WV STATE LIFE INSURANCE EXAM
QUESTIONS & CORRECT COMPLETE
ANSWERS
A group-owned insurance company that is formed to assume and spread the liability
risks of its members is known as a: - CORRECT ANSWER Risk retention group
Which of the following requires insurers to disclose when an applicant's consumer or
credit history is being investigated? - CORRECT ANSWER 1970-Fair Credit Reporting
Act
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first
six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of
unequal values reflects which of the following insurance contract features? -
CORRECT ANSWER Aleatory
The stated amount or percent of liquid assets that an insurer must have on hand that
will satisfy future obligations to its policyholders is called: - CORRECT ANSWER
Reserves
All of the following are considered to be typical characteristics describing the nature of
an insurance contract, EXCEPT: - CORRECT ANSWER Bilateral
What year was the McCarran-Ferguson Act enacted? - CORRECT ANSWER 1945
Which of the following consists of an offer, acceptance, and consideration? -
CORRECT ANSWER Contract
Who elects the governing body of a mutual insurance company? - CORRECT
ANSWER Policyholders
Insurance policies are considered aleatory contracts because: - CORRECT ANSWER
Performance is conditioned upon a future occurrence
Who makes the legally enforceable promises in a unilateral contract? - CORRECT
ANSWER Insurance company
Insurance contracts are known as _____ because certain future conditions or acts must
occur before any claims can be paid. - CORRECT ANSWER Conditional
, A life insurance arrangement which circumvents insurable interest statutes is called: -
CORRECT ANSWER Investor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally enforceable
promise. What kind of contract is this? - CORRECT ANSWER Unilateral
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have: - CORRECT ANSWER Insurable interest in
the proposed insured
Which of these arrangements allows one to bypass insurable interest laws? -
CORRECT ANSWER Investor-Originated Life Insurance
When must insurable interest exist for a life insurance contract to be valid? -
CORRECT ANSWER Inception of the contract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - CORRECT ANSWER Insured
Which of these is an element of a Variable Life policy? - CORRECT ANSWER A fixed,
level premium
A father who dies within 3 years after purchasing a life insurance policy on his infant
daughter can have the policy premiums waived under which provision? - CORRECT
ANSWER Payor provision
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? -
CORRECT ANSWER Policyowner
Which of the following actions is NOT possible with a Universal Life policy? -
CORRECT ANSWER Premiums may be applied as a credit against income tax
Which of the following policies is characterized by a flexible premium and death benefit
and allows the policy owner control of the investment aspect of the plan? - CORRECT
ANSWER Variable universal life
A term life insurance policy matures: - CORRECT ANSWER upon the insured's death
during the term of the policy
What type of life policy covers two people and pays upon the death of the last insured? -
CORRECT ANSWER Survivorship
When is the face amount paid under a Joint Life and Survivor policy? - CORRECT
ANSWER Upon the death of the last insured
QUESTIONS & CORRECT COMPLETE
ANSWERS
A group-owned insurance company that is formed to assume and spread the liability
risks of its members is known as a: - CORRECT ANSWER Risk retention group
Which of the following requires insurers to disclose when an applicant's consumer or
credit history is being investigated? - CORRECT ANSWER 1970-Fair Credit Reporting
Act
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first
six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of
unequal values reflects which of the following insurance contract features? -
CORRECT ANSWER Aleatory
The stated amount or percent of liquid assets that an insurer must have on hand that
will satisfy future obligations to its policyholders is called: - CORRECT ANSWER
Reserves
All of the following are considered to be typical characteristics describing the nature of
an insurance contract, EXCEPT: - CORRECT ANSWER Bilateral
What year was the McCarran-Ferguson Act enacted? - CORRECT ANSWER 1945
Which of the following consists of an offer, acceptance, and consideration? -
CORRECT ANSWER Contract
Who elects the governing body of a mutual insurance company? - CORRECT
ANSWER Policyholders
Insurance policies are considered aleatory contracts because: - CORRECT ANSWER
Performance is conditioned upon a future occurrence
Who makes the legally enforceable promises in a unilateral contract? - CORRECT
ANSWER Insurance company
Insurance contracts are known as _____ because certain future conditions or acts must
occur before any claims can be paid. - CORRECT ANSWER Conditional
, A life insurance arrangement which circumvents insurable interest statutes is called: -
CORRECT ANSWER Investor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally enforceable
promise. What kind of contract is this? - CORRECT ANSWER Unilateral
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have: - CORRECT ANSWER Insurable interest in
the proposed insured
Which of these arrangements allows one to bypass insurable interest laws? -
CORRECT ANSWER Investor-Originated Life Insurance
When must insurable interest exist for a life insurance contract to be valid? -
CORRECT ANSWER Inception of the contract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - CORRECT ANSWER Insured
Which of these is an element of a Variable Life policy? - CORRECT ANSWER A fixed,
level premium
A father who dies within 3 years after purchasing a life insurance policy on his infant
daughter can have the policy premiums waived under which provision? - CORRECT
ANSWER Payor provision
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? -
CORRECT ANSWER Policyowner
Which of the following actions is NOT possible with a Universal Life policy? -
CORRECT ANSWER Premiums may be applied as a credit against income tax
Which of the following policies is characterized by a flexible premium and death benefit
and allows the policy owner control of the investment aspect of the plan? - CORRECT
ANSWER Variable universal life
A term life insurance policy matures: - CORRECT ANSWER upon the insured's death
during the term of the policy
What type of life policy covers two people and pays upon the death of the last insured? -
CORRECT ANSWER Survivorship
When is the face amount paid under a Joint Life and Survivor policy? - CORRECT
ANSWER Upon the death of the last insured
