STATE FARM PROPERTY EXAM SCRIPT
TESTED QUESTIONS AND SOLUTIONS
CERTIFICATION EVALUATION
●● Accelerated benefits rider
Answer: Life insurance rider that allow for early payment of some
portion of policy's face amount, should the insured suffer from terminal
illness/injury.
●● adhesion
Answer: Contract must be accepted by the insured exactly as it is written
by the insurer. Terms of contract cannot be negotiated. Contract is
offered on a take it or leave it basis.
●● admitted insurer
Answer: An insurance company that has been approved to operate
within a given jurisdiction.
●● accidental death benefit rider
Answer: Life insurance policy rider providing for payment of an
additional benefit when death occurs by accidental means.
●● adjustable life
,Answer: Policy allows the policymaker to adjust the policy's face
amount, premium, and type of protection without having to complete a
new application or any additional underwriting.
●● agents (producer) report
Answer: Section of an insurance application where the agent, details
personal observations about the applicant.
●● annually renewable term (ART)
Answer: A form of renewable term insurance that provides coverage for
one year and allows policyowner to renew coverage each year, without
evidence of insurability.
●● apparent authority
Answer: The insured believes the agent has authority to act based on
actions, words or deeds of the agent. Even though the agent may not
have been granted such authority by the insurer, they will be held liable
for the actions of the agent.
●● automatic premium loan provision
Answer: Authorizes the insurer to automatically pay any premium in
default at the end of the grace period. The premium owed plus interest
charged is deducted from the policy's cash value.
●● beneficiary
,Answer: Person to whom the proceeds of a life or accident policy are
payable when the insured dies.
●● annuitant
Answer: One to whom an annuity is payable, or a person upon the
continuance of whose life further payment depends.
●● attained age
Answer: With reference to an insured, the current insurance age.
●● aviation exclusion
Answer: The insurer will not pay a claim if the insured dies as a result of
flying an aircraft or acting as a member of a flight crew. In most cases,
the insurer will offer the applicant the opportunity to purchase a rider
offsetting the exclusion.
●● buyers guide
Answer: A generic publication that explains life insurance in a way that
an average consumer can understand. It does not contain specific
product or policy information
●● Buy-sell agreement
, Answer: Agreement that a deceased businessowner's interest will be sold
and purchased at a predetermined price or at a price according to a
predetermined formula.
●● Churning
Answer: Replacing one life contract with another within the same
company without demonstrating a benefit to the client.
●● common disaster provision
Answer: This policy provision provides an alternative beneficiary in the
event that the insured and the original beneficiary die as the result of a
common accident.
●● Consideration
Answer: Element of a legal contract consisting of premium payment and
statements made by the prospective insured in the application.
●● Cash Value
Answer: The equity amount or savings accumulation in a permanent life
policy.
●● Collateral assignment
TESTED QUESTIONS AND SOLUTIONS
CERTIFICATION EVALUATION
●● Accelerated benefits rider
Answer: Life insurance rider that allow for early payment of some
portion of policy's face amount, should the insured suffer from terminal
illness/injury.
●● adhesion
Answer: Contract must be accepted by the insured exactly as it is written
by the insurer. Terms of contract cannot be negotiated. Contract is
offered on a take it or leave it basis.
●● admitted insurer
Answer: An insurance company that has been approved to operate
within a given jurisdiction.
●● accidental death benefit rider
Answer: Life insurance policy rider providing for payment of an
additional benefit when death occurs by accidental means.
●● adjustable life
,Answer: Policy allows the policymaker to adjust the policy's face
amount, premium, and type of protection without having to complete a
new application or any additional underwriting.
●● agents (producer) report
Answer: Section of an insurance application where the agent, details
personal observations about the applicant.
●● annually renewable term (ART)
Answer: A form of renewable term insurance that provides coverage for
one year and allows policyowner to renew coverage each year, without
evidence of insurability.
●● apparent authority
Answer: The insured believes the agent has authority to act based on
actions, words or deeds of the agent. Even though the agent may not
have been granted such authority by the insurer, they will be held liable
for the actions of the agent.
●● automatic premium loan provision
Answer: Authorizes the insurer to automatically pay any premium in
default at the end of the grace period. The premium owed plus interest
charged is deducted from the policy's cash value.
●● beneficiary
,Answer: Person to whom the proceeds of a life or accident policy are
payable when the insured dies.
●● annuitant
Answer: One to whom an annuity is payable, or a person upon the
continuance of whose life further payment depends.
●● attained age
Answer: With reference to an insured, the current insurance age.
●● aviation exclusion
Answer: The insurer will not pay a claim if the insured dies as a result of
flying an aircraft or acting as a member of a flight crew. In most cases,
the insurer will offer the applicant the opportunity to purchase a rider
offsetting the exclusion.
●● buyers guide
Answer: A generic publication that explains life insurance in a way that
an average consumer can understand. It does not contain specific
product or policy information
●● Buy-sell agreement
, Answer: Agreement that a deceased businessowner's interest will be sold
and purchased at a predetermined price or at a price according to a
predetermined formula.
●● Churning
Answer: Replacing one life contract with another within the same
company without demonstrating a benefit to the client.
●● common disaster provision
Answer: This policy provision provides an alternative beneficiary in the
event that the insured and the original beneficiary die as the result of a
common accident.
●● Consideration
Answer: Element of a legal contract consisting of premium payment and
statements made by the prospective insured in the application.
●● Cash Value
Answer: The equity amount or savings accumulation in a permanent life
policy.
●● Collateral assignment
