Life Insurance Exam Questions
An individual is purchasing a permanent life insurance policy with a face value of
$25,000. While this is all the insurance that he can afford at this time, he wants to be
sure that additional coverage will be available in the future. Which of the following
options should be included in the policy? - ANS-Guaranteed Insurabiltiy
The guaranteed insurability option allows the insured to purchase specific amounts of
additional insurance at specific times without proving insurability.
Which of the following describes the tax advantage of a qualified retirement plan? -
ANS-The earnings in the plan accumulate tax deferred.
Contributions are tax deferred, and earnings on the money in the plan accrue on a
tax-deferred basis.
Which of the following applies to the 10-day free-look privilege? - ANS-A policyowner
may return a policy for any reason during the free-look period and receive a full refund.
Annually renewable term policies provide a level death benefit for a premium that -
ANS-Increases Annually
If a life policy allows the policyowner to make periodic additions to the face amount at
standard rates, without proving insurability, the policy includes a - ANS-Guaranteed
insurability rider.
The Guaranteed Insurability rider allows the policyowner to purchase specific amounts
of additional insurance at specific dates or events, without proving continued insurability.
Rates for the additions are based upon attained age.
An insured has a continuous premium whole life policy. She would like to use the policy
dividends to pay off her policy sooner than would have been possible otherwise. What
dividend option could she use? - ANS-Paid Up Option
With the paid-up option, the insurer can accumulate dividends at interest and then use
them, in addition to interest and the policy's cash value, to pay the policy earlier than
planned. This is different from paid-up additions, in which the dividends are used to buy
additional policies that increase the face amount of the original policy.
, If it is determined that a violation was committed, the Director may suspend a producer's
license for - ANS-up to 12 months
The term "insurance consultant" may be used interchangeably with which of the
following terms? - ANS-insurance producer
According to the Delaware Insurance Code, the terms "insurance agent," "insurance
broker," and "insurance consultant" may be used interchangeable with the term
"insurance producer."
Which of the following provides specific information about the products that are being
considered and must be left with a prospective insured at the time of application? -
ANS-Policy Summary
When agents are acting within the scope of their contract, their actions will be assumed
to be the acts of the - ANS-Insurer
After a loan is requested off of a life insurance policy, how long does an insurer have to
disperse funds? - ANS-6 months
Which universal option has a gradually increasing cash value and a level death benefit?
- ANS-Universal option A
Which statement is guaranteed to be true and if untrue may breach an insurance
contract? - ANS-Warranty
Which of the following is NOT one of the three basic types of coverage's that are
available, based on how the face amount changes during the policy term? -
ANS-Renewable
There are three basic types of term coverage available, based on how the face amount
(death benefit) changes during the policy term: Level, Increasing, and Decreasing.
Regardless of the type of term insurance purchased, the premium is level throughout
the term of the policy.
Which of the following would help prevent a universal life policy from lapsing? -
ANS-Target Premium
An individual is purchasing a permanent life insurance policy with a face value of
$25,000. While this is all the insurance that he can afford at this time, he wants to be
sure that additional coverage will be available in the future. Which of the following
options should be included in the policy? - ANS-Guaranteed Insurabiltiy
The guaranteed insurability option allows the insured to purchase specific amounts of
additional insurance at specific times without proving insurability.
Which of the following describes the tax advantage of a qualified retirement plan? -
ANS-The earnings in the plan accumulate tax deferred.
Contributions are tax deferred, and earnings on the money in the plan accrue on a
tax-deferred basis.
Which of the following applies to the 10-day free-look privilege? - ANS-A policyowner
may return a policy for any reason during the free-look period and receive a full refund.
Annually renewable term policies provide a level death benefit for a premium that -
ANS-Increases Annually
If a life policy allows the policyowner to make periodic additions to the face amount at
standard rates, without proving insurability, the policy includes a - ANS-Guaranteed
insurability rider.
The Guaranteed Insurability rider allows the policyowner to purchase specific amounts
of additional insurance at specific dates or events, without proving continued insurability.
Rates for the additions are based upon attained age.
An insured has a continuous premium whole life policy. She would like to use the policy
dividends to pay off her policy sooner than would have been possible otherwise. What
dividend option could she use? - ANS-Paid Up Option
With the paid-up option, the insurer can accumulate dividends at interest and then use
them, in addition to interest and the policy's cash value, to pay the policy earlier than
planned. This is different from paid-up additions, in which the dividends are used to buy
additional policies that increase the face amount of the original policy.
, If it is determined that a violation was committed, the Director may suspend a producer's
license for - ANS-up to 12 months
The term "insurance consultant" may be used interchangeably with which of the
following terms? - ANS-insurance producer
According to the Delaware Insurance Code, the terms "insurance agent," "insurance
broker," and "insurance consultant" may be used interchangeable with the term
"insurance producer."
Which of the following provides specific information about the products that are being
considered and must be left with a prospective insured at the time of application? -
ANS-Policy Summary
When agents are acting within the scope of their contract, their actions will be assumed
to be the acts of the - ANS-Insurer
After a loan is requested off of a life insurance policy, how long does an insurer have to
disperse funds? - ANS-6 months
Which universal option has a gradually increasing cash value and a level death benefit?
- ANS-Universal option A
Which statement is guaranteed to be true and if untrue may breach an insurance
contract? - ANS-Warranty
Which of the following is NOT one of the three basic types of coverage's that are
available, based on how the face amount changes during the policy term? -
ANS-Renewable
There are three basic types of term coverage available, based on how the face amount
(death benefit) changes during the policy term: Level, Increasing, and Decreasing.
Regardless of the type of term insurance purchased, the premium is level throughout
the term of the policy.
Which of the following would help prevent a universal life policy from lapsing? -
ANS-Target Premium
