WEBCE PRACTICE COMPREHENSIVE STUDY
GUIDE 2026 FULL QUESTIONS AND
SOLUTIONS GRADED A+
◍ Which of the following statements regarding life insurance policy loans is
correct?A policy loan may not be available until the policy has been in force
for several years.The full cash value is available for loan, even if there is an
outstanding loan against the policy.The policy loan interest rate will be less
than the interest rate credited to the policy's cash value.Policyowners must
repay policy loans or face steep interest penalties..
Answer: A policy loan may not be available until the policy has been in
force for several years.
◍ Robin falls while snow skiing and breaks a leg. She decides to never again
attempt this activity. What method is she using to manage this risk of
falling?.
Answer: risk avoidance
◍ All of the following are standard life insurance policy nonforfeiture options
EXCEPT:.
Answer: accumulate at interest option
◍ Which of the following types of life insurance policies would most likely be
used to insure the declining balance of a home mortgage?.
Answer: decreasing term
◍ Which of the following types of health insurance provides income when the
insured cannot work because of a disability?disability income
policiesmedical expense policiesaccidental death and dismemberment
(AD&D) policiesMedicare supplement policies.
Answer: disability income policies
,◍ Which of the following statements about life insurance accelerated living
benefits riders or provisions is correct?.
Answer: They let the insured access a portion of the policy's face amount
while still alive.
◍ Paul reached age 70' this year and has a Roth IRA worth $100,000. Which
of the following statements best describes his distribution options?Paul must
take his first required minimum distribution by April 1 of the year following
the year he turns 70'.If Paul waits to take a distribution until next year, he
must take two distributions.Paul will have to pay a 50 percent penalty tax if
he does not take the full amount of the required minimum distribution.Paul
is not required to take any distributions from his Roth IRA at any age..
Answer: Paul is not required to take any distributions from his Roth IRA at
any age.
◍ What term is used to describe the monthly income amount a fixed annuity
could provide per $1,000 of accumulated value?.
Answer: annuity purchase rate
◍ Which of the following correctly describes the comparison between a family
income policy and a family maintenance policy?.
Answer: A family income policy provides a lump-sum death benefit and a
stream of income to a specified date if death occurs before that date, while a
family maintenance policy pays a lump-sum death benefit and a stream of
income for a fixed period of time upon the insured's death.
◍ Settlement options with a life contingency base their benefit payments on:a.
the insurance company's schedule of benefit payment amountsb. an amount
specified in the policyc. the insured's lifespand. the beneficiary's lifespan.
Answer: d. the beneficiary's lifespan
◍ The death benefit amount under a children's term rider may be limited to a
specified amount and/or:the face amount of the base policya small
percentage of the base policy's face amountup to five times the base policy's
face amountany amount selected by the base policy's owner.
, Answer: a small percentage of the base policy's face amount
◍ Which of the following sections of the Tax Code deals with the tax-free
exchange of life insurance policies and annuities?Section 1515Section
2525Section 1035Section 1045.
Answer: Section 1035
◍ All the following statements regarding conditional premium receipts are
correct EXCEPT:A conditional receipt begins on the date of application or
the date of a medical exam if required, whichever is later, and it is made on
the condition that underwriting determines the insured is insurable.With a
conditional receipt if the insured were to die after the date of the application
(or medical exam) and the insurer would have issued the policy, the
coverage is made effective as of the date of the application, and a death
benefit would then be paid.With a conditional receipt, if the applicant proves
to be uninsurable (or insurable only as substandard) as of the date of
application (or medical exam), no coverage takes effect and the insurer
refunds the premium payment.Insurers are required to provide the death
benefit coverage applied for when issuing a conditional receipt..
Answer: Insurers are required to provide the death benefit coverage applied
for when issuing a conditional receipt.
◍ The cost of living adjustment (COLA) rider adjusts the disability income
benefit payments according to changes in the:Dow Jones Industrial
AverageS&P 500 IndexConsumer Price Indexgross domestic product.
Answer: Consumer Price Index
◍ Which of the following is not a potential consequence of replacing a life
insurance policy?.
Answer: the possibility of the new insurer cancelling the replacement policy
after it is issued
◍ Nicole, age ten, is the insured in a traditional "jumping juvenile" policy with
a $5,000 face amount. When she reaches age 21, what will most likely
happen to the policy's face amount?.
Answer: It will increase to $25,000.
, ◍ Which of the following best describes income payments under the period
certain payout option?.
Answer: the longer the payout period, the smaller the amount of each
monthly payment
◍ Which of the following is most likely to be considered a preferred
underwriting risk?.
Answer: An applicant who has excellent health, works in a business office
and whose family has a very good health history.
◍ What is the main difference between ordinary whole life and limited
payment whole life insurance?.
Answer: the length of time that the insured must pay premiums
◍ The formal name for what is commonly called a 'double indemnity' rider
is:guaranteed insurability riderreturn of premium ridercost-of-living
rideraccidental death benefit rider.
Answer: accidental death benefit rider
◍ The formal name for what is commonly called a 'double indemnity' rider is:.
Answer: accidental death benefit rider
◍ If an insured accidentally misstated her age on her life insurance application,
what will the insurer do if this is discovered after the end of the
contestability period?Unless the insurer finds the misstatement after the
incontestability period begins, the insurer will re-calculate the death
benefit.The insurer will void the policy.The insurer will re-calculate the
death benefit.The insurer will adjust the issue date to compensate for the
loss of interest and expenses..
Answer: The insurer will re-calculate the death benefit.
◍ With a key person life insurance policy, who is the owner of the policy?the
employeethe employee's beneficiarythe employee's estatethe employer.
Answer: the employer
◍ Jackson has a critical illness policy that covers cancer and leukemia. What
GUIDE 2026 FULL QUESTIONS AND
SOLUTIONS GRADED A+
◍ Which of the following statements regarding life insurance policy loans is
correct?A policy loan may not be available until the policy has been in force
for several years.The full cash value is available for loan, even if there is an
outstanding loan against the policy.The policy loan interest rate will be less
than the interest rate credited to the policy's cash value.Policyowners must
repay policy loans or face steep interest penalties..
Answer: A policy loan may not be available until the policy has been in
force for several years.
◍ Robin falls while snow skiing and breaks a leg. She decides to never again
attempt this activity. What method is she using to manage this risk of
falling?.
Answer: risk avoidance
◍ All of the following are standard life insurance policy nonforfeiture options
EXCEPT:.
Answer: accumulate at interest option
◍ Which of the following types of life insurance policies would most likely be
used to insure the declining balance of a home mortgage?.
Answer: decreasing term
◍ Which of the following types of health insurance provides income when the
insured cannot work because of a disability?disability income
policiesmedical expense policiesaccidental death and dismemberment
(AD&D) policiesMedicare supplement policies.
Answer: disability income policies
,◍ Which of the following statements about life insurance accelerated living
benefits riders or provisions is correct?.
Answer: They let the insured access a portion of the policy's face amount
while still alive.
◍ Paul reached age 70' this year and has a Roth IRA worth $100,000. Which
of the following statements best describes his distribution options?Paul must
take his first required minimum distribution by April 1 of the year following
the year he turns 70'.If Paul waits to take a distribution until next year, he
must take two distributions.Paul will have to pay a 50 percent penalty tax if
he does not take the full amount of the required minimum distribution.Paul
is not required to take any distributions from his Roth IRA at any age..
Answer: Paul is not required to take any distributions from his Roth IRA at
any age.
◍ What term is used to describe the monthly income amount a fixed annuity
could provide per $1,000 of accumulated value?.
Answer: annuity purchase rate
◍ Which of the following correctly describes the comparison between a family
income policy and a family maintenance policy?.
Answer: A family income policy provides a lump-sum death benefit and a
stream of income to a specified date if death occurs before that date, while a
family maintenance policy pays a lump-sum death benefit and a stream of
income for a fixed period of time upon the insured's death.
◍ Settlement options with a life contingency base their benefit payments on:a.
the insurance company's schedule of benefit payment amountsb. an amount
specified in the policyc. the insured's lifespand. the beneficiary's lifespan.
Answer: d. the beneficiary's lifespan
◍ The death benefit amount under a children's term rider may be limited to a
specified amount and/or:the face amount of the base policya small
percentage of the base policy's face amountup to five times the base policy's
face amountany amount selected by the base policy's owner.
, Answer: a small percentage of the base policy's face amount
◍ Which of the following sections of the Tax Code deals with the tax-free
exchange of life insurance policies and annuities?Section 1515Section
2525Section 1035Section 1045.
Answer: Section 1035
◍ All the following statements regarding conditional premium receipts are
correct EXCEPT:A conditional receipt begins on the date of application or
the date of a medical exam if required, whichever is later, and it is made on
the condition that underwriting determines the insured is insurable.With a
conditional receipt if the insured were to die after the date of the application
(or medical exam) and the insurer would have issued the policy, the
coverage is made effective as of the date of the application, and a death
benefit would then be paid.With a conditional receipt, if the applicant proves
to be uninsurable (or insurable only as substandard) as of the date of
application (or medical exam), no coverage takes effect and the insurer
refunds the premium payment.Insurers are required to provide the death
benefit coverage applied for when issuing a conditional receipt..
Answer: Insurers are required to provide the death benefit coverage applied
for when issuing a conditional receipt.
◍ The cost of living adjustment (COLA) rider adjusts the disability income
benefit payments according to changes in the:Dow Jones Industrial
AverageS&P 500 IndexConsumer Price Indexgross domestic product.
Answer: Consumer Price Index
◍ Which of the following is not a potential consequence of replacing a life
insurance policy?.
Answer: the possibility of the new insurer cancelling the replacement policy
after it is issued
◍ Nicole, age ten, is the insured in a traditional "jumping juvenile" policy with
a $5,000 face amount. When she reaches age 21, what will most likely
happen to the policy's face amount?.
Answer: It will increase to $25,000.
, ◍ Which of the following best describes income payments under the period
certain payout option?.
Answer: the longer the payout period, the smaller the amount of each
monthly payment
◍ Which of the following is most likely to be considered a preferred
underwriting risk?.
Answer: An applicant who has excellent health, works in a business office
and whose family has a very good health history.
◍ What is the main difference between ordinary whole life and limited
payment whole life insurance?.
Answer: the length of time that the insured must pay premiums
◍ The formal name for what is commonly called a 'double indemnity' rider
is:guaranteed insurability riderreturn of premium ridercost-of-living
rideraccidental death benefit rider.
Answer: accidental death benefit rider
◍ The formal name for what is commonly called a 'double indemnity' rider is:.
Answer: accidental death benefit rider
◍ If an insured accidentally misstated her age on her life insurance application,
what will the insurer do if this is discovered after the end of the
contestability period?Unless the insurer finds the misstatement after the
incontestability period begins, the insurer will re-calculate the death
benefit.The insurer will void the policy.The insurer will re-calculate the
death benefit.The insurer will adjust the issue date to compensate for the
loss of interest and expenses..
Answer: The insurer will re-calculate the death benefit.
◍ With a key person life insurance policy, who is the owner of the policy?the
employeethe employee's beneficiarythe employee's estatethe employer.
Answer: the employer
◍ Jackson has a critical illness policy that covers cancer and leukemia. What
