LIFE INSURANCE EXAM ILLINOIS FINAL
PAPER QUESTIONS AND SOLUTIONS
◉ Which of the following defines a peril?
Answer: cause of loss
A peril is a specific cause of loss insured in a policy.
◉ THe full premium was submitted with the app for life
insurance, and the policy was issued two weeks later as
requested. When does coverage become effective?
Answer: As of the application date.
If the full premium was submitted with the application and the
policy was issued as requested, the policy coverage effective date
would generally coincide with the date of application
◉ Which of the following best describes fixed period settlement
options?
Answer: Both the principal and interest will be liquidated over a
selected period of time.
Under the fixed period option (also called period certain), a
specified period of years is selected, and equal installments are
paid to the recipient. Both the principal and interest are
liquidated together over the selected period of time.
,◉ Equity indexed annuities
Answer: seek higher returns
these are not securities. They invest on a relatively aggressive
basis to aim for higher returns. Like a fixed annuity, the equity
indexed annuity has a guaranteed minimum interest rate. The
current interest rate that is actually credited is often tied to a
familiar index like the Standard and Poohs 500
◉ Which of the following would be considered a nonqualified
retirement plan?
Answer: split dollar amount
Examples of nonqualified plans are individual annuities and
deferred compensation plans for highly paid executives, split
dollar insurance Section 162 executive bonus plans.
◉ A life insurance policy does not have a war clause. If the insured
is killed during a time of war, what will the beneficiary receive
from the life insurance policy?
Answer: The full death benefit
War or Military Service Clause specifically excludes or limits the
insurer's liability for losses caused by war or active military
service. If a life insurance policy does not have that exclusion, the
benefits are paid to the beneficiary, as if the insured dies of any
other cause.
, ◉ Which of the following is an example of a limited-pay life
policy?
Answer: Life Paid-up at age 65
Limited Pay Whole Life premiums are all paid by the time the
insured reaches age 65. The policy endows when the insured
turns 100. It is the premium paying period that is limited, not the
maturity.
◉ Which of the following is NOT true regarding a Certificate of
Authority
Answer: It is issued to group insurance participants.
Before insurers may transact business in a specific state, they
must apply for a license or certificate or Authority from the state
department of insurance and meet any financial requirements set
down by the state.
◉ Once an agent has met the requirements to sell long-term care
insurance, how often must he or she complete the 4 hours of
ongoing training
Answer: every 2 years
every agent who sells, solicits, or negotiates long term care
insurance in Minneosta must be licensed as an insurance
producer for life and disability and complete a one time training
course and the ongoing training every 24 months
◉ Which of the following is NOT among the primary ways
deductibles for major medical plans can be paid?
PAPER QUESTIONS AND SOLUTIONS
◉ Which of the following defines a peril?
Answer: cause of loss
A peril is a specific cause of loss insured in a policy.
◉ THe full premium was submitted with the app for life
insurance, and the policy was issued two weeks later as
requested. When does coverage become effective?
Answer: As of the application date.
If the full premium was submitted with the application and the
policy was issued as requested, the policy coverage effective date
would generally coincide with the date of application
◉ Which of the following best describes fixed period settlement
options?
Answer: Both the principal and interest will be liquidated over a
selected period of time.
Under the fixed period option (also called period certain), a
specified period of years is selected, and equal installments are
paid to the recipient. Both the principal and interest are
liquidated together over the selected period of time.
,◉ Equity indexed annuities
Answer: seek higher returns
these are not securities. They invest on a relatively aggressive
basis to aim for higher returns. Like a fixed annuity, the equity
indexed annuity has a guaranteed minimum interest rate. The
current interest rate that is actually credited is often tied to a
familiar index like the Standard and Poohs 500
◉ Which of the following would be considered a nonqualified
retirement plan?
Answer: split dollar amount
Examples of nonqualified plans are individual annuities and
deferred compensation plans for highly paid executives, split
dollar insurance Section 162 executive bonus plans.
◉ A life insurance policy does not have a war clause. If the insured
is killed during a time of war, what will the beneficiary receive
from the life insurance policy?
Answer: The full death benefit
War or Military Service Clause specifically excludes or limits the
insurer's liability for losses caused by war or active military
service. If a life insurance policy does not have that exclusion, the
benefits are paid to the beneficiary, as if the insured dies of any
other cause.
, ◉ Which of the following is an example of a limited-pay life
policy?
Answer: Life Paid-up at age 65
Limited Pay Whole Life premiums are all paid by the time the
insured reaches age 65. The policy endows when the insured
turns 100. It is the premium paying period that is limited, not the
maturity.
◉ Which of the following is NOT true regarding a Certificate of
Authority
Answer: It is issued to group insurance participants.
Before insurers may transact business in a specific state, they
must apply for a license or certificate or Authority from the state
department of insurance and meet any financial requirements set
down by the state.
◉ Once an agent has met the requirements to sell long-term care
insurance, how often must he or she complete the 4 hours of
ongoing training
Answer: every 2 years
every agent who sells, solicits, or negotiates long term care
insurance in Minneosta must be licensed as an insurance
producer for life and disability and complete a one time training
course and the ongoing training every 24 months
◉ Which of the following is NOT among the primary ways
deductibles for major medical plans can be paid?
