Life Insurance Practice Exam
A 30-year-old male is considering buying a $100,000 Whole life insurance policy. Which contract would have the highest annual premium?
20 pay life
If a currently insured Social Security participant dies and leaves a 30-year-old spouse and 10-year-old child as survivors, how long is the "black-out" period?
24 years
All life insurance policies and annuities offered for sale to individuals age 60 or older in this state shall provide a free look period of at least ____ days.
30
Replacing insurers shall provide its new policy owners with the right to an unconditional refund of all premiums paid during a ____-day free look period starting from the date of delivery of the new policy.
30
All of the following are true regarding convertible term life insurance EXCEPT:
All term life is convertible
On an annuity, the person whose life the contract is based upon is known as the:
Annuitant
The main source of life insurance underwriting information is the:
Application
All of the following are nonforfeiture provisions in a cash value life insurance policy EXCEPT
Automatic premium loan
A conscious decision not to participate in situations, events or circumstances which could create the possibility of loss is a risk management method known as risk:
Avoidance
Life insurance may consist of all of the following EXCEPT
Buy/sell agreements
The life insurance provision that protects the contingent beneficiary by presuming that the insured was the last person to die when the insured and the primary beneficiary both die as a result of the same accident is known as the ________ clause.
Common disaster
Any attempt by an existing insurer or its agent to dissuade a policy owner from the replacement of existing life insurance is known as:
Conservation
On what type of life insurance is the policyholder also the beneficiary?
Credit life
Under a long-term care rider, which of the following are considered to be activities of daily living?
Dressing and eating
Which life insurance policy provides protection for the insured's entire family?
Family life policy
In order to get the free look period started, insurers may deliver the policy by any of the following methods EXCEPT:
First class mail
What is the first Whole life insurance policy provision that applies when the insured does not pay their premium when due?
Grace period
The life insurance rate-making components "Mortality + Expenses - Investment Income" equal the life insurance
Gross premium
Which type of life insurance has a tax-deductible premium?
Group life
Which type of annuity has no accumulation period?
Immediate
All of the following are true regarding life insurance insurable interest EXCEPT:
It must exist at the time of loss
If a whole life policy is being kept in force by use of the waiver of premium rider, what happens to the policy owner's cash value
It will accumulate in the usual manner
A written agreement between a provider and an owner with no health problems under which the owner agrees to sell their life insurance policy for compensation that is greater than their cash surrender value but less than their death benefit is known as a(n):
Life Settlement contract
Which annuity payout option has no beneficiary?
Life income
The rules regarding replacement are designed to protect the interests of:
Life insurance and annuity purchasers
Fixed annuities may offer all of the following advantages EXCEPT:
Life insurance protection
Which of the following life insurance settlement options has no tax implications?
Lump sum
Loans are taxable on which of the following types of life insurance?
Modified Endowments
If an annuity owner with a 20-year lifespan annuitizes with a Life income with 10-year period certain payout option dies after 11 years, their beneficiary will receive:
Nothing
Adding a comprehensive long-term care rider to a life insurance policy will provide the insured with which of the following coverages:
Nursing home and home based care
All of the following are true regarding employee Group life insurance EXCEPT:
On a contributory group plan, 100% of the eligible employees must enroll
A deferred annuity always has a beneficiary during the:
Pay-in period
The accumulation period on a deferred annuity is also known as the:
Pay-in period
All of the following are true regarding Universal life EXCEPT:
Premiums are invested in the insurer's separate account
Agents must provide prospective life insurance purchasers a Buyer's Guide:
Prior to accepting the applicant's initial premium
The main purpose of life insurance is:
Protection
Since level term policies often lapse at the end of a term due to the increase in premium, some insurers have attempted to improve their "persistency" by offering their insureds a:
Re-entry option
Which nonforfeiture option provides the insured with the longest period of coverage?
Reduced paid up
A life insurance plan where the employer pays that part of the premium that is allocated to the cash value and the employee pays the difference is known as a:
Split dollar plan
Which type of life insurance is most expensive in the long run?
Term life
All of the following are true regarding employee Group life insurance EXCEPT:
The beneficiary is the employer
Which of the following is not eligible for tax deferral under IRC Section 1035?
The exchange of an annuity for life insurance
All of the following are false about Group life insurance EXCEPT:
The grace period is 31 days
A Life Settlement broker represents the:
The life insurance policy owner
All of the following are true regarding the reinstatement of a lapsed life insurance policy EXCEPT:
The premium on a reinstated policy is based upon the insured's current age
All of the following are true regarding life insurance company underwriting requirements EXCEPT:
They are standardized by the Commissioner
All of the following are true regarding life insurance mortality tables EXCEPT:
They are used to determine which people will die this year
All of the following are true regarding life insurance policies issued by mutual insurers EXCEPT
They may pay dividends to their stockholders
Buying life insurance is a form of risk:
Transfer
The rules regarding replacement apply when replacing which of the following types of life insurance?
Universal life
Agents selling which of the following types of life insurance products would have to be licensed by FINRA?
Variable/Universal life
The party covered by an individual or group life insurance policy is known as the:
insured