policy
42. Your client has just bought a new home which he has financed with a $150,000 7.5% interest 30-year bank loan. He would like to be sure that if he dies that the unpaid balance of the mortgage would be paid. He wants a policy that will cover the mortgage balance-no more, no-less anytime during the life of the mortgage. Which policy is designed to meet this need?
a. Insured can choose the premium payment mode b.insured must answer medical questions on the application c.face amount is paid if the insured dies during the policy period d.face amount is paid if the insured survives to the end of the policy period
43. All of the following are true about term life insurance polícies EXCEPT
a.Level term B.renewable term c.Decreasing term d.Convertible term
44. Which type of insurance guarantees the right to renew the policy each year, regardless of health, but at an increased premium
a.NON-medical b.Preferred c.Standard d.Substandard
45. Life insurance policies written without a physical examination are called
a.A felony b.A misdemeanor c.An aleatoric breach d.A fiduciary infraction
46. Which of the following would an agent be guilty of for misrepresenting the amount of dividends a policy will pay?
a Adverse selection b.Underwriting c.Ratemaking d.Marketing
47. What do we call the process whereby Insurers decide which customer to insure and what Coverage to offer?
a. Agent's report b.Consumer report c.Attonding physician's staternent d.medical information bureau disclosure
48. Which report of an insurance applicant's creditworthiness and personal characteristics may influence eligibility for life and health insurance?
a.Fixed annuity b.Flexble annuity c.Variable annuity d.Accumulation annuity
49. The insured bought an annuity ten years ago. He will retire in five years. To determine the value of his annuity, he must, multiply the value of the "accumulation units" he owns, times the value of the "separate account". This type of annuity is known as a
a.Guaranteed insurablity provision b. Waiver of premium provision c. Reinstatement provision d.Grace period provision
5. The Insured is totally and permanently disabled. The insured's policy continues in force without payment of further premiums becauso the policy contains a
a.Nonforfeiture b.Reinstatement c.Suicide clause d.entire contract
50. Which policy provision protects the insurer against possible adverse selection?
a.The settlement provision b.The reinstatement provision c.The nonforfeiture provision d.The incontestability provision
51. Which policy provision allows an insured to continue coverage under a previously lapsed policy?
a.purchase paid-up additions b.Reduce the current premium c.Purchase a 1-year term addition d.Fund the distribution of monthly Income payments
52. Which of the following is NOT an option for the use of the policy dividends
a. information regarding an individual's investments. b.listing of the individual's assets and labilities. c.information regarding a person's income and expenditures. d.A Listing of a person's civic and professional organization memberships.
53. All of the following infomation is gathered during the personad financial planning process EXCEPT
a. Beneficiary b. Payment mode c. Dividend option d. Dividend schedule
6.A policyowner has the right to change all of the following EXCEPT the:
a.Tax-deductible contribution b.Limits on contribution c.Mandatory participation d.Tax-deferred earnings.
7. Which of the following is a characteristic of nonqualified annuities?
a.The coverage Is term insurance for a fixed amount b.There is no additional charge for covering new additions to the family c.Evidence of insurablity is required to convert coverage for children to permanent insurance d.All children living with the family are covered even if adopted or bom after the policy is issued
8. When a family policy covers children, all of the following are true EXCEPT
a.Life insurance and disability Insurance b.Life insurance and deferred compensation c.Disability insurance and defered compensation d.Disability insurance and Long-Term Care insurance
9. Which two insurance products are commonly used to fund buy-sell agreements?
a.Variable life insurance b.Universal life insurance c. Adjustable life insurance d,Continuous premium whole life insurance
Which of the following contracts provides benefits that fluctuate automatically with investment results?
