STATE FARM EXAM QUESTIONS WITH 100%
VERIFIED ANSWERS 2024-2025
Absolute Assignment - ANSWER Policy assignment occurs when the assignee has
complete control over the policy and entire rights to its benefits.
Accelerated benefits rider - ANSWER A life insurance rider that allows for the
early payout of a portion of the policy's face amount in the event of a terminal
illness or injury.
adhesion - ANSWER The insured must accept the contract exactly as written by the
insurer. The contract terms cannot be negotiated. The contract is offered on a "take
it or leave it" basis.
ANSWER An insurance firm that has been approved to operate in a specific
jurisdiction.
accidental death benefit rider - ANSWER A life insurance policy rider that
provides for the payment of an additional benefit in the event of an accidental
death.
Adjustable life - ANSWER Policy permits the policyholder to change the policy's
face amount, premium, and type of protection without having to file a new
application or undergo further underwriting.
Agent (producer) report - ANSWER Section of an insurance application in which
the agent describes personal remarks about the applicant.
Annual renewable term (ART) - ANSWER A type of renewable term insurance
that offers coverage for a single year and allows the policyholder to renew coverage
each year without requiring proof of insurance.
,apparent authority - ANSWER The insured believes the agent has the authority to
act because of the agent's conduct, words, or acts. Regardless of whether the agent
was granted such authority by the insurer, they will be held accountable for the
agency's activities.
Automatic premium loan provision - ANSWER Allows the insurer to automatically
reimburse any defaulted payment at the end of the grace period. The cash value of
the policy is reduced by the amount of premium payable and the interest charged.
Beneficiary - ANSWER The person to whom the proceeds of a life or accident
policy are payable after the insured dies.
Annuitant - ANSWER One to whom an annuity is payable or a person on whose
life future payment is contingent.
The current insurance age of an insured is referred to as their reached age.
Aviation exclusion - ANSWER The insurer will not pay a claim if the insured dies
while piloting an aircraft or serving on a flight crew. In most circumstances, the
insurer will let the applicant to purchase a rider that offsets the exclusion.
Buyers Guide - ANSWER A generic publication that describes life insurance in
terms that the typical consumer can comprehend. It doesn't include specific product
or policy details.
A buy-sell agreement is an agreement that a deceased business owner's interest will
be sold and acquired at a predetermined price or based on a predetermined formula.
Churning - ANSWER Replacing one life contract with another inside the same
organization without providing a benefit to the client.
, Common disaster provision - ANSWER This insurance provision names an
alternate beneficiary in the case that both the insured and the original beneficiary
die as a consequence of the same accident.
Consideration - ANSWER Element of a legal contract that includes premium
payment and representations made by the potential insured in the application.
Cash Value - ANSWER The equity or savings accumulation in a permanent life
insurance policy.
Collateral assignment - The transfer of a policy to a creditor as security for a debt.
At the insured's death, the creditor is entitled to reimbursement from the insurance
proceeds for the amount owing, with any excess going to the beneficiaries.
Conditional receipt - ANSWER Given to policyholders when they pay their
premiums at the time of application. Even if the policy has not yet been issued, the
applicant is covered as of the date of the application or proof of insurability.
Consideration, legal purpose, offer, and acceptance. and competent parties. -
ANSWER: The five components of a lawful contract.
Contingent beneficiary - ANSWER Persons named to receive proceeds in the event
that the original beneficiary dies.
The cost-of-living (col) rider, which is offered with some policies, provides for an
automatic increase in benefits (usually connected to the consumer price index) to
mitigate the effects of inflation. This will cause an automatic rise in premium.
VERIFIED ANSWERS 2024-2025
Absolute Assignment - ANSWER Policy assignment occurs when the assignee has
complete control over the policy and entire rights to its benefits.
Accelerated benefits rider - ANSWER A life insurance rider that allows for the
early payout of a portion of the policy's face amount in the event of a terminal
illness or injury.
adhesion - ANSWER The insured must accept the contract exactly as written by the
insurer. The contract terms cannot be negotiated. The contract is offered on a "take
it or leave it" basis.
ANSWER An insurance firm that has been approved to operate in a specific
jurisdiction.
accidental death benefit rider - ANSWER A life insurance policy rider that
provides for the payment of an additional benefit in the event of an accidental
death.
Adjustable life - ANSWER Policy permits the policyholder to change the policy's
face amount, premium, and type of protection without having to file a new
application or undergo further underwriting.
Agent (producer) report - ANSWER Section of an insurance application in which
the agent describes personal remarks about the applicant.
Annual renewable term (ART) - ANSWER A type of renewable term insurance
that offers coverage for a single year and allows the policyholder to renew coverage
each year without requiring proof of insurance.
,apparent authority - ANSWER The insured believes the agent has the authority to
act because of the agent's conduct, words, or acts. Regardless of whether the agent
was granted such authority by the insurer, they will be held accountable for the
agency's activities.
Automatic premium loan provision - ANSWER Allows the insurer to automatically
reimburse any defaulted payment at the end of the grace period. The cash value of
the policy is reduced by the amount of premium payable and the interest charged.
Beneficiary - ANSWER The person to whom the proceeds of a life or accident
policy are payable after the insured dies.
Annuitant - ANSWER One to whom an annuity is payable or a person on whose
life future payment is contingent.
The current insurance age of an insured is referred to as their reached age.
Aviation exclusion - ANSWER The insurer will not pay a claim if the insured dies
while piloting an aircraft or serving on a flight crew. In most circumstances, the
insurer will let the applicant to purchase a rider that offsets the exclusion.
Buyers Guide - ANSWER A generic publication that describes life insurance in
terms that the typical consumer can comprehend. It doesn't include specific product
or policy details.
A buy-sell agreement is an agreement that a deceased business owner's interest will
be sold and acquired at a predetermined price or based on a predetermined formula.
Churning - ANSWER Replacing one life contract with another inside the same
organization without providing a benefit to the client.
, Common disaster provision - ANSWER This insurance provision names an
alternate beneficiary in the case that both the insured and the original beneficiary
die as a consequence of the same accident.
Consideration - ANSWER Element of a legal contract that includes premium
payment and representations made by the potential insured in the application.
Cash Value - ANSWER The equity or savings accumulation in a permanent life
insurance policy.
Collateral assignment - The transfer of a policy to a creditor as security for a debt.
At the insured's death, the creditor is entitled to reimbursement from the insurance
proceeds for the amount owing, with any excess going to the beneficiaries.
Conditional receipt - ANSWER Given to policyholders when they pay their
premiums at the time of application. Even if the policy has not yet been issued, the
applicant is covered as of the date of the application or proof of insurability.
Consideration, legal purpose, offer, and acceptance. and competent parties. -
ANSWER: The five components of a lawful contract.
Contingent beneficiary - ANSWER Persons named to receive proceeds in the event
that the original beneficiary dies.
The cost-of-living (col) rider, which is offered with some policies, provides for an
automatic increase in benefits (usually connected to the consumer price index) to
mitigate the effects of inflation. This will cause an automatic rise in premium.
